Healthcare Payers’ COVID-19 Playbook


A playbook to help payers prioritize and manage a multi-faceted and impactful COVID-19 response.

Jim Fields and Chris Bernene

12 min read

Editor’s Note: The following article is part of an ongoing series offering our strategic advice and expertise on what healthcare industry stakeholders should do immediately in response to the rapidly evolving novel coronavirus (COVID-19) pandemic. 

Payers are in a unique situation regarding their greater response to COVID-19. Payers, like those across every corner of the global economy, must ensure their business operations continue. But they must also do so while helping shape and lead the public health response.

COVID-19 is sweeping the world in a series of big waves. Many can perhaps be defined in a single word: uncertainty, worry, disturbance, and so on. Below are our top payer priorities – ones we recognize are ever-evolving – we believe payers must consider now to support their employees, customers, communities, and their own company’s health during this pandemic. This playbook outlines a critical roadmap for payers wanting and needing to maximize priority management.

COVID-19’s First Wave: An Urgent Focus on Connectivity and Business Continuity

Most companies have been heavily focused on business continuity,  member communication, and support. This will likely remain paramount for the foreseeable future. 

In the immediate term, we believe one key focus for payers should be establishing new collaboration models. Big changes to traditional working models are affecting technology, daily processes, workforce policy, and working norms. Ensuring your business can continue business operations in the face of these changes is essential.

Now that most companies have moved to remote working models, here are some tips from Oliver Wyman on how to effectively conduct virtual meetings.

In addition to business continuity, plans need to communicate with and support members and customers. This is a rare opportunity for payers to shine during a time of member and employer need. (For more information, read Payers’ Moment of Truth is Here about how to support your members and solidify customer relationships during a critical time of need.)

Tele and on-line programs for medical care, behavior, and mental health are also important to get members the care and support they need.  This also represents a great opportunity to broaden the concept of mental health support with access to online yoga, exercise, and mindfulness “classes” as much of the US population is confined to their homes and experiencing varying degrees of anxiety from being “cooped-up.”

Further, payers need to quickly remove barriers to care. Although payers aren’t generally equipped to participate on the front lines of care, they can still serve their customers by removing barriers to care. Eliminating barriers - such as cost-sharing, prior authorizations, and traditional payment policies – which in “normal times” (pre-COVID-19), are designed to support quality and cost-effective care for members, will ensure they don’t become a barrier to disaster response in the face of a global pandemic. We have already seen some examples of this in payers working with the White House and Internal Revenue Services (the IRS) to allow first-dollar coverage for COVID-19 testing and shaping legislation to remove member cost-sharing for COVID-19 treatment. 

How will COVID-19 impact payers? Short-term shocks are likely. Other impacts will have long-tails. And others may redefine how the industry operates going forward, ultimately creating a “new normal” for business operations.

COVID-19’s Second Wave: Collaboration with Providers and Government Response Teams 

This pandemic has quickly transformed from a more isolated “news from afar” issue to one sparking mass shutdowns of schools and businesses for social distancing purposes. What comes next? Payers must engage with other stakeholders to manage collective response efforts.

We see this taking many forms, as outlined below. We recognize some of them will hopefully be unnecessary. Yet we invite you to consider them all, and favor being overprepared early on than being underprepared later on.

1. Set-up and collaborate with your providers and government response teams. Work with government officials to create forums where all parties (like disaster response leaders, provider system executives, other payers, social services organizations, and large employers) can communicate and respond collectively while formulating a response. This could involve, for instance, tracking and projecting COVID-19’s spread to manage provider supply and demand. Consider, for instance, tools like the Oliver Wyman COVID-19 Scenario Generator. Our outputs estimate growth rate based on response speed and effectiveness. This model can forecast the growth of infection rates to inform planning efforts and help prevent a shortage of healthcare beds and clinicians. 

2. Use analytics to proactively identify and communicate with high-risk members. Payers must actively identify which high-risk individuals are at greater health risk if they contract COVID-19. This population includes older adults and those with medical conditions like heart disease, diabetes, and/or lung disease. Focus on engaging with these high-risk individuals (and perhaps work with marketing to ensure your communication style is compassionate and caring versus alarmist and fearful) to minimize their risk of infection, ensure timely treatment, and help them feel supported.

3. Prepare for demand outstripping supply. Although we hope social distancing efforts like closing bars, schools, daycares, places of work, as well as many people’s personal decisions to self-isolate prove effective to mitigate the spread of this virus, leaders must be prepared to take extra measures. These measures are ones about rapidly expanding healthcare supply and removing payment limitations which may create barriers to care in alternative settings. These barriers include turning hotels into quarantine areas for the sick, turning schools and other available buildings into treatment centers, redeploying office-based care management / clinical resources to the front-lines should additional qualified clinical workers be needed to fill short-falls, and working to equip individuals and families with supplies, equipment, and guidance to treat COVID-19 from the comfort of their homes. States like Colorado are now beginning to adjust licensing requirements to make it easier for these kinds of clinical resource redeployments.

4. Collaborate with your competitors. In light of confusion and evolving needs, payers must do all of the above in a way that’s coordinated with others – even if they’re competitors. Now is the time to create clarity for consumers, regardless of the messenger.

COVID-19 Third Wave: Redefining Business as Usual

Some of COVID-19’s impacts for payers are likely to be short-term shocks. Others will have long-tails. And others may redefine how the industry operates going forward, ultimately creating a “new normal” for business operations. Here are some ways multi-dimensional planning for these impacts may unfold:

It’s critical to assess COVID-19’s business impacts. For example, consider financial modeling on the impact of COVID-19 for the current year and 2021 business pricing.

Consider, for instance, that the rate filing deadline for Medicare Advantage plans is early June (although most of the plans will begin their work on it starting now, going into May).

According to analysis from Oliver Wyman’s Actuarial practice, medical costs will likely decrease short-term (this is something that happens with most disasters as people forgo elective procedures and non-essential care). As the COVID-19 curve accelerates upwards, medical costs may soar in coming months.

In 2021, payer leaders must decide how much they incorporate COVID-19 projected costs into the Affordable Care Act (ACA), Medicare, and other pricing bids, while simultaneously working with regulatory authorities to seek approval for bid revisions at a later date (once more is known about the true magnitude of cost impact).

And, it’s critical to consider recession preparedness. It’s increasingly likely we are entering a world-wide economic downturn. Payers must, therefore, model scenarios around the magnitude and duration of our recession to inform its potential impact on customers across different business lines (such as the shrinkage of the small group market and the growth of both Medicaid and individual markets).

Play offense. Consider ways to use the coming economic slowdown and crisis response to re-evaluate traditional business practices. These include distribution channels, the role of telehealth, a remote workforce, the use of artificial intelligence for better member engagement, consumer guidance tools and mechanisms, and the like.

This pandemic is perhaps the greatest upheaval we will face in our lifetimes. How the private market responds to this crisis will certainly influence public opinion toward the structure of the US healthcare system, and could shape consumer sentiment and future policy decisions. Let’s get going.