COTTINGHAM & BUTLER OVERVIEW · 2020. 4. 7. · Cottingham & Butler does not accept any liability for any direct, consequential or other loss arising from reliance on the contents

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• National provider of employee benefit, insurance brokerage, risk and safety management solutions

• Established in 1887

• Privately owned and operated

• Headquartered in Dubuque, IA, with operations in 20 states

• 6th largest independent and privately held insurance broker in the U.S. (25th largest overall)

• Over 5,000 customers

COTTINGHAM & BUTLER OVERVIEW

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COTTINGHAM & BUTLER RESOURCE CENTER

https://www.cottinghambutler.com/covid19/

https://www.cottinghambutler.com/covid19/

Presented By |

Analyzing Potential COVID-19 Costs

For Self-Funded Plans

Craig Herbst | AVPJames Ottavi | Benefits Analyst

April 7th, 2020

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THE CURRENT STATE OF ASSESSING THE EFFECTS OF COVID-19

…. And Constantly Changing

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AGENDA

Macro-Level Statistics Regarding COVID-19

Framing Potential Costs and Offsets

Cottingham & Butler COVID-19 Cost Modeler Demonstration

Wrap-Up, Q&A, & How To Get More Information

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JOHNS HOPKINS | CURRENT COVID-19 HOT SPOTS

Source(s):Johns Hopkins University | Coronavirus Resource CenterImage as of 4/5/20 @ 5:21 PM

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JOHNS HOPKINS | TOP 10 HIGH-GROWTH AREAS – LAST 7 DAYS

Source(s):Johns Hopkins University | Coronavirus Resource CenterData as of 4/5/20 @ 5:21 PM

1,022

12,496

10,44411,545

1,1612,407

5,2763,953

14,225

34,124263.7%

154.9%

0%

50%

100%

150%

200%

250%

300%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

ID LA PA FL OK VA CT IN MI NJ

Gro

wth

Rat

e |

Last

7 D

ays

Tota

l Cas

es

Total Cases and Growth RateTop 10 Highest Growth States

Total Cases Growth Rate | Last 7 Days

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COVID TRACKING PROJECT | COVID TESTING ACROSS STATES

Source(s):COVID Tracking ProjectData as of 4/5/20 @ 5:21 PM

19.6

15.6

12.8 12.5 12.4 12.1 11.811.2

10.0 9.7 9.6 9.3 9.2 9.0 8.98.2

6.8 6.75.9 5.7

5.2 5.0 4.7 4.5 4.3 4.2

2.5

0

20,000

40,000

60,000

80,000

100,000

120,000

0.0

5.0

10.0

15.0

20.0

25.0

UT NC WI TN AZ WA MO OH ID TX SC NV FL VA CA MD AL PA MA CO IL IN LA MS GA CT NY

Tota

l Cas

es

Test

s to

Po

siti

ves

Rat

io

Testing Ratio and Case CountBy State (at least 1,000+ Cases)

Total Cases Tests to Positives RatioMore TestsMore AccessibilityUsually Less Infections

Less TestsLess Accessibility

Usually More Infections

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A CASE STUDY | NYC COVID-19 IMPACT BY AGE AND COMORBIDITIES

• As of 4/2, the vast majority of COVID-19 deaths in NYC are attributable to people aged 65+ and/or have an underlying condition

Age Bracket TotalNo Underlying

ConditionsUnderlying Conditions

0-17 1 0 1

18-44 90 7 83

45-64 382 13 369

65-74 376 1 375

75+ 713 3 710

Total 1,562 24 1,538

*Deaths as of 4/2/2020 @ 9:30 ET

**Underlying illnesses include Diabetes, Lung Disease, Cancer, Immunodeficiency, Heart Disease, Hypertension, Asthma, Kidney Disease, and GI/Liver Disease.

0.06% 5.76%

24.46%

24.07%

45.65%

% of NYC COVID-19 Deaths by Age Bracket

0-17 18-44 45-64 65-74 75+

100.0%

92.2%

96.6%

99.7% 99.6%

88.0%

90.0%

92.0%

94.0%

96.0%

98.0%

100.0%

0-17 18-44 45-64 65-74 75+

% of NYC COVID-19 Deaths With An Underlying Condition

Source: State of NY Department of Health

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JP MORGAN & IHME| PROGRESSION AND DURATION OF COVID-19

JP Morgan• US beginning to near peak of COVID

cases

• Some other countries ahead of us- EU: Germany, France, Spain, Italy- East Asia: China, South Korea,

Singapore- Can look to take lessons from these

countries on what works/doesn’t

Institute for Health Metrics Evaluation (IHME)

• US peak anticipated to be around middle of April- Some states may see peaks sooner (NY)

or later (IL)

• Large variations in terms of predicted severity

Today

Source(s):J.P. Morgan & Institute for Health Metrics EvaluationData as of 4/6/20 @ 12 PM

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MACRO-LEVEL TAKEAWAYS | 3 BIG TRENDS

COVID Cases Continuing to Increase• US specific cases: 330K+

• Expected to hit peak of epidemic within coming weeks

Case Concentration Moving Beyond Northeast• Northeast still epicenter of epidemic in US, in both gross cases and growth rate

• However, Southeast and Midwest regions starting to see uptick in growth rate

Testing Varies Significantly by State• Testing access and frequency vary widely by state

• The access/frequency of testing can impact infection spread, cost, and the severity of a COVID outbreak in a region

• Some states leading the charge on testing include:- North Carolina- Arizona- Wisconsin

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AGENDA





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COST FRAMEWORK | HOW WE THINK ABOUT COVID-19 COSTS

COVID-19 Testing Costs

COVID-19 Treatment Costs Elective Deferrals

Source: Benefits Source Technologies

UTILIZATION INCREASES

COVID-19 testing

ER use for flu & cold symptoms

Higher-risk patients with respiratory issues may remain inpatient longer than normal

Infants with respiratory issues may remain in the NICU longer than normal

UTILIZATION DECREASES

Many elective procedures will be delayed

ER avoidance for less critical issues

Many doctor's appointments will be cancelled and may or may not be rescheduled

Telemedicine visits will replace some office visits

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COVID TESTING COSTS | A FUNCTION OF GEOGRAPHY, TESTS INCLUDED & PROVIDER

Geography

• Urban areas likely have more access

• Infection outbreak areas have more tests

• Testing Rate Range: 5%-40%

Number of Tests Average Cost per Test

Tests Included

• COVID-19 Test

• Other tests that could be run:- Pneumonia Test- Influenza Test- Respiratory Virus

panel

Place of Service

• Tests run at hospitals will cost more than at office or lab

• Price difference can be high

Tests Included

• COVID-19 Test: - ~$50 per test

• Pneumonia Test: - ~$70 per test

• Influenza Test: - ~$96 per test

• Resp. Virus Panel:- $420 per panel

OVERALL, testing costs for COVID-19 dependent on geography, tests included, and place of service

• Our assumption is testing today will probably include (a) more tests at hospitals, and (b) panels outside of COVID-19

• If quicker and cheaper COVID tests hit the market in a timely manner, we anticipate costs per test going down, and testing rates going up

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TREATMENT COSTS | THREE PRIMARY VARIABLES

Infection Probability

• Function of Geography and Policies Taken for Social Distancing

Case Severity

• Function of Age & Health

Cost of Treatment

• Function of Geography and Network Reimbursement Contracts

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CASE SEVERITY | HOSPITALIZATIONS, CRITICAL CASES, & FATALITIES

• Rates are likely overstated given many individuals that contract COVID-19 will not be tested nor will they go the hospital for care

• Flexible demographic & geographic assumptions are incorporated in the C&B modeler

0.10% 0.30%1.20%

3.20%4.90%

10.20%

16.60%

24.30%

27.30%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

0 to 9 10 to 19 20 to 29 30 to 39 40 to 49 50 to 59 60 to 69 70 to 79 80+

COVID-19 Hospitalizations By Age

5.0% 5.0% 5.0% 5.0% 6.3%

12.2%

27.4%

43.2%

70.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%


COVID-19 Hospitalizations That Are Critical By Age

0.002% 0.006% 0.030% 0.080% 0.150%0.600%

2.200%

5.100%

9.300%

0.000%

1.000%

2.000%

3.000%

4.000%

5.000%

6.000%

7.000%

8.000%

9.000%

10.000%


COVID-19 Fatality Rate By Age

Primarily Medicare Primarily Medicare

Primarily Medicare

Source(s):Imperial College of London | MRC Centre

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DEFERRALS | REVIEWING ELECTIVE DEFERRALS & CANCELLATIONS

On March 18th, Center for Medicare & Medicaid Services (CMS) announced that all elective surgeries and non-essential medical & dental services be delayed to free up essential healthcare resources

Source: CMS.GOV

Tiers Action Definition Location Examples

1A Postpone surgery/procedureLow acuity surgery; healthy patient; outpatient & non-life threatening

HOPD or ASC with low or no COVID-19 census

Carpal tunnel, colonoscopy

1B Postpone surgery/procedureLow acuity surgery; unhealthy patient


Endoscopies

2A Consider postponingIntermediate acuity surgery; healthy patient; inpatient stay


Low risk cancer, non-urgent spine & ortho, elective angioplasty

2B Consider postponingIntermediate acuity surgery; unhealthy patient; inpatient stay


3A Do not postponeHigh acuity surgery; healthy patient; inpatient stay

HospitalMost cancers, neurosurgery, highly symptomatic patients

3B Do not postponeHigh acuity surgery; unhealthy patient; inpatient stay

HospitalTransplants, trauma, cardiac with symptoms

HOPD: Hospital Outpatient DepartmentASC: Ambulatory Surgery Center

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ELECTIVE SAVINGS | FIVE IMPORTANT VARIABLES TO KEEP IN MIND

Elective surgery deferrals have been included in the modeler, assuming 3-months of deferred or canceled services.

Variable Context

1. Deferral = TemporaryDon’t Forget Future Time Periods

Most procedures will be performed at a later date thus deferring costs, not eliminating them. Some office visit cancellations will be permanent.

2. Population Demographics Matter Enrollee age/gender can skew results

3. Elective Deferral Assumptions Vary Materially Estimates vary from 20%-50%+

4. Geography/Network Affects Cost of Care The cost of care can vary 15%-40% depending on locale and PPO network contract

5. Service Mix Will Vary From Group to Group Ortho procedures vs. cardio & cancer

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AGENDA





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MODELER | GOAL, CAVEATS AND DISCLAIMER

Modeler Goal: Help company’s identify what the additional cost COVID-19 will put on their health plans

Caveats: Due to the fluid nature of the COVID situation, multiple factors can affect the calculators accuracy, including:1. Changing Infection Rates & Policies

2. Testing Advancements

3. Outbreaks at Specific Locations

C&B Disclaimer• Cottingham & Butler makes no representation, warranty or undertaking, express or implied, as

to the accuracy, reliability, completeness or reasonableness of the information. Any assumptions, opinions and estimates expressed in the information constitute Cottingham & Butler’s judgment as of the date thereof and are subject to change without notice. Any projections contained in the information are based on a number of assumptions and there can be no guarantee that any projected outcomes will be achieved. Cottingham & Butler does not accept any liability for any direct, consequential or other loss arising from reliance on the contents of the information. This document is strictly private, confidential and personal to its recipients and should not be copied, distributed or reproduced in whole or in part, nor passed to any third party.

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MODELER | OVERVIEW OF INPUTS

Census Input Reason NeededExample Company

Characteristics

Gender Member-level adjustments for hospitalization, critical case, and fatality rate

% Male: 50%

DOBAverage EE Age: 41Average Member Age: 31

RelationCalculation of different budgetary cost rates (PMPY vs. PEPY)

Total EEs: 482Total Members: 1,000

Zip CodeInfection and testing rate adjustments down to county-level

Madison, WI: 33%Chicago, IL: 33%Nashville, TN: 33%

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MODELER | TESTING, INFECTION, AND HOSPITALIZATION RATE

Number Tested | The COVID Tracking Project• 161: Based on zip codes, estimated ~16% of population will get tested

Number Positive | The COVID Tracking Project/Johns Hopkins• 19: Based on positive test rate within the areas that the members are located, 19 members will

be tested positive for COVID-19

Symptoms | Imperial College of London , MRC Centre• 1: Based on member demographics, expected to have 1 individual with severe symptoms

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MODELER | COST DRIVERS AND NET SPEND

Diagnostics | CMS Clinical Laboratory Fee Schedule

PCP & ER | HealthCare Cost Institute

Inpatient Admits | HealthCare Cost Institute

Elective Surgeries | HealthCare Cost Institute

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MODELER | ADDITIONAL INPUTS AND SCENARIO TESTING

Medical Claims Risk

• Modify the level of general claims & health risk your population has relative to national average

Geographic Price Adjustments

• Based on your location, can increase/decrease the expected costs for services

% of Members Tested

• Based on recent outbreaks near you or in your community, can override the % tested calculation and see how different testing rates impact expected costs

Inpatient Cost-Sharing

• Change whether to waive all inpatient treatment cost-sharing or not

Elective Surgery

• Change whether to include the elective surgery modification or not

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AGENDA





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BIG TAKEAWAYS | 3 TAKEAWAYS

The COVID-19 Pandemic is Serious and Fluid• The growth rate in infections continues to be exponential rather than linear• Currently the Northeast region is the epicenter of cases in the US

- However, case counts beginning to rise in Midwestern and Southeastern states

• Due to this fluidity, cost projections for COVID-19 should be run frequently when new developments occur and should aim for always including most recent data

Costs Highly Dependent on Geography• Density of infections within different regions and counties

- New York > Iowa, New York City Metro > Rural Upstate New York

• Density of infections correlated with costs- If low density area, potential for reduced costs over 3 months

Accounting for Elective Offsets Important• Projections should look holistically at the increases and decreases in healthcare

services• Including the impact of delaying or cancelling other procedures (PCP Visits, Elective

Surgeries) significantly offsets some of the expected COVID spend

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BEST PRACTICES | 3 BEST PRACTICES

Keep Track of the Data• Keep tabs on credible sources for testing and outbreaks

- COVID Outbreaks: John Hopkins University | Coronavirus Resource Center- COVID Testing Numbers: The COVID Tracking Project

Know the Primary Components of COVID-19 Spend• Know the key components of spend associated with COVID-19, what factors increase

drive those components, and how to mitigate them- Diagnostic Testing: Numbers can increase when outbreaks occur within a region,

organization, or location- Inpatient Stays: Numbers can increase when members delay treatment or spread to at-risk

members

Stay Connected and Informed• Know the resources available to you through the C&B team• Talk with our experts regarding policy and analysis updates• Follow business/safety best practices put forth by CDC, WHO, and other reputable

organizations

https://coronavirus.jhu.edu/map.html

https://covidtracking.com/

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MOVING FORWARD | HOW C&B CAN HELP

C&B is Not Charging Additional Modeler Fees

• We’ve seen and heard about many brokerage/consulting firms charging for a customized modeling experience

• C&B is offering this as an additional service, free-of-charge

For those wanting a specific modeling demonstration:

• Current clients- Contact your account teams for more information

• Non-clients- If you’d like more information, please say so in the webinar reviews and a C&B

representative will contact you to see how we can accommodate your needs

QUESTIONS?

Documents

COTTINGHAM & BUTLER OVERVIEW · 2020. 4. 7. · Cottingham & Butler does not accept any liability for any direct, consequential or other loss arising from reliance on the contents