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Viewpoints from Adam Okun

Every action, event, and experience has a direct effect – which cascades into a variety of indirect, ripple effects. Human nature is to focus on the primary effects, but as we gain distance from the initial shock, the second-order effects of this pandemic on the economy, healthcare system, and humanity are coming into greater focus – and wow, are they producing some fascinating results.

This is not an economic blog so I’ll go light on this point… While all the focus continues to remain on the stock market and unemployment, there appears to be a tectonic shift taking place in urban commercial and residential real estate. Many skyscrapers are remaining vacant for the foreseeable future, retailers and restaurateurs are renegotiating leases or abandoning locations that previously offered them immense foot traffic, and young professionals and families are seeking the safety of suburbia. We are likely still several months from seeing the real impact of this near-term deurbanization, but it’s hard not to see how that won’t vastly impact the economic reality and vibrancy of city life for years to come.

On the health and benefits front, there are a variety of dramatic market changes – some of which are temporary, but many that feel may have a more lasting impact:

The item getting the greatest focus is telemedicine.

Early indications are that virtual visits are up 20 times from the same period one year ago and the number of doctors subscribing to these services has increased two to three times. We would expect this trend to continue with lasting effects – particularly in the primary care market.

Organ transplants are down dramatically.

Far fewer young people with healthy organs have died in auto accidents (the primary source of organ donations). An executive at a major insurer shared this with me recently – and while it’s positive news that there have been fewer traffic fatalities, that is going to create a large backlog for recipients.

Requests for backup childcare services have seen a big increase.

As long as schools and camps remain closed, or intermittently reopen and close in the fall and winter, employees with children are going to need support – and employers are looking at service providers.

Immunizations and preventive services have dropped precipitously.

It’s hard to see how this won’t result in some increase in non-COVID disease outbreak and mortality rates for preventable illnesses. Alongside this decline, large healthcare and ambulatory facilities are suffering massive losses due to drops in outpatient and elective surgeries, which afford the revenue and margins for them to provide lower-margin emergency room and inpatient care.

Dental and vision insurers are offering clients wildly attractive multi-year rate locks.

Carriers that are sitting on huge surpluses in premiums due to reduced claims spend have recognized that fewer employers will change medical carriers in this market and are offering rate locks on insured plans to drive business. As a result, we are seeing clients move self-funded plans – which typically save them money relative to the insured market – to fully-insured plans for significant short-term savings.

Other news and notes…

include an increase in mail-order prescription drug programs, utilizing employee activation programs like Peerfit and Virgin Pulse for at-home wellness services, and exploring novel, low-cost networks and programs for part-time, furloughed and terminated employees.

Finally, I’d like to suggest that on a humanitarian level second-order effects can be dramatic as well! We’ve been hearing about all the emotional health challenges this pandemic has caused, with increases in addictive behaviors, domestic violence, and depressive illness. Perhaps an additional positive email to a friend, a smile over Zoom, or an encouraging phone call to a struggling colleague can help alleviate some of the suffering other people may be facing…


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Adam Okun

Northeast Region Employee Benefits Practice Leader – New York, NY