The coronavirus (COVID-19) pandemic has inflicted losses on the nation’s hospitals in more ways than one, and a new report says the combined effect may be a reduction in services and higher costs for patients.
A study from QuoteWizard, an online insurance marketplace, shows that health care spending at hospitals fell by 43 percent in April and declined 37 percent at doctors’ offices.
While some hospitals were overwhelmed with COVID-19 patients, people with other medical issues -- some very serious -- stayed away. There was a nearly 78 percent decline in in-person medical visits from March to April when compared to the same period in 2019.
A lot of the financial losses occurred early in the pandemic when facilities treating COVID-19 patients were practically overrun, but other medical facilities specializing in other conditions furloughed doctors and nurses.
Multi-billion dollar losses
The study suggests that the financial blow to the system has been severe and may take some time to overcome. Health care system losses are expected to total $120.5 billion from July through December 2020. For 2020 as a whole, losses could exceed $323 billion.
For the year, primary care practices are expected to lose $67,774 per full-time-equivalent doctor. Nationally, that amounts to about $15.1 billion. The study authors conclude that the system can’t absorb these kinds of losses without it affecting patient services. One of the biggest concerns is the hospitals’ ability to keep operating in this environment.
The study shows that many hospitals with mounting debts are unable to continue operating and will likely be forced to close their doors. The authors note that hospital closures are already becoming more common, especially in rural areas where health care facilities are few and far between. Already in the first half of 2020, there have been 12 rural hospital closures.
Higher costs for consumers
The study also suggests that consumers will pay a higher cost for health care, both in out-of-pocket expenses and in insurance premiums. They’ll do this, the authors explain, because hospitals will increase the average expense they bill per patient visit.
An analysis of Kaiser Family Foundation data from 2009 to 2017 found that the expense per hospital visit increased 36 percent over that period -- and that was at a time of relative stability within the health care system.
“Given the record debts set to accumulate for hospitals in 2020, the rate of health care expenses is likely to soar past the 36 percent rate over the last decade,” the authors conclude.
Consumers will likely feel that in the form of higher health insurance premiums as these higher costs get passed on to benefit providers, who will in turn charge more to policyholders.