Data show dramatic drop in medical service use, lower out-of-pocket spending but rise in prescription drug spending

WASHINGTON, May 25, 2022 -- A new report from the Health Care Cost Institute (HCCI) shows how the onset of the COVID-19 pandemic drastically shifted the ways Americans interacted with the health care system. Even though hundreds of thousands of individuals were hospitalized with the deadly virus in 2020, utilization of medical services, including inpatient, outpatient and professional services, all decreased for the first time since HCCI has been reporting spending trends.

Data in HCCI's annual Health Care Cost and Utilization Report (HCCUR) demonstrate that, although use of health care services and the total amount spent on health care decreased in 2020, spending was still 9% higher in 2020 compared to 2016, with the largest growth in prescription drug spending.

"COVID-19 was a shock to the health care system in many ways, and it dramatically changed how people used health care services in the early months of the pandemic," said Katie Martin, president and CEO of HCCI. "After 12 consecutive years of increases in health care spending, HCCI data shows a spending decrease in 2020. The downturn spending was driven by people using fewer health care services."

Other key findings of the HCCUR include:

• Compared to 2019, spending decreased in all categories except prescription drugs, which increased nearly 6%.
• Use of telehealth increased more than 100-fold from 2016 to 2020 and spending on telehealth increased 250-fold.
• Average out-of-pocket spending decreased by more than 10% from 2019 to 2020 and was even 4% lower than 2016.

The HCCUR examines year-over-year and 5-year cumulative trends in health care spending for individuals with employer-sponsored insurance, segmented by health care service category. The findings in HCCUR are powered by HCCI data which holds claims data for around 55 million commercially insured individuals. All data was weighted to reflect the age, gender and geographic mix of the employer- sponsored insurance population. The full report can be accessed here.

About Health Care Cost Institute

The Health Care Cost Institute's mission is to get to the heart of the key issues impacting the U.S. health care system — by using the best data to get the best answers. HCCI stands for truth and consensus around the most important trends in health care, particularly those economic issues that are critical to a sustainable, high-performing health system.