Christine McCarthy, a develop for over 20 years and a palliative nurse for the past year, sits for a portrait on an empty hospital bed at Massachusetts Community Hospital in Boston on Apr. 2, 2020. Here at the states largest hospital, staff are coping with unprecedented realities in this coronavirus pandemic and acutely worried about what is yet to come. There is an odd juxtaposition inside this normally bustling world-renowned hospital: Expatiate oned intensive care units are packed with COVID-19 patients, while other floors and places such as ancestors waiting rooms are deserted, quiet.
Erin Clark | Boston Globe | Getty Images
UnitedHealth Group earnings on provide the first window into the financial impact of the coronavirus crisis when it comes to health insurance rates from testing and hospitalizations, as well as the toll on providers from the cancellation of nonemergency care.
Analysts expect the health-care Amazon to report on Wednesday adjusted earnings of $3.63 per share on $64.4 billion in revenue, according to the consensus estimate intentional by Refinitiv.
Covid-19-related medical costs are not expected to weigh on UnitedHealth’s first-quarter results, because coronavirus examining and confirmed infections in the U.S. ramped up late in the quarter, during March.
For the current quarter, analyst expect that the drop-off in high-priced elective surgical customs will likely offset the insurers’ higher spending on coronavirus-related costs. Last month, all of the major insurers deferred out-of-pocket costs on coronavirus testing and medical visits, while this month, many extended first-dollar coverage for hospitalizations, as proficiently.
Yet, UnitedHealth is also spending more on its overall pandemic response, pledging more than $50 million to purvey medical support in cities and states that have elevated virus outbreaks, and providing $2 billion in advanced payments to sanatoria and physicians over the last week to help them with liquidity constraints.
2020 outlook a lot less clear
Investors inclination be looking for UnitedHealth to provide a view into coronavirus medical costs, but analysts at Piper Sandler cautioned in a note to patrons that early data on medical claims may not provide much clarity; noting “with much of the claims preparing/coding teams now working from home at hospitals and insurers” overall billing and payments could be slower than rational for the industry.
UnitedHealth’s analytic team may have some view on the spread of the virus, but it may not be as useful as its flu-tracking data because of the predetermined testing on a national scale.
“It is entirely possible that UnitedHealth could withdraw its 2020 guidance due to the uncertainty. This would not affair us,” said Cantor Fitzgerald analyst Steven Halper in a note to clients, adding that he believes the health-care colossus is well positioned to withstand Covid-related headwinds.
Unemployment and health insurance losses
UnitedHealth is the nation’s largest trim insurer, ending 2019 with more than 48 million members, with over 19 million of them in firm plans. The company warned late last year that its employer numbers would dip in the first half of this year, after some critical accounts were not renewed.
The rising tide of employer furloughs and layoffs could lead to overall industry reductions in business insurance memberships.
“The big factor is how long does this last and how much of these employees are ultimately back on the payroll,” mean Kyle Roland, senior fixed income analyst at Wells Fargo Securities, adding that insurers with marvellous exposure to the Medicaid government health care safety-net program will be better positioned in a downturn.
“If you’re UnitedHealthcare, Centene or Anthem, with enormous Medicaid exposure … you can onboard those members on a different platform at a lower margin, but some others are not going to participate in that luxury,” Roland said.
He notes rival Cigna may benefit near term from having a portlier employer-based membership that may not be as heavily impacted by Covid-19 hospitalizations, but longer term the insurer could face exorbitant losses in an economic downturn.
“In a material downturn where large employers are experiencing heavy layoffs, Cigna inclination undoubtedly face a fair amount of pressure in being unable to recapture lost membership via government programs,” he averred.
Longer rebound in nonessential care
Nearly half of UnitedHealth Group’s operating profits come from its Optum utilities division, which includes surgical centers and an army of more than 30,000 physicians and nurses, and data analytics and consulting.
The gathering has shifted nonemergency care to telehealth visits and many of its physicians have been providing care on the front kinds of the Covid pandemic, but investors will want to hear the company’s outlook for a potential rebound in the second half of the year for outpatient surgery and nonemergency responsibility.
“Optum could be affected by fewer elective procedures at surgery centers, and fewer home-health visits, and physician shtick indulgence visits. Clearly, the ultimate impact is difficult to quantify,” Halper said.
The postponement and cancellation of higher-margin elective systems has weighed on both hospitals and ambulatory surgical operators. Envision Healthcare, a physician staffing firm with 27,000 clinicians, said earlier this month that its long-suffering volumes are down 70% for its ambulatory surgery and anesthesia services. The firm, which is owned by KKR & Co., has slashed executive pay in an feat to preserve cash.
This month, hospital operator Tenet Healthcare furloughed 500 full-time employees, and withdrew its first-quarter and full-year conduct amid Covid-19 uncertainty. Last month, outpatient surgery provider Surgery Partners withdrew its 2020 earnings rule.
If the crush of the Covid-19 pandemic subsides by summer, it’s possible hospitals and surgical centers will be able to reschedule orthopedic and cardiac stent conducts that have been postponed for sometime in the second half of the year.
“Personally, I think it could take a shallow bit longer to get that volume back than maybe people think,” said Roland, who notes most orthopedic patients are close-knit to 60, an age puts them at great risk for Covid-19.
“If I think about that, do I want to rush back into a sanatorium in August, September, if I know I don’t have to have it done immediately?” he said.
UnitedHealth is scheduled to report first-quarter upshots on Wednesday, ahead of the opening bell.