Humana joins UnitedHealth in flagging cost hit from rising surgeries
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[June 17, 2023]
By Manas Mishra and Leroy Leo
(Reuters) - Humana Inc on Friday joined larger health insurer
UnitedHealth in warning of a jump in medical costs this year due to
higher-than-expected demand for surgeries and other medical procedures.
Pandemic-driven restrictions and hospital staffing shortages had led to
long delays in elective procedures such as hip and knee replacements,
especially among older adults at higher risk of contracting severe
COVID-19.
"Now with restrictions being lifted and the public health emergency
coming to an end officially at a national level, we're going to see that
(surgeries) come back," said Pavani Rangachari, a professor of
healthcare administration and public health at the University of New
Haven.
UnitedHealth earlier this week said it had seen higher demand for
payouts over medical care in April, May and early June as
Medicare-eligible adults became more comfortable stepping into doctor's
offices again as COVID risks receded.
The warning wiped billions of dollars off the market value of health
insurers on Wednesday, while lifting shares of medical device makers and
hospital operators.
![](http://archives.lincolndailynews.com/2023/Jun/17/images/ads/current/charrons_bch_2022.png)
Kentucky-based Humana's shares fell another 2.6% on Friday, while other
insurers Elevance Health and Centene Corp were down 2% and 1%,
respectively.
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![](../images/061723PIX/health29.jpg)
Signage for Humana Inc. is pictured at a
health facility in Queens, New York City, U.S., November 30, 2021.
REUTERS/Andrew Kelly
![](http://archives.lincolndailynews.com/2023/Jun/17/images/ads/current/debbiesfloral_lda_060123.png) Demand for medical procedures is
also being fueled by an aging baby boomer population, a bump in life
expectancy and a shift towards value-based care where payments are
based on health outcomes rather than services provided, Rangachari
said.
Humana also noted elevated demand for outpatient surgeries and
dental services, as well as strong inpatient demand in recent weeks.
The insurer now expects its medical loss ratio - the percentage of
claims paid out compared with premiums collected - at the top end of
its full-year projected range of 86.3% to 87.3%.
Still, the company reaffirmed its adjusted earnings forecast of at
least $28.25 per share for 2023.
(Reporting by Manas Mishra and Leroy Leo in Bengaluru; Editing by
Anil D'Silva and Devika Syamnath)
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