Rising utilization rates may spell trouble for payers

Increased utilization rates for medical services and an easing hospital labor shortage could mean smaller profit margins for payers, The Wall Street Journal reported Nov. 29. 

UnitedHealth Group's projected earnings per share for 2023 are between $24.40 and $24.90, slightly below analysts' predictions of $24.92. The slight miss in the prediction is due to a higher medical loss ratio, which is currently 82.6 percent. 

Raymond James analyst John Ransom told the Journal that as more physicians and nurses return to work, medical service utilization rates could increase. Mr. Ransom added the "tripledemic" of flu, COVID-19 and RSV could also cut into profit margins. 

Though utilization could increase, Mr. Ransom told the newspaper there is no "long-dated" backlog of elective procedures put off during the pandemic that will emerge in the coming months. 

"We think we would have seen it by now," he said.

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