Out-of-Pocket Spending for Health Care After COVID-19 Hospitalization

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For most patients who survive COVID-19 hospitalization, out-of-pocket spending within 180 days of discharge is modest. However, 1 in 10 have out-of-pocket spending exceeding $2000.

ABSTRACT

Objectives: Many patients report financial stress following hospitalization for COVID-19. Although many COVID-19 survivors require extensive care after discharge, the degree to which this care contributes to financial stress is unclear. Using national data, we assessed out-of-pocket spending during the 180 days after discharge among patients hospitalized for COVID-19.

Study Design: Retrospective cohort analysis of Optum’s deidentified Clinformatics Data Mart, a national database of medical and pharmacy claims.

Methods: Among privately insured and Medicare Advantage patients hospitalized for COVID-19 between March and June 2020, we calculated median out-of-pocket spending during the 180 days after discharge. For comparison, we repeated this calculation among patients hospitalized for pneumonia.

Results: Of 7932 patients with COVID-19 included in analyses, 2061 (26.0%) had private insurance. Among privately insured and Medicare Advantage patients, median (25th-75th percentile) out-of-pocket spending after discharge was $287 ($59-$842) and $271 ($63-$783), respectively. Out-of-pocket spending exceeded $2000 for 10.9% and 9.3% of these patients, respectively. Among privately insured and Medicare Advantage patients hospitalized for pneumonia, median (25th-75th percentile) out-of-pocket spending after discharge was $276 ($62-$836) and $570 ($181-$1466). Out-of-pocket spending exceeded $2000 for 12.1% and 17.2% of these patients, respectively.

Conclusions: For most patients hospitalized for COVID-19, postdischarge care may not be a major source of financial stress. Although this is reassuring, our findings also suggest that a sizable minority of COVID-19 survivors have substantial out-of-pocket spending after discharge. These survivors could be particularly vulnerable to financial toxicity if they also receive bills for the hospitalization owing to the expiration of insurer cost-sharing waivers. Insurers should consider this possibility when deciding whether to reinstate cost-sharing waivers for COVID-19 hospitalizations.

Am J Manag Care. 2022;28(8):In Press

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Takeaway Points

  • Using national data, we estimated out-of-pocket spending during the 180 days after discharge among patients hospitalized for COVID-19 between March and June 2020.
  • Median out-of-pocket spending for privately insured and Medicare Advantage patients was $287 and $271, respectively. This spending exceeded $2000 for approximately 1 in 10 patients.
  • Although postdischarge care is likely not a major source of financial stress for most COVID-19 survivors, the costs of this care can sometimes be substantial.
  • As most insurers have stopped waiving cost sharing for COVID-19 hospitalizations, survivors could increasingly receive sizable bills both for the hospitalization and for postdischarge care, potentially resulting in financial toxicity.

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In a survey of US patients who survived after COVID-19 hospitalization, one-fourth of respondents reported moderate financial stress or greater, and one-tenth reported using most or all of their savings.1 During the winter of 2021, US COVID-19 hospitalizations surged, owing to the Omicron variant.2 Given the potential for future hospitalization surges, protecting the financial health of COVID-19 survivors remains a key policy goal.

To achieve this goal, an important first step is to identify the drivers of financial stress among COVID-19 survivors. Findings of prior studies suggest that many patients require extensive care after discharge from COVID-19 hospitalization, including nursing facility care, readmissions, and care for new comorbidities.3,4 However, the degree to which postdischarge care contributes to financial stress among COVID-19 survivors is unclear. To address this gap, we used national data to assess out-of-pocket spending during the 180 days after discharge among privately insured and Medicare Advantage patients hospitalized for COVID-19 between March and June 2020.

METHODS

Data Source

In July 2021, we conducted a retrospective cohort analysis of 2020 data from Optum’s deidentified Clinformatics Data Mart. This database contains medical and pharmacy claims from 17 million patients with private insurance and Medicare Advantage in all US states. Claims through December 31, 2020, were available at the time of analysis. Because data were deidentified, the institutional review board of the University of Michigan Medical School exempted analyses from human subjects review; informed consent was not required.

Sample

To identify the study cohort, we first identified hospitalizations (1) for privately insured and Medicare Advantage patients who had a primary diagnosis of COVID-19 (International Classification of Diseases, Tenth Revision, Clinical Modification [ICD-10-CM] diagnosis code U071) and (2) that began and ended between March 1 and June 30, 2020. We limited analyses to each patient’s first hospitalization during this period. We excluded patients without continuous enrollment during the 180 days after discharge, patients whose insurer was not primary, and patients with postdischarge out-of-pocket spending exceeding $16,300, which was the maximum allowed for family plans under the Affordable Care Act in 2020 (to account for possible data entry error).5

Study Outcomes

We calculated mean and median out-of-pocket spending (sum of deductibles, coinsurance, and co-payments) across all medical and pharmacy claims during the 180 days after discharge. To assess the distribution of out-of-pocket spending, we calculated the proportion of patients in each payer population with out-of-pocket spending exceeding $2000, which is an amount equal to approximately 1 SD above the mean. To identify the major sources of postdischarge out-of-pocket spending, we calculated out-of-pocket spending in 14 service categories: additional hospitalizations (whether related to COVID-19 or not), nursing facility admissions, outpatient care (eg, office visits), emergency department visits, radiology, laboratory, diagnostic and therapeutic procedures (eg, colonoscopy or surgery), physical/occupational/speech/respiratory therapy, home health and hospice care, transportation, clinician-administered medications (eg, infusions), durable medical equipment and supplies, pharmacy-dispensed prescriptions, and miscellaneous. These categories were based on the Agency for Healthcare Research and Quality’s Clinical Classification Software for Services and Procedures algorithm (see eAppendix [available at ajmc.com] for details).6

For comparison, we repeated analyses among patients hospitalized for bacterial pneumonia. These patients had a hospitalization that had a primary diagnosis of bacterial pneumonia (ICD-10-CM diagnosis code J13-J18) and began and ended between March 1 and June 30, 2020. We limited analyses to each patient’s first hospitalization during this period and applied the same exclusion criteria as above. To avoid overlap, we excluded patients with pneumonia who were also in the main sample of patients with COVID-19.

Statistical Analyses

Within payer types, we compared mean postdischarge out-of-pocket spending between patients with COVID-19 and patients with pneumonia using a 1-part generalized linear model with a log link and Poisson variance function, the latter of which was chosen based on the modified Park test.7 Models adjusted for age group, sex, Census region of residence, and month of admission. The analyses used SAS version 9.4 (SAS Institute), Stata version 15.1 MP (StataCorp), and 2-sided hypothesis tests with α = 0.05.

RESULTS

Sample

We identified 12,365 patients who had an initial hospitalization with a primary diagnosis code for COVID-19 between March 1 and June 30, 2020. We excluded 4400 patients without continuous enrollment during the 180 days after discharge, 31 patients whose insurer was not primary, and 2 patients with postdischarge out-of-pocket spending exceeding $16,300. In total, we excluded 4433 (35.9%) patients, leaving 7932 patients. Table 1 shows sample characteristics. Of the 7932 patients, 2061 (26.0%) had private insurance.

For the comparison group, we identified 10,475 patients who had an initial hospitalization with a primary diagnosis code for bacterial pneumonia between March 1 and June 30, 2020. We excluded 2780 patients without continuous enrollment during the 180 days after discharge, 12 patients whose insurer was not primary, 7 patients with postdischarge out-of-pocket spending exceeding $16,300, and 50 patients who overlapped with the main sample of patients with COVID-19. In total, we excluded 2849 (27.2%) patients, leaving 7626 patients. Of these patients, 865 (11.3%) had private insurance (see Table 1 for characteristics of patients with pneumonia).

Out-of-Pocket Spending for Postdischarge Care

Among privately insured and Medicare Advantage patients hospitalized for COVID-19, mean (SD) out-of-pocket spending across all medical and pharmacy claims during the 180 days after discharge was $746 ($1210) and $724 ($1292), respectively. Median (25th-75th percentile) out-of-pocket spending was $287 ($59-$842) and $271 ($63-$783). Out-of-pocket spending exceeded $2000 for 225 (10.9%) privately insured and 544 (9.3%) Medicare Advantage patients. For both payer populations, additional hospitalizations, procedures, and pharmacy-dispensed drugs accounted for the 3 highest shares of out-of-pocket spending (Table 2).

Among privately insured and Medicare Advantage patients with pneumonia, mean (SD) out-of-pocket spending after discharge was $822 ($1490) and $1114 ($1534). Median (25th-75th percentile) out-of-pocket spending was $276 ($62-$836) and $570 ($181-$1466).

Out-of-pocket spending exceeded $2000 for 105 (12.1%) privately insured and 1116 (17.2%) Medicare Advantage patients with pneumonia. Compared with privately insured patients with COVID-19, privately insured patients with pneumonia had higher mean out-of-pocket spending after discharge (adjusted difference, pneumonia minus COVID-19: $66; 95% CI, $63-$68). The same was true for Medicare Advantage patients (adjusted difference, pneumonia minus COVID-19: $481; 95% CI, $460-$462).

DISCUSSION

In this national study of 7932 privately insured and Medicare Advantage patients hospitalized for COVID-19 between March and June 2020, median out-of-pocket spending during the 180 days after discharge was $287 and $271, respectively. Although most patients with COVID-19 had modest out-of-pocket spending after discharge, this spending was right-skewed. For 10.9% of privately insured and 9.3% of Medicare Advantage patients with COVID-19, postdischarge out-of-pocket spending exceeded $2000.

Our findings suggest that postdischarge care may not be a major source of financial stress for most COVID-19 survivors. Consequently, policy efforts to protect the financial health of survivors may be more impactful if they focus on other potential stressors, including job loss.1 An important caveat, however, is that a sizable minority of survivors in our study had substantial out-of-pocket spending after discharge. These survivors might be particularly vulnerable to financial toxicity if they also receive bills for the hospitalization—bills that are becoming increasingly common because most insurers allowed their cost-sharing waivers for COVID-19 hospitalization to expire by August 2021.8,9 Insurers may wish to consider the possibility of financial toxicity when deciding whether to reinstate cost-sharing waivers for COVID-19 hospitalization.

For both privately insured and Medicare Advantage patients, mean out-of-pocket spending after discharge was higher among patients hospitalized for pneumonia compared with COVID-19. A potential explanation is that some postdischarge care for patients with COVID-19, including readmissions for COVID-19, was covered by insurer cost-sharing waivers for COVID-19 hospitalization.8,10 Given the increasing expiration of these waivers, the gap in out-of-pocket spending between patients hospitalized for COVID-19 and those hospitalized with pneumonia may now be narrower than in this study.

Strengths and Limitations

This study’s primary strength is its use of a national claims database that includes both privately insured and Medicare Advantage patients. However, the study also has limitations. First, analyses required hospital discharge by June 30, 2020, because a 180-day postdischarge period was needed and because claims were complete only through December 31, 2020, at the time of analysis. Although necessary, this decision excluded patients with prolonged hospitalizations who may require more intensive postdischarge care than patients in the study. Consequently, analyses likely underestimate out-of-pocket burden among all patients hospitalized for COVID-19. Second, by requiring at least 180 days of continuous enrollment following discharge, analyses excluded patients who disenrolled from insurance. Generalizability of results to these patients is unclear. Third, results may also not generalize to all privately insured and Medicare Advantage patients. Fourth, the database does not include the uninsured, who may have particularly high levels of out-of-pocket spending for postdischarge care.

CONCLUSIONS

Although out-of-pocket spending after discharge from COVID-19 hospitalization is modest for most patients, this spending is substantial for a sizable minority of survivors. For these survivors, financial burden could be further increased if they also receive bills for the hospitalization. To prevent financial toxicity, insurers may wish to consider reinstating cost-sharing waivers for COVID-19 hospitalizations.

Author Affiliations: Department of Pediatrics, Susan B. Meister Child Health Evaluation and Research Center, University of Michigan Medical School (KPC), Ann Arbor, MI; Department of Health Management and Policy, University of Michigan School of Public Health (KPC), Ann Arbor, MI; Department of Markets, Public Policy, and Law, Institute for Health System Innovation and Policy, Questrom School of Business, Boston University (RMC), Boston, MA; Department of Internal Medicine, Division of General Medicine, University of Michigan Medical School (NVB), Ann Arbor, MI.

Source of Funding: Dr Chua’s effort is supported by a career development award from the National Institute on Drug Abuse (grant number 1K08DA048110-01). The funder played no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; or decision to submit the manuscript for publication.

Prior Publication: The authors previously submitted a preprint examining out-of-pocket spending within 90 days of discharge from COVID-19 hospitalization using a different database (IQVIA PharMetrics Plus for Academics). This preprint is available online at doi:10.1101/2021.06.11.21258766.

Author Disclosures: Dr Conti is an associate editor of The American Journal of Managed Care®. The authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design (KPC, RMC); acquisition of data (KPC); analysis and interpretation of data (KPC, RMC, NVB); drafting of the manuscript (KPC, RMC, NVB); critical revision of the manuscript for important intellectual content (KPC, RMC, NVB); statistical analysis (KPC); and obtaining funding (KPC).

Address Correspondence to: Kao-Ping Chua, MD, PhD, University of Michigan Medical School, 300 N Ingalls St, Room 6E18, Ann Arbor, MI 48109-5456. Email: chuak@med.umich.edu.

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