Multidisciplinary Insights into Health Care Financial Risk and Hospital Surge Capacity, Part 1: Nearness to Death, Infectious Outbreaks, and COVID-19

Abstract

This series introduces epidemiological and medical concepts into understanding why health care costs and capacity pressures can be so volatile. COVID-19 is used as an example for many of the principles. The role of the nearness to death (NTD) effect in healthcare demand is discussed in relation to acute hospital bed utilization in U.S. states. The effect of the COVID-19 epidemic on international hospital capacity pressures is illustrated as the ratio of COVID-19 deaths per 1,000 hospital beds. Acute bed occupancy in U.S. states is compared using a new method for international bed comparison, revealing low bed occupancy relative to other developed countries. No relationship can be discerned between available nursing home beds and acute bed occupancy in U.S. states. COVID-19 deaths per 1,000 acute beds in U.S. states are also compared, along with a similar comparison with London in the UK. To illustrate the role of spatiotemporal granularity in infectious outbreaks the spread of COVID-19 through U.S. states is compared at county level. At the 16th October 2020, some 39% of U.S. counties have experienced less than a 2% increase in total deaths due to COVID-19, while just 15 cities (0.5% of counties) accounted for over 27% of COVID-19 deaths. By the 9th December, some 130 U.S. counties had not had a single COVID-19 death. The role of population density in the spread of epidemics is illustrated using COVID-19 and discussed in relation to both financial risk and hospital surge capacity. Los Angeles, a high population density city, implemented strict public health measures and initially reduced deaths by around 5- to 10-times compared to other similar high population density cities. Should health insurance policies be weighted according to small-area population density? This study raises questions, such as, does the health insurance underwriting cycle have a hidden infectious basis? Is the need for complex financial instruments in health care the outworking of our lack of fundamental understanding in this area? How big should an autonomous Health Authority or Health Insurer be to minimise financial risk? These and other issues will be discussed in the Parts 2 to 4 of this series.

The Journal's Publisher, James Unland, had the opportunity to interview the author about this series of articles.  Audio of that interview can be found HERE