Inpatient costs of treating COVID-19 in the U.S.

By Dr. Priyom Bose, Ph.D.Jan 7 2024Reviewed by Benedette Cuffari, M.Sc.

A recent JAMA Network Open study discusses the average cost of provision of inpatient care to treat coronavirus disease-2019 (COVID-19) patients. The extent to which these costs varied throughout the various pandemic waves and by certain sociodemographic characteristics of patients was also determined.

Study: Inpatient Costs of Treating Patients With COVID-19. Image Credit: 9dream studio / Shutterstock.com

Background

The COVID-19 pandemic stressed global medical services in an unprecedented manner. By the end of 2022, COVID-19 was responsible for nearly 6.7 million deaths, with the number of cases exceeding 660 million.

In the United States, the demand for hospital services peaked during the Omicron variant surge between November 2021 and February 2022. However, this demand was not met due to personnel, medication, and equipment shortages, which caused the cancellation of surgeries. To date, the costs borne by U.S. hospitals to provide inpatient treatment to an unprecedented number of patients remain unknown.

Previous studies have used payment rates as a proxy for costs or relied on statistics obtained during the early stages of the pandemic. Studies that considered Medicare underestimated the financial burden patients bear due to out-of-pocket expenses, in addition to not considering hospital and health professional costs incurred to provide necessary care.

The role of risk factors like diabetes and obesity in increasing the risk of severe COVID-19 is well documented. However, the extent to which these comorbidities translated to increased healthcare treatment costs remains unclear.

About the study

The present study documents evidence of the average costs borne by hospitals to provide inpatient care to COVID-19 patients. Moreover, the researchers investigated the heterogeneity of the expenses across pandemic waves and patients' sociodemographic characteristics.

De-identified inpatient-level data were analyzed between March 1, 2020, and March 31, 2022. The data covered over 800 hospitals, accounting for 97% of academic medical centers throughout the U.S.

The direct hospital costs to provide care were used to gauge healthcare costs and adjusted for different geographical areas with varying wage and labor cost indices. Costs were calculated by Vizient, which classified individual amounts billed as directly proportional to providing patient care, such as equipment and staffing.

The costs were then adjusted using the hospital-specific cost-to-charge ratio, calculated using the data obtained from the Centers for Medicare & Medicaid Services. All costs were in constant January 2022 U.S. dollars (USD).

Key findings

Across 1.3 million hospital stays, the average inpatient cost to provide care was $11,275 USD, thus implying that the direct cost to hospitals or the medical resource use was about USD 15 billion. Between August 2020 and July 15, 2023, the U.S. Centers for Disease Control (CDC) reported 6.2 million hospital admissions.

Extrapolating this figure would indicate an aggregate healthcare cost of USD 70 billion, excluding immunizations, testing, outpatient care, or visits to the emergency department that did not progress to hospitalization. Importantly, this is a pure monetary cost that excludes other costs, such as lost years of productive life, lost days of work, and higher financial distress for families. 

Certain chronic conditions were associated with much higher hospital costs. This could be attributed to severe diseases; however, these conditions are not necessarily associated with more extended hospital stays or intensive care unit (ICU) usage.

During the sample period, the costs of inpatient treatment increased by 26% compared to an average of 2-5% inflation in annual medical costs. For patients treated with extracorporeal membrane oxygenation (ECMO) or mechanical ventilation, costs rose by around 35%.

Conclusions

Inflation in medical costs increased during the COVID-19, which was largely attributed to the increased use of ECMO. The associated expenses also increased as viral variants of concern evolved, and care practices changed.

The main strengths of the current study are the large sample size and a representative national sample with heterogeneity in hospital size. The study's main limitation includes measurement error due to the use of administrative data, which could lead to a downward bias in results due to omitted deaths or comorbidities that could have occurred following discharge.

Although the costs were derived from hospital charges, measurement errors could arise from reflected patient or payer costs. One could also argue that the hospitals included here were represented by academic medical centers but not all hospitals and thereby failed to represent the true inpatient burden on the healthcare system.

Some patients could have also been admitted multiple times; therefore, the estimated per-patient costs could be an underestimation.