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Economic Observations Update

AVBCC COVID-19 Webcast Series

Oncology treatment dynamics continue to bounce back toward baseline as of late summer 2020, reported a panel of experts during an Association for Value-Based Cancer Care August 20 webcast. These experts offered insights on the recent economic trends in the cancer ecosystem resulting from the COVID-19 pandemic, and explored what may lie ahead for patients and providers.

Murray Aitken, MBA, Executive Director of IQVIA Institute for Human Data Science, said that after substantial declines that began in March, in-person oncology visits for the last week in July reached 105.3% of the pre-pandemic baseline, new diagnoses reached 110.5%, and referrals reached 105.6%.  For oncolytics, weekly demand volume was at 96% of the baseline level overall; oral oncolytics were at 100.7% of the baseline, and intravenous oncolytics were at 96.6%. Meanwhile, telehealth visits peaked at approximately 10% of oncology visit interactions in late April and early May and moderated back down to about 6% over the past several weeks.

“The trend is fairly consistent in terms of some return to pre-pandemic baseline levels across these metrics,” Mr Aitken said. “In general, it looks as if we are returning to a level of activity that is around, or no more than, 10% below pre-pandemic levels. But what is clear is that we are not making up for all the disruption we saw earlier in the year. Even with the return to baseline levels, we are not seeing that backlog being cleared.”

Mr Aiken went on to report that the issue of insurance coverage is of growing concern because of persistent high levels of unemployment. “We are tracking shifts in coverage related to retail prescriptions being filled, and those have shown no significant changes through June. Similarly, the level of patients moving in and out of commercial insurance so far has not been any greater than at this point in the prior year, but that is likely a reflection of people being put on furlough or otherwise maintaining insurance coverage. But changes here is something we will be watching for,” he said.

Mr Aitken noted that so far, the COVID-19 pandemic has not appeared to affect the US Food and Drug Administration oncology pipeline. As of August, 11 new molecules have been approved by the agency for 2020, just 1 fewer than in 2019. “From an innovation perspective, we have seen no fundamental slowdown,” he said. “I think we will see more focus on the issues of disparities, access, and affordability as we go through the balance of the year and into 2021, which comes back to things like drug pricing, reimbursement levels, plan design, and sites of care delivery.”

Despite a dramatic reduction in spending, the United States continues to spend a high proportion of its gross domestic product on healthcare, noted Bruce Pyenson, FSA, MAAA, Principal and Consulting Actuary at Milliman. “And for-profit hospitals continue to do well,” he said, pointing to the fact that chains such as HCA and Tenet posted significant second-quarter profits despite the pandemic, and that there have been no significant widespread downgrades in not-for-profit hospital bonds. “One of the reasons these hospitals have still been doing well is that they have variable costs. There were a lot of layoffs, and purchases of supplies went down, so they were able to flex their expense side. The bailouts and the extra funding were also significant,” he added.

Mr Pyenson predicted that COVID-19 will accelerate trends that began before the pandemic hit. For example, Genesis Healthcare, one of the nation’s largest post–acute-care chains with hundreds of skilled nursing and other facilities across the country, has raised questions about whether it will be able to remain a growing concern after losing $67 million in revenue associated with COVID-19 during the second quarter of 2020. “Post-acute, long-term care is being downsized as people are more reluctant to see their parents in these facilities,” he said. “This will accelerate a long-term shift to getting people to age in the community.”

Mr Pyenson also predicted that COVID-19 will cause a permanent shift by both providers and patients to less aggressive courses of treatment, and that physician groups will find themselves more likely to consolidate with larger integrated delivery networks. “These practices, including specialist groups, are not nearly as well capitalized as hospital organizations and their capacity to deal with these changes has been limited,” he said.

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