- Molina Healthcare in the first quarter recorded its highest COVID-19 costs since the start of the pandemic, CEO Joe Zubretsky said Thursday.
- However, those costs were almost entirely offset by members cutting back on healthcare visits, a common trend throughout the pandemic, he said on a call with investors.
- After costs peaked in January, they quickly declined in the subsequent months. "When I say [COVID-19 costs] subsided during the quarter, it did so dramatically," Zubretsky added.
The omicron variant fueled a surge in cases and hospitalizations at the start of the year, exacerbating challenges for providers.
Still, payers like Molina are raising financial expectations for the year as they record an increase in members, revenue and profit in the first quarter.
On the Thursday morning call, executives also provided details on patient utilization aside of COVID-19. Many in the industry have raised concerns about delayed care throughout the pandemic coming back in the form of worsened outcomes and higher costs, though that has yet to be reflected in the data.
On core medical cost trends, Zubretsky said Molina "saw nothing in the quarter that surprised us or that was unusual." He added, "The ambulatory and outpatient settings are back in business and we're seeing an uptick, but nothing unusual."
Still, hospitals have said that they're struggling with rising expenses as utilization returns to normal. The American Hospital Association has urged Congress to step in and alleviate some of the pressure.
Hospital expenses per patient have increased almost 20% from 2019 to 2021, according to an AHA report released this week. Labor costs, which represent more than half of hospitals' total expenses, also are a challenge.
Molina's covered membership base increased 10% year over year to 5.1 million members in the first quarter as the suspension on state eligibility checks spurred Medicaid membership growth. Revenue of $7.8 billion and profit of $258 million rose 19% and 13%, respectively, compared with the first quarter last year.
Molina is raising its sales forecast for the year. It now expects to bring in premium revenue of $29.25 billion, compared with the prior estimate of $28.5 billion.