As the financial impact of COVID-19 continues to ravage employers across the country, there is a heightened focus on attempting to predict and manage some of the key expenses to their business. Gallagher’s actuaries and data analysts within the Healthcare Analytics practice have modeled the impact of the COVID-19 virus and are predicting a reduction in healthcare costs for self-funded employers in the short term.
- With substantial numbers of routine doctor visits and elective procedures being cancelled or deferred, employers are seeing unanticipated, favorable cash flow.
- Actuarial analysis from past comparable natural disasters and crises shows an estimated 50-60% of deferred elective services will not be rescheduled.
- Anticipated savings due to reduced utilization of the healthcare system will outweigh any increased burden of direct COVID-19 related claims.
- Given the scope, likely duration, and psychological effects of the pandemic, the short-term reduction in healthcare costs for many employers will be even more significant than previously seen.
- Different industries and geographical regions will be impacted to varying degrees. Accordingly, the model provides a range of scenarios based on ultimate infection rate for a given population.