Empty and busy at the same time

One of the big actuarial challenges for insurers setting rates for 2021 and a massive current challenge for hospitals is that elective surgery counts crashed in March as hospitals cleared space to prepare for an income surge.

From Credit Suisse Hospital Volume Tracker:

April Survey: March Inpatient Volumes Down 10.9% year over year; Outpatient Visits Down 13.5%

Inpatient surgeries down 11.7% in March (down 4.0% for the full first quarter); outpatient surgeries down 15.1% (down 2.5% for full Q1

— Altarum SHSS (@Altarum_SHSS) April 20, 2020

I am betting that April inpatient volume will be down, year over year, by an even greater amount than March.  Many hospitals were still performing some elective/deferable procedures in the first week or two of March.  The brakes did not get slammed until the middle of the month. April, most hospitals have been in full COVID-19 mode with all flexible resources reserved for incoming pandemic patients.

I expect insurers to report that their first quarter results will either be in line with expectations or significantly more profitable than expectations as a good chunk of claims that they expected to pay never happened in the last two weeks of March.  At the same time, hospitals and physician practices are in a massive hole if they are in primarily fee for service payment regimes because their marginal visits evaporated.

There are two big questions for both insurers and hospitals: how many and when these March and presumably April cases will return?

An answer to that question if a multi-hundred billion dollar answer.