The coronavirus pandemic means health care companies are as busy as they’ve ever been — one reason why Cigna (CI) is expecting a strong year despite a decline in non-coronavirus related medical procedures, its CEO told Yahoo Finance in an interview.
The COVID-19 crisis has overwhelmed the health care industry. It has also forced patients, many of whom have been sheltered at home, to forego certain types of elective treatments.
Many big companies are rising to the challenge. Cigna was one of the first to waive all costs to patients related to the outbreak, and on Tuesday announced a new initiative to raise $100 million for workers impacted by the coronavirus.
Meanwhile, the company, which is largely an administrator for employer self-funded plans, estimates that savings from elective procedures is having a trickle-down effect.
“So our clients...are seeing the direct benefit of that immediately, as are their employees on a go-forward basis and we like that level of alignment,” according to CEO David Cordani.
‘See the best of humanity’
In particular, insurers are finding themselves in a strong position as the pandemic decimates the economy. The pause on widespread, expensive health care utilization is resulting in more cash on hand — which is also partly behind insurers doing more to boost local businesses, communities and first responders affected by the crisis.
For its part, both Cigna and New York Life are helping to raise $100 million for those on the front lines, as the numbers of health care workers testing positive for COVID-19 rise. On Tuesday, the companies announced a new fund to support families of frontline professionals who have died from the virus, starting with a $25 million commitment each, the two announced Tuesday.
The funds will begin disbursing in May and start at $15,000 per family, with up to an additional $60,000, depending on the need. The money covers housing, food, medical care, transportation and education, among other needs.
“It’s unfortunate that it takes a crisis sometimes to appreciate things, but conversely, in the face of a crisis, you see the best of humanity, and in this case I think you’re seeing the best of some corporations leaning in,” Cordani told Yahoo Finance.
“Our fund is inclusive, so it’s beyond the medical professionals, which are really important. It takes the team into consideration— the orderlies, the cafeteria workers, the individuals who keep the facilities clean and safe,” he said.
In addition, the two companies will pay the administrative fees for the third party and for the disbursements, “to make sure the administrative fees don’t encroach upon the donations that are intended to be for the beneficiary.”
Cigna is slated to report its first quarter earnings next week. Amid a slew of companies withdrawing 2020 guidance in light of uncertainty from the virus, Cordani expects 2020 to be a strong year.
“We operate a very well-positioned, divers portfolio...and that business has performed really well throughout 2019,” he said. “We stepped into 2020 with attractive growth outlook, and I expect we will continue to be able to grow those businesses.”
Cordani added that despite having to respond to the outbreak and pivot operations, the company has continued to invest in innovation for ongoing growth, “because while it’s a challenging time you’re building for the future and you’re delivering for the future.”
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