Covid 19

Spillover effects of COVID-19 portend growing challenge for hospitals

November 24, 2020 11:59 pm

Far more attention has been paid to the direct effects of COVID-19 on the healthcare system, including on hospitals, than to its indirect effects, which include the impact on care other than COVID-19-related care

This greater focus is hardly surprising, given that the direct effects have been so substantial (see the sidebar below). In my column earlier this year, I discussed the impact COVID-19 was having on hospital revenue as a result of the deferral of all elective surgeries last spring aimed at ensuring care resources and space would be available for COVID-19 patients.a

What we will not know or feel until some future time is the full impact of deferred or canceled care, including not only treatments and procedures but also normally scheduled vaccination rates. That impact includes not only deteriorating patient health from the lack of needed services but also the financial impact of caring for a sicker population as a result of the delayed services.

A recent article by McKinsey & Company noted that deferred care could increase annual healthcare costs in the U.S. by between $30 billion and $65 billion.b McKinsey reported on results of a survey in which 40% of individuals said they canceled scheduled appointments after the pandemic started. Although some of these appointments may have been for routine checkups where the postponement likely produced only minimal consequences, there are clear consequences associated with some cancellations or postponements of chronic care. An additional 12% reported they had needed care but neither received nor scheduled it. McKinsey estimated that deferring care for chronic obstructive pulmonary disease, for example, could make the condition 9% costlier to treat.

Impact on patients with cancer

Another area of concern is the consequences of postponed care for people who have or are at risk for cancer. The volume of preventive cancer screenings dropped sharply last spring, and although screenings have increased since then, they remain below pre-pandemic levels.c Oncologists have reported being asked to revise chemotherapy protocols to reduce the frequency of chemotherapy visits and the amount of immunosuppression that occurs with cancer patients. Whether these modifications will affect long-term outcomes is not clear. It is possible that providing systemic therapy before rather than after surgery, as occurred for some cancer surgeries, may produce similar long-term outcomes. Further analyses of the consequences of such changes is required to understand these longer-term effects.

Impact on behavioral health

Concern also is being raised about the future costs of behavioral health stemming from the extended lockdown and resulting economic downturn. These effects include anxiety and depression as well as higher rates of binge drinking and insomnia. One pharmacy benefit manager reported a 21% increase in prescriptions for depression-related medications and insomnia.d Because the average healthcare spending for people with behavioral health issues is about four times that for those without such issues, the consequences could be serious.

McKinsey, using estimates based on major past disasters, such as Hurricane Katrina or the recession of 2008-10, has indicated 35 million people or more could develop new behavioral health issues. If these numbers are extrapolated based on the known cost impact of mental health or substance use disorders, the results suggest a potential increase of 50% in the prevalence of behavioral health need, which could result in $100 billion to $140 billion of additional spending in the first 12 months following the start of the COVID-19 crisis.

These numbers are a sobering glimpse into the sheer magnitude of the potential impact of postponed care due to COVID-19.

Impact on vaccination rates

Yet another major concern is the reported impact that COVID-19 is having on vaccination rates. People of various ages still need to get vaccinations appropriate for their age and likelihood of illness. Current estimates are routine vaccination rates have declined across all populations — in some cases by 95%.e

Role of telemedicine

While in-person visits decreased during the pandemic, telemedicine visits increased sharply during the early weeks. Although this trend suggests a mitigating effect on the decline in in-person care, the effects of telehealth are limited in this regard. Vaccinations cannot be accomplished through telemedicine, for example. An analysis by Epic Health Research Network found the increase in telemedicine was not enough to offset the steep drops in in-person visits.f

That said, the increased use of telemedicine during the pandemic may end up profoundly affecting how healthcare is delivered in the U.S. over the long term and, by extension, the institutions that provide the care. Payers have been very supportive of telemedicine and its payment in fee-for-service medicine in the short run, but they will need to develop rules for the acceptable frequency of telemedicine encounters and the appropriate payment levels for the long run.

Nonetheless, healthcare organizations will still be challenged to address healthcare needs of a growing surge of patients who have become sicker as a result of having postponed essential care. Perhaps telehealth can provide part of the solution, by helping to connect with those patients early and encourage them to make the in-person visits that are so important to managing their illnesses or conditions.


Wilensky, G., “COVID-19 continues to play havoc with hospital financials,” hfm, Summer 2020.
b McKinsey & Company, “Understanding the hidden costs of COVID-19’s potential on U.S. healthcare,” Sept. 4, 2020.
Chen, J., and McGeorge, R., “Spillover effects of the COVID-19 pandemic could drive long-term health consequences for non-COVID-19 patients,” Health Affairs Blog, Oct. 23, 2020; Rosenbaum, L., “The untold toll — The pandemic’s effects on patients without COVID-19,” The New England Journal of Medicine, June 11, 2020.
d Express Scripts, America’s state of mind report, April 16, 2020.
e National Foundation for Infectious Diseases, “Issue brief: The impact of COVID-19 on U.S. vaccination rates,” Page accessed Nov. 4, 2020.
Fox, B., and Sizemore, J.O., “Telehealth: Fad or future,” Epic Health Research Network, Aug. 18, 2020.

Surveying the direct impact of COVID-19

As of Nov. 5, according to the CDC, the U.S. had seen 9.36 million cases of COVID-19 and 231,988 deaths. The largest numbers of cases have been reported in Texas, California, Florida, New York and Illinois. The largest number of deaths, by far, were in the state of New York — about double the number in Texas, California and Florida. The death rate in New York was undoubtedly exacerbated by the unfortunate decision to order nursing homes to readmit their residents upon discharge from the hospital after a COVID-19 diagnosis, even though many of the homes were unprepared to receive individuals who might still be able to pass the infection to others.

Whether the nursing homes should have had better infection control practices in place continues to be debated. But it is important to remember how little was known about appropriate treatment of COVID-19 patients after hospital discharge this past spring.

As of Oct. 15, 2020, the U.S. recorded about 299,000 excess deaths (i.e., observed deaths in the time period above the expected number of deaths), of which about 216,00 were attributed to COVID-19.a McKinsey & Co estimates the U.S. health system spends about $5.3 billion in direct costs.b


a Rossen, L.M., et al., “Excess deaths associated with COVID-19, by age and race and ethnicity — United States, January 26–October 3, 2020,” CDC, Oct. 23, 2020.
b McKinsey & Company, “Understanding the hidden costs of COVID-19’s potential on U.S. healthcare,” Sept. 4, 2020.



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