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  • Daron Robertson

COVID-19 and Health System Overload: A Triple Threat?

In daily discussions with industry executives, a loose consensus is emerging that we may see three waves of peak demand on the healthcare system in the coming months.


Wave 1 (now-May): For care providers, it’s already here in certain hotspots like Seattle and New York, and likely coming soon to other large cities. We are just in the beginning stages of this exponential rise in COVID-19 cases. On the payer side, health plans that are tracking COVID-19-related inbound calls are seeing a corresponding exponential pattern in call volume from members. This uptick has been somewhat offset by reduced call volume due to postponed care, but most agree that payers are facing a significant increase in workload in the coming few weeks. As a result, they are either 1) hiring additional staff now, directly or through partners, or 2) putting contingency plans in place to rapid-hire when the work arrives. On the PBM and retail side, for example, CVS just announced plans to hire 50,000 new workers to service increased demand at its 10,000 store locations, and Humana and Cigna are clearly ramping up hiring activity on all fronts.


Wave 2 (Jun-Sep): Like the flu and other viral respiratory diseases, many are optimistic COVID-19 will tame during the summer (although it’s too early to say). If this happens, payers and providers would get a much-needed COVID break. We will all come out of our homes, re-learn how to interact face-to-face, maybe start to travel again, and… see our doctors. Care postponement is a real thing. Everyone who has been avoiding care due to social distancing or being told to “stay away” from the clinic or hospital will use this time to re-engage with their care providers. While less acute and scary, this second wave will be very real and further strain the healthcare system.


Wave 3 (Fall): In the oft-referenced Spanish Flu epidemic, the majority of deaths occurred in the fall, several months after the epidemic started. This was due to 1) the emergence of a deadly virus mutation, spread by 2) rapid troop movements around the globe, further spread by 3) an unwillingness to impose quarantines. There is already more talk right now, amidst the rapidly rising case count, of loosening restrictions. It’s not hard to imagine that this summer we will see a dramatic “return to normalcy” as the administration declares victory, people start to socialize in groups, travel domestically and abroad again, and… sound like a potential horror show?


Taking these peaks in context, this is what it could look like:



From discussions we are having, the first two waves seem very likely, it’s more a question of when and how big. The third wave, and even the overall seasonality of COVID-19, is an unknown and depends on several other factors including the success of mitigation and suppression efforts.


As Neel Kashkari recently said on Planet Money, “When the downside scenario is that devastating…the right policy response is to overreact…we need to go big, and go fast.” The $2 trillion stimulus bill that just passed seems like it fits the description.


When thinking about these three impending waves in the context of “go big and go fast” it’s interesting to witness the various reactions within the payer community. Some firms are acting decisively now, proactively scaling up, hiring more people, getting them trained and ready to go. Others are taking a more cautious and reserved approach.


So, which is better? History will decide.

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