COVID-19 Has Pushed National Health Spending Above $ 4 Billion: A Closer Look

The COVID-19 pandemic raised national health spending to $ 4.1 trillion in 2020, an increase of 9.7%, according to a recent report.

The Center for Medicare and Medicaid Services compiled the spending figures in a Dec. 15 report published in Health affairs. The worst public health crisis in a century has resulted in a dramatic global increase in health spending.

However, health spending in some areas has not necessarily seen sharp increases, another ripple effect of the coronavirus pandemic. In fact, spending has decreased in some areas.

The financial numbers for the coronavirus pandemic are pale compared to the really big numbers. More than 800,000 people have died from COVID-19 and more than 50 million cases have been reported.

Yet the report on health spending in 2020 offers a useful perspective on the pandemic. Here’s a quick look at some of the important and intriguing numbers.

Spending peak

National health spending rose 9.7% in 2020, well above the 4.3% increase in 2019. This is the largest year-on-year percentage increase since 2002.

From a broader perspective, national health care barely exceeded $ 3 trillion in 2014. And in 2020, health spending topped $ 4 trillion.

Largest federal share

Federal health spending jumped 36% in 2020 (growth in 2019: 5.9% in 2019). The federal government has allocated much of this money to hospitals, doctors and long-term care facilities.

The federal government accounted for a larger share of all health spending (36% in 2020, compared to 29% in 2019).

The hospital struggles

Hospital spending reached $ 1.3 trillion in 2020, an increase of 6.4%. But this essentially reflects the increase in 2019 (6.3%).

Hospitals have received more help from the federal government through COVID-19 relief programs, as well as higher Medicaid spending on hospital care.

However, hospitals have seen less revenue from private insurers. Spending on private health insurance decreased by 6.6% in 2019 (compared to an increase of 6.6% in 2019).

Hospitals suffered shortages of essential supplies in 2020, and the federal report suggested this may have deterred some people from seeking care. The days of hospitalization decreased by 4.7% and discharges by 9.8%.

At the same time, hospital prices rose 3.2% in 2020, according to the producer price index. Hospital rates increased by 2% in 2019.

Less personal expenses

Direct health care spending actually declined in 2020. Really.

The report says direct consumer spending fell 3.7% in 2020; it increased by 4.3% in 2019.

While a drop in personal spending might be surprising, some patients failed to go to the doctor or dentist during the pandemic, especially in the first months after the coronavirus emerged. Consumers were also less likely to go to the hospital, at least for reasons unrelated to COVID.

Half of Americans have delayed or ignored some health service in the past year, a Kaiser Family Foundation Survey find.

Prescription spending slows

Prescription drug spending increased in 2020, but at a slower pace than the year before.

Prescription drug retail spending rose 3% in 2020, up from a 4.3% increase in 2019. Again, some people chose not to fill prescriptions, while some prices fell. , according to the report.

According to the KFF survey, about 3 in 10 Americans surveyed said they did not fill a prescription because of the cost.

Doctors and clinical services

Spending on medical and clinical services reached $ 809.5 billion in 2020, an increase of 5.4%. By comparison, spending increased 4.2% in 2019. COVID-19 relief funds accounted for the bulk of the increase in spending in 2020.

At the same time, the growth in Medicare and Medicaid spending has slowed considerably. Medicare spending rose only 0.5% in 2020, after increasing 8.9% in 2019. The report says the change reflects a decline in fee-for-service spending.

Medicaid spending has also slowed, if not just as dramatically. Medicaid spending increased 4% in 2020, following a 6.5% increase in 2019.

Private health insurance spending on medical and clinical services fell for the first time since 2013. Spending by private insurers fell 2.6% in 2020; it increased by 2.6% in 2019.

Private insurance subscriptions have fallen

In 2020, private health insurance enrollments fell by 1.7 million (0.8%). The number of people on private employer-sponsored plans fell by 2.3 million, but an additional 600,000 people signed up for Marketplace plans.

Medicare, Medicaid rolls increased

After two years of decline, Medicaid registrations have increased due to the pandemic.

An additional 3.7 million people signed up for Medicaid in 2020, an increase of 5.1%. Some applied for Medicaid after losing their jobs during the pandemic, while the federal government offered more medical assistance to states that maintained Medicaid eligibility.

Medicare enrollments slowed slightly in 2020. Enrollment increased 2.1% in 2020, up from 2.6% in 2019.