ADP Employment | April 2020
We've used both the BLS and ADP employment reports as a real-time indicators of health care demand. At times, we've payed close attention to trends in insurance coverage as well, the last time being the roll out of the ACA (2014-2015) and the subsequent #ACATaper (2016-2017). As COVID-19 has impacted employment in industries unevenly, we thought it would be useful to look at the insurance coverage by industry to get a better sense of the impact to the demand for medical care.
Combining employment and insurance coverage by industry suggests the April 2020 saw a -10% decline in the most profitable segment of the insured medical consumer population. Some will maintain their health benefits through their furlough, by COBRA, the Exchange, or by enrolling in Medicaid, but many will not. In the Great Financial Crisis, COBRA delayed the full impact until mid-2010 where the 18 month COBRA benefit that had been highly subsidized by the Obama administration began to roll off.
Compared to the GFC, the COVID-19 crisis has shut in patient demand, literally, and we expect health care utilization will recover less rapidly than consensus and prices indicate. In addition to declines in the insured population, consumers are likely to remain cautious about contracting COVID-19 in a hospital, physician office, or other delivery settings. We are also seeing evidence that physician offices closed for COVID-19 may never re-open, limiting in-person care delivery capacity and by definition, consumption.
All data available upon request. Please reach out to with any inquiries.
Thomas Tobin
Managing Director
Twitter
LinkedIn
William McMahon
Analyst
LinkedIn
