The Impact the Unvaccinated Are Having on Healthcare Spending

September 15, 2021 - The impact the unvaccinated population is having on healthcare spending is significant, according to a new analysis from Kaiser Family Foundation (KFF).

There were approximately 287,000 preventable COVID-19 hospitalizations this summer (June, July, and August) among unvaccinated adults, the analysis found using data from HHS and CDC. With the average cost of a preventable hospitalization at about $20,000, the preventable COVID-19 hospitalizations cost the healthcare system almost $6 billion in just three months alone, researchers reported.

Those hospitalizations could have been prevented if the adults had gotten vaccinated, the analysis indicated. Of the total COVID-19 hospitalizations between June and August 2021, nearly 99 percent were among unvaccinated people, the analysis shows.

Researchers noted that they did adjust for the fact that COVID-19 vaccines do not prevent all hospitalizations among people diagnosed with COVID-19. The numbers in the analysis are also estimates and do not account for hospital prices, which vary widely. But they do point to a significant impact the unwillingness to get vaccinated is having on healthcare spending in the US.

“Still, this ballpark figure is likely an understatement of the cost burden from preventable treatment of COVID-19 among unvaccinated adults,” they wrote in the analysis.

Other costs may include spending on outpatient treatment for COVID-19, which studies have shown can cost upwards of $100 per visit. Patients with a coronavirus-related hospital admission averaged 3.2 outpatient visits, one Medicare study found.

High healthcare spending on preventable COVID-19 hospitalizations has significant implications for the industry at large.

“The monetary cost of treating unvaccinated people for COVID-19 is borne not only by patients but also by society more broadly, including taxpayer-funded public programs and private insurance premiums paid by workers, businesses, and individual purchasers,” KFF researchers stated.

They pointed out that “[o]nly a small shared of the cost of a COVID-19 hospitalization is paid directly by patient themselves.” The bulk of a hospitalization’s costs is paid by insurers, including publicly funded Medicaid and Medicare.

Getting people vaccinated is cheaper than a COVID-19 hospitalization, analysts at CNN recently emphasized in a recent analysis. They found that a Medicare beneficiary hospitalized for COVID-19 cost the program approximately 150 times more compared to fully vaccinated beneficiaries. The analysis considered the fact that Medicare reimburses providers up to $150 to fully vaccinate Medicare beneficiaries with a two-dose COVID-19 vaccine, while the average cost to hospitalize a Medicare beneficiary was about $20,000—the same estimate researchers used in the KFF analysis.

“Though there was of course a societal cost to develop and distribute vaccinations, the vaccines save the [US] health system money in the longer run by preventing costly hospitalizations,” KFF researchers stated.

So far, research has demonstrated that the initial surge of COVID-19 last year did not increase overall healthcare spending in the US even though spending rates remained high. The slight decline in spending stemmed from a substantial decrease in utilization, especially among elective procedures.

Healthcare utilization remains low compared to pre-pandemic levels, according to an August report. Furthermore, many hospitals and health systems are once again reaching capacity due to the Delta variant.

At the start of the COVID-19 pandemic hospitals and other stakeholders were worried about how the virus would impact already high healthcare spending. Now, almost two years later, they are concerned about the toll the unvaccinated population will have on the industry hit hard by both clinical and financial hardships.