Connecticut saw a massive reduction in healthcare costs in 2020 as the COVID-19 pandemic kept many people from going to the hospital or regular doctor visits during lockdown.
According to a June 2021 presentation by the Health Care Cost Containment Committee (HCCCC), Connecticut’s healthcare plan paid out $693.8 million less in claims during 2020 than it had in 2019, a 22 percent reduction.
Those figures include active and retired state employees and municipal employees covered under the Connecticut Partnership Plan 2.0 and their dependents, totaling 201,488 plan members, as of June 2020.
Facility, pharmacy and professional service payments all decreased by roughly $200 million during the year, marked by a steep drop in the number of emergency room visits by plan participants in April of 2020 when Connecticut began its pandemic lockdown.
Visits to the emergency room dropped from 67,700 in 2019 to 51,589 for 2020.
The steep drop-off in healthcare payments by the state mirrored a broader effect on national healthcare system during the COVID-19 pandemic.
People were discouraged from making unnecessary visits to healthcare facilities during the early days of the pandemic and elective surgeries dropped dramatically across the state as hospital facilities emptied floors preparing for an onslaught of COVID patients and tried to reduce transmission as much as possible.
The COVID fallout, however, also left hospitals facing revenue shortages with the sharp decrease in elective surgeries.
In its annual report, the Connecticut Office of Health Strategy found that “the statewide total gain from patient care and related sources” decreased 93 percent from the previous year. Net patient revenue decreased by 3 percent, amounting to $475 million, and operating expenses increased significantly by $1.1 billion.”
The John Dempsey Hospital saw one of the largest decreases in profit margin, dropping 25 percent, according to the report.
In total, Connecticut hospitals were projected to lose upwards of $1.5 billion due to the pandemic, but received $1.1 billion in federal COVID relief funds, including a $40 million allocation from the state, according to CT Mirror.
The state also incurred costs totaling $130 million for 2020 through 2022 for COVID testing, treatment and vaccine administration, but those costs were offset by $130 million in COVID relief funds, according a January 10, 2022 meeting of the HCCCC.
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This “reduction” tracks with other states across the country. Patients didn’t seek out services during COVID. Now, pent up demand for services, especially surgeries, is starting to catch up. The second order effects of this relate to what medical trend will look like NEXT year for employers sponsoring health plans. The other story is around the huge variation in cost and quality between and among Connecticut hospitals for the same procedures or services. The Rand Hospital Transparency Report documents this variation and opportunities for employers to contract high performing providers and health systems who furnish predictable costs and outcomes.