Health spending drops for first time in 12 years: Report

Per-person spending dipped with many consumers using healthcare less in the early months of the pandemic. But health spending rose over a 5-year period.

Healthcare spending dropped due to the COVID-19 pandemic in 2020, marking the first decline in 12 years, according to a new study by the Health Care Cost Institute.

The report, which was released Wednesday, said the decrease is based on a simple reason. People, at least those who weren’t infected with COVID-19, were utilizing healthcare less regularly.

In 2020, per-person spending on healthcare in America fell to $5,607, down from $5,834 in 2019. The institute’s figure includes medical and pharmacy claims.

Katie Martin, president and CEO of the institute, said in a statement that the pandemic “dramatically changed how people used health care services in the early months of the pandemic.”

Even with the decline, per-person spending rose from $5,147 to $5,607 between 2016 and 2020, an increase of 9.3%. The report cited rising prices, which increased by 16% over that span.

Average out-of-pocket costs fell to $724 per person in 2020, down from $817 in 2019.

Many Americans continue to struggle to pay medical bills. Nearly half of all Americans said they had trouble paying their medical bills over the previous 12-months, according to a December survey by the Kaiser Family Foundation. Half of all Americans delayed or went without some kind of healthcare service because of the cost.

The institute’s report also examined spending trends for hospital inpatient services between 2016 and 2020, with the average price of an inpatient admission rising 25% over that span.

The average price of admissions for childbirth and pregnancy rose from $9,357 in 2016 to $11,277 in 2020, an increase of 21%, the report stated. Childbirth accounted for over 20% of inpatient admissions in 2020.

Transplant admissions saw the largest increase in costs, according to the report. The average price of a transplant rose from $89,415 in 2016 to $134,105 in 2020, an increase of 50%. Inpatient admissions in trauma cases rose from $82,844 in 2016 to $104,193 in 2020, an increase of 26%.

For prescription drugs, per-person spending rose from $1,054 in 2016 to $1,279 in 2020, a 21% increase.