Preventable COVID-19 Hospitalizations Cost Health System Over $2B

Vaccines could have prevented hundreds of thousands of COVID-19 hospitalizations and billions of dollars, a new analysis from the Peterson-KFF Health System Tracker reveals.

The analysis estimated using data from the federal government that approximately 113,000 COVID-19 hospitalizations were avoidable in June and July of 2021 considering the widespread availability of vaccines. With the approximate cost of a coronavirus-related hospital admission being about $20,000, researchers estimated that these preventable COVID-19 hospitalizations cost the US health system $2.3 billion in just those two months alone.

The analysis defined a preventable COVID-19 hospitalization as a hospital admission for the coronavirus if the adult patient was not vaccinated by one of the authorized COVID-19 vaccines in the US. The data also excluded breakthrough cases among vaccinated adults that led to hospitalizations.

Researchers estimated that 98 percent of adults hospitalized with a COVID-19 diagnosis during the period were unvaccinated.

Additionally, about 84 percent of all hospitalizations primarily for COVID-19 were preventable, according to the analysis.

These estimates are just that, researchers stated. Specifically, the $2.3 billion in costs to the health system is a “ballpark figure” that is “likely an understatement of the cost burden on the health system from treatment of COVID-19 among unvaccinated adults,” they explained.

COVID-19 hospitalizations increased through August 2021 and the analysis did not account for the cost of outpatient treatment, which researchers said was “likely substantial.”

“A Medicare study found patients with COVID-related admissions had multiple outpatient visits (3.2 on average) that cost approximately $164 each (and this is only for those COVID-19 patients who were hospitalized at one point). In our analysis of pre-pandemic private insurance claims, we estimated a typical outpatient office visit cost $105 on average. An analysis of privately insured noted COVID-19 outpatient treatment costs can average $500-$1,000 per patient,” they wrote.

Unvaccinated people are also more likely to spread COVID-19 compared to those who have gotten vaccinated, researchers added. Preventable COVID-19 hospitalizations from these situations were also not represented in the analysis, they said.

The cost of preventable COVID-19 hospitalizations has significant implications, according to the analysis. Primarily, the cost of treating unvaccinated people for the virus not only incurs costs for patients but also taxpayers who fund public health insurance programs. These costs may also hike up private insurance premiums paid for by workers, employers, and individual purchasers, the analysis stated.

“Though there was of course a societal cost to develop and distribute vaccinations, the vaccines save the U.S. health system money in the longer run by preventing costly hospitalizations,” researchers wrote.

CMS recently reported that Medicare alone has spent $18.6 billion on fee-for-service payments for COVID-19 hospitalizations based on preliminary encounter data from January 1, 2020, through June 19, 2021.

The agency also estimated that the average Medicare payment per fee-for-service COVID-19 hospitalized beneficiary was $24,557, slightly higher than the estimated cost the Health System Tracker used in its analysis.

Medicare beneficiaries tend to be older and suffer from more chronic conditions that can be made worse by COVID-19, while those covered by private insurance companies are generally younger and healthier. A FAIR Health study used in the Health System Tracker analysis found that COVID-19 hospitalization costs for employer-sponsored and Medicare Advantage plans ranged from $17,094 for people over age 70 to $24,012 for people in their 50s.