2021 Healthcare Spending, Hospital Admissions Lower Than Expected

August 17, 2021 - Hospital admission rates and 2021 healthcare spending overall were below expected levels through early April 2021 and researchers projected that these trends could continue through June 2021, according to a Peterson-Kaiser Family Foundation Health System Tracker brief.

The researchers used Epic Health Research Network data on 10 million admissions from a data set that covers 112 million patients in 250 hospitals from 47 states. They combined this data with data from the Bureau of Economic Analysis.

Although the hospital admission rate was lower than the historic trends for first quarter admission rates, coronavirus cases still had a significant influence on the hospital admission rate.

Over the course of the first quarter of 2021, the hospital admission rate reached nearly 90 percent of pre-pandemic levels. 

In the first full week of April 2021, the hospital admission rate continued at 85.5 percent of the expected trajectory. However, after removing hospital admissions that were due to a coronavirus diagnosis, the admissions rate was 80.7 percent of historic levels.

However, hospital spending is just one element of the subdued trends in overall healthcare spending. As of January 2021, healthcare spending overall has returned to patterns witnessed from 2017 through 2020, as personal consumption expenditures data shows.

Personal consumption expenditures on hospitals and ambulatory care in June 2021 were 7.1 percent lower than expected healthcare spending. That same month, personal consumption expenditures data for hospitals was 4.1 percent lower than historic levels.

The unexpected dive in healthcare spending could point to patients foregoing care, instead of rescheduling appointments that they missed in 2020. Pandemic-related financial barriers may prevent individuals from seeking care in 2021 as the nation’s economy continues to recover. 

Additionally, the state of the healthcare workforce may cause delays in care as strained, smaller hospital staff have less flexibility and time for appointments.

These changes in hospital admission rates and healthcare spending will have an impact on health insurers’ outlooks for 2021.

Health insurers raked in profits in 2020 but argued that these profits would go toward delayed care in 2021. 

Payers counted on an influx in healthcare spending in 2021. A Wakely Contracting Group study projected that coronavirus-related healthcare spending would reach approximately $546.6 billion for benefit years 2020 through 2021. However, experts warned that these projections could vary based on the coronavirus infection rate and the costs of deferred care.

With the most recent Peterson-Kaiser Family Foundation Health System Tracker data in mind, payers may expect to reap profits from the coronavirus pandemic in 2021. However, some payers—namely, those in the Affordable Care Act fully-insured commercial market—are legally bound to give rebates to enrollees based on their profits.

The researchers were uncertain how the Delta variant would influence the future of hospital utilization and spending in 2021. Other factors—such as the Food and Drug Administration (FDA) recommending vaccine booster shots, not only for the immunocompromised but also for the rest of the vaccinated community—could also have an impact.

Marketplace rate filings revealed that many payers did not anticipate that the coronavirus pandemic would significantly impact 2022 healthcare spending but rather that the trajectory would return to pre-pandemic levels next year.

Slightly more than one in four payers stated that the coronavirus pandemic would increase costs in 2022, but payers predicted that these increases would be nominal—less than one percent.

As payers plan for 2022, these lower healthcare spending trajectories could mean higher profits for payers at the end of 2021 along with higher rebates for commercial payers on the Affordable Care Act marketplace. Tracking these trends will continue to be crucial, due to the unknown influence of coronavirus-related factors.