Profits climb for major insurers as hospital volumes drop in Q2

 The nation’s top health insurers again raised financial targets for the year as revenues climbed on increased membership, while some signs indicated demand for medical services was tepid.   

All but two of the seven largest insurers saw profits climb in the second quarter compared with the prior-year period, as many saw a key metric for medical spending decrease. 

Many of the largest insurers saw profits climb in the second quarter

Comparing net income year over year for the second quarter

Industry observers have been closely watching for signals of pent-up demand as many patients delayed care amid the varying spikes in COVID-19 cases. 

That didn’t seem to materialize in the second quarter as insurance executives didn’t report a surge in care. Almost all insurers saw their medical loss ratios either decline or remain the same from the second quarter last year.   

Executives at Cigna, one of the nation’s largest insurers with nearly 18 million members, said there were fewer surgeries, fewer emergency room visits and fewer people admitted to the hospital in the second quarter compared to the prior-year period. 

Direct COVID-19 costs were also better-than-expected, Cigna executives told investors on the second-quarter earnings call. As fewer Cigna patients sought medical care, net income climbed 6% to $1.6 billion.

Cigna wasn’t alone in reporting lighter patient volumes. 

UnitedHealthcare, the insurer arm of UnitedHealth Group with more than 51 million members, reported a lower level of COVID-19 patient care and said usage of some medical services still fell below pre-pandemic levels, including pediatrics and the emergency department. UnitedHealth’s net income increased to $5.1 billion. 

Humana also noticed a dip in members utilizing medical services, noting fewer Medicare members were admitted to the hospital in the quarter. Humana’s net income also climbed 18% to $696 million.  

Q2 performances led insurers to raise their financial expectations for the full year. 

“The lower utilization trends and lack of COVID-19 headwinds seen to date, give us confidence in raising our full year adjusted [earnings per share] guide,” Humana CFO Susan Diamond said on a call with investors.

On the other hand, the nation’s for-profit hospital chains reported fewer admissions and a dip in profits as they continued to deal with labor and other expenses amid record high inflation. 

“U.S. hospitals and health systems are now halfway through an extremely challenging year,” Kaufman Hall said in a recent report that showed six consecutive months of negative operating margins.

Fitch Ratings revised its ratings outlook to negative from stable for Community Health Systems following the hospital chain’s second-quarter results. 

Fitch said the revision reflects “significant increases in labor costs and weakness in volume” throughout the first half of the year.

Nonprofit hospital operators have also faced challenges in the first half of the year.  

Both Kaiser Permanente and Sutter Health reported net losses in the second quarter of the calendar year as expenses grew and investment income declined.

https://www.healthcaredive.com/news/insurers-raise-financial-targets-hospital-profits-fall-in-second-quarter/629018/

Amazon to offer behavioral health services through Ginger partnership

 

• Amazon is working to add mental healthcare to its slate of primary care services through a partnership with teletherapy startup Ginger.
• The tech giant’s healthcare program for employers, Amazon Care, plans to include Ginger’s behavioral healthcare services as an optional add-on for clients, according to a live website on the service. Services include on-demand visits with behavioral health coaches, licensed therapists and psychiatrists.
• The new service hasn’t launched yet, according to Business Insider, which cited sources familiar with the matter. Amazon currently offers virtual and in-person primary care visits for clients in select areas of the U.S., along with prescription delivery. 
• The behavioral health add-on will allow Amazon care to coordinate between its own care teams and Ginger therapists and psychiatrists, Amazon said on the website. Amazon’s primary care providers already treat common mental health concerns, but care coordinators will refer patients to in-network behavioral health specialists through Ginger for more moderate and acute concerns.

Amazon has been hustling to build out Amazon Care, which it launched a few years ago as a pilot program for Seattle-area employees but has since expanded to a large swath of the country.

Expansion of its in-person benefit, where Amazon Care dispatches nurse practitioners to a patient’s home or office if their needs can’t be resolved over video, has lagged, however, in a tight labor market.

Amazon announced plans in July to acquire primary care network One Medical for nearly $4 billion. If the deal closes, Amazon will add almost 190 clinics, a subscription telehealth service, an electronic health record and contracts with thousands of employer clients to its healthcare business.

Ginger is a big partner for Amazon as the company looks to double down on the mental health component of its care delivery arm. The 12-year-old company merged with mindfulness and meditation app Headspace last fall to create a mental health company valued at around $3 billion and with a combined reach of 100 million consumers, according to the combined entity.

Financial terms of the partnership were not disclosed.

https://www.healthcaredive.com/news/amazon-mental-health-ginger/629422/

CDC, HHS release environmental index as federal government ramps up climate oversight

 The Centers for Disease Control and Prevention and the HHS Office of Climate Change and Health Equity on Wednesday launched an environmental justice index, the latest initiative by federal healthcare agencies to place heightened importance on climate change and health equity issues.

The Environmental Justice Index, developed in partnership with the Agency for Toxic Substances and Disease Registry, analyzes cumulative environmental factors at the individual census tract-level so local public health officials “can identify and map areas most at risk for the health impacts of environmental burden,” according to the HHS release.

“Too many communities across our nation, particularly low-income communities and communities of color, continue to bear the brunt of pollution. Meeting the needs of these communities requires our focused attention and we will use the Environmental Justice Index to do just that,” said HHS Secretary Xavier Becerra in a statement.

It’s the latest step for federal healthcare agencies in an effort to address public health challenges exacerbated by climate change.

The tool, which also aims to address the “cumulative impacts on health and health equity,” follows the CMS’ early August final inpatient payment rule, which published comments that it solicited from the public on issues like climate change and public equity.

Recently, the CMS and the HHS have made efforts to highlight social issues as driving factors for healthcare problems in the U.S. As part of goals set by the Biden administration, the HHS announced in June that it would prioritize 13 of its programs in the administration’s Justice40 Initiative, which focuses environmental initiatives on disadvantaged communities. The HHS’ climate change and health equity office, launched last year, was also a Biden administration initiative.

In April, the HHS asked hospitals and hospitals to pledge to voluntarily cut their carbon emissions in half by 2030 and to net zero emissions by 2050.

Other medical advocacy groups, like the American Medical Association, have called for national climate action. During its annual meeting in June, the AMA called climate change a “public health crisis that threatens the health and well-being of all people” and pledged to support climate justice initiatives.

Shortly after the AMA annual meeting, the Supreme Court curbed the nation’s environmental authority, ruling in a 6-3 vote that the Environmental Protection Agency does not have have the authority to regulate carbon emissions without specific Congressional approval. Becerra called the SCOTUS ruling a step backwards for public health.

Air pollution, built environment, potentially hazardous and toxic sites, socioeconomic status, minority status and transportation infrastructure are just some of the indicators that can be sorted in the EJI. Each tract is assigned a number score. For example, a tract with a score of 0.75 means that the census tract experiences worse cumulative effects of that factor than 75% of all other tracts nationally.

The tool highlights Flint, Michigan, as an example of a community facing environmental injustice and cites the city’s “century of environmental racism and injustice” in addition to Flint’s ongoing water crisis that began in 2014, which is disproportionately affecting low-income and Black residents.

https://www.healthcaredive.com/news/cdc-hhs-release-environmental-justice-index/629441/

Oscar Health pauses full-service tech deals amid implementation woes

 

• Oscar Health will stop pursuing new full-service deals for its +Oscar information technology platform for the next 18 months, following issues implementing its deal with Florida-based insurer Health First Health Plans, CEO Mario Schlosser told investors Thursday.
• In the past, the 10-year-old insurtech signed about one to two new +Oscar agreements each year. The tech platform aims to help healthcare organizations transition to risk-based payment models, better engage patients and control medical spending.
• The decision to halt new technology agreements doesn’t change Oscar’s financial expectations for 2022, as the insurtech plans to reallocate resources to focus on achieving profitability in its insurance operations next year, and overall profitability by 2025, Schlosser said.

Payers and providers alike are investing in and developing digital tools in a bid to provide cheaper, more longitudinal patient care.

New York-based Oscar has touted the success of +Oscar, sharing that the platform has resulted in a 13% reduction in emergency room visits, a 20% reduction in no-shows and a 15% increase in annual wellness visits — something that could mean “large cost savings and increased profits among the industry” at scale, said Forrester analyst Kyle Rybarczyk in comments on Oscar’s second quarter earnings.

But Oscar is running into difficulties implementing +Oscar broadly. The Health First Health Plans partnership, announced last year to give the payer’s Medicare Advantage and individual members access to the platform, was slated to go live at the start of 2022.

But the deal faced post-launch challenges due to “the complexity of a comprehensive integration at this scale,” Schlosser said.

Seven months in, Oscar is still working on implementation and doesn’t want to overextend itself by taking on new full-service clients in the near term, CFO Scott Blackley told investors.

“Because of the large growth we had and because we want to support existing clients in execution there, we really said for the next 18 months, let’s not shoulder another implementation of a big full-service deal,” Blackley said. However, Oscar is continuing to see hospitals and payers wanting to take on more risk and needing infrastructure to support that, so the insurtech is continuing negotiations for +Oscar deals, according to the CFO.

“At this point, on these full-service deals, we’re already talking about 2025 and beyond,” Blackley said.

Oscar reported revenue of $1 billion in the second quarter, up 93% year over year. Net loss increased to $112 million compared to $73 million same time last year.

Membership almost doubled year over year to more than 1 million people, mostly due to gains in individual and small group enrollment.

Enrollment in Oscar’s co-branded plans with Cigna for small businesses grew tenfold to 46,000 members. The plan is currently available in select markets in seven states, and will be available in Philadelphia next year, Schlosser said.

The CEO said he was pleased to see the Democrat’s sweeping healthcare and climate bill the Inflation Reduction Act, which includes an extension to enhanced Affordable Care Act subsidies, pass the Senate. That, along with Medicaid redeterminations that Oscar expects to mostly take place next year, should be a tailwind to an expanding ACA marketplace next year, Schlosser said.

https://www.healthcaredive.com/news/oscar-health-stops-full-service-tech-deals/629566/

Where Carnival, Norwegian, Royal Caribbean Sit on Covid Vaccines

 Cruise line covid-19 vaccination and testing rules, which were imposed by the Centers for Disease Control and Prevention at the beginning of the pandemic, have been stricter than most. After the pandemic started in early 2020, the CDC signed a No Sail Order on March 14, 2020, which was finally lifted after nearly eight months on Oct. 30, 2020.

After the No Sail Order was lifted, the CDC enacted extremely restrictive rules and regulations to help keep passengers safe with the covid pandemic still raging throughout the world. The rules and regulations were set forth to begin to return cruise lines to operational status.

The cruise lines first had to be staffed accordingly and set up with the ability to test, treat and quarantine for covid medical emergencies. Testing for crew and passengers before embarkment and before dis-embarkment was required. The testing at pre-embarkment was a measure to protect those boarding, while the post-trip testing was for determining if an infection started on the cruise line itself. Being able to track the virus was very important in the prevention of spreading the virus and protecting patrons.

Vaccination Still Not a Free Pass to Board

Once the vaccination was developed and approved, it became part of the CDC guidelines for cruise line adult passengers to have their vaccination before boarding. Even with a vaccination, guests still needed to test before they boarded the cruise lines. As the vaccine was approved for younger age groups, those age groups were then also required to have the vaccine to travel. Passengers were required to be fully vaccinated unless they are exempt by some status.

Before boarding, cruise line passengers who tested positive, as well as their travel companions, were not allowed to board, depending on the cruise line and how long the cruise may be. Some passengers were allowed to board and then isolate, others would have to reschedule their trip. Trip insurance is a good buy these days.

Cruise Lines Letting Loose on Vaccine Policies

Carnival Cruise Line  (CCL)  has now removed pre-cruise testing for vaccinated guests and also welcomes unvaccinated guests to travel. Fully vaccinated guests traveling less than 16 nights with the cruise line will no longer be subjected to testing, but still must provide proof of their vaccination status. Unvaccinated travelers will only need to provide a negative covid test result to board the ships. All rules and regulations are still subject to the destination country’s guidelines.

According to the Healthy Sail Center for Royal Caribbean  (RCL) , the cruise line has updated its covid vaccination protocol. The cruise line will now allow passengers regardless of vaccination status to board in some ports if the travelers meet the testing requirements. Testing requirements vary by cruise departure and destination. Check the cruise lines port departure for updated information on requirements.

There is, however, a major exception, at least for now, which is obvious when you look at the specific wording shared by the cruise line:

"Starting with September 5 departures, all travelers regardless of vaccination status can cruise on the following itineraries, as long as they meet any testing requirements to board. 

. Cruises from Los Angeles, California.

• Cruises from Galveston, Texas.
• Cruises from New Orleans, Louisiana.
• Cruises from a European homeport.

Notice that Florida, a major port for the cruise line, is not currently on the list.

In the U.S. aside from Florida, any guest with a valid negative covid test within the last three days will be able to board. These guests will also not be required to take a second test at the boarding terminal. Fully vaccinated guests do not need to provide proof of a negative covid test for shorter cruises. See the cruise line website for all updated information as it is subject to change.

Beginning Sept. 3, Norwegian Cruise Line  (NCLH)  is dropping its covid vaccine requirements for all its cruises. The cruise line stated that it is continuing to follow requirements for all destination countries, so guests traveling will want to check on destination vaccine and testing requirements. All guests 12 and older regardless of vaccination need to show proof of a negative test within 72 hours. Check NCL online for further instructions prior to travel.

The CDC has taken the stance that travelers are now well informed enough to make their own decisions when it comes to traveling on cruise lines. The travelers are taking their own assumed risk for their health and well-being. Cruise lines are now welcoming this new freedom for their passengers. 

https://www.thestreet.com/investing/cruise-covid-cdc-restrictions-updated-vaccine

Raymond James Turns Bullish On ProQR

 

• Raymond James upgraded ProQR Therapeutics N.V. 
  PRQR+5.51%+ Free Alerts
   to Outperform based on a high conviction that "RNA editing" emerges as an impactful field of therapeutics in coming years. 
• The analyst notes that targets are plentiful, including Alpha-1-antitrypsin deficiency, on which Raymond James based the new model (assume this will be one of five programs partnered with Eli Lilly And Co 
  LLY+2.22%+ Free Alerts
   with peak royalties of $150 million.
• During initiating the coverage, the analyst said to own PRQR for RNA editing alone but got blown up after disappointing Phase 3 sepofarsen data. 
• "Now is our opportunity to own and defend that call, which we are doing with conviction," says Raymond James analyst.
• The company makes a bet easier with deprioritization of everything else besides axiomer.

https://www.benzinga.com/general/biotech/22/08/28478144/raymond-james-bullish-on-this-penny-stocks-reprioritized-pipeline