COVID-19 vaccine saved $1.2T in healthcare costs: study

The COVID-19 vaccine saved the healthcare system almost $1.2 trillion over the past two years by preventing millions of hospitalizations and deaths, new research shows.

Vaccination prevented more than 18.5 million hospitalizations and 3.2 million deaths, which would have cost the nation’s healthcare system about $1.15 trillion, according to an analysis by the Commonwealth Fund, a nonprofit research foundation.

Researchers calculated age- and comorbidity-specific risks of severe health outcomes because of COVID-19. The results of the research, which also considered immunity levels, variants and pandemic-related restrictions, are considered conservative because they don’t factor in the effects of long COVID, which often requires additional medical care and reduces productivity.

Without the vaccine, the U.S. would have experienced 1.5 times more infections, 3.8 times more hospitalizations and 4.1 times more deaths from December 2020 through November 2022, researchers said.

“This extraordinary achievement was made possible through sustained funding and policymaking that made vaccines available to all Americans,” said Dr. Alison Galvani, the founding director of the Yale Center for Infectious Disease Modeling and Analysis and a co-author of the study. “Moving forward, we need to (be) accelerating the uptake of the new booster, which is fundamental to averting additional hospitalizations, deaths and school absenteeism.” 

Many hospitals are at full capacity as they struggle to treat a rising number of influenza and COVID-19 cases amid an acute labor shortage. Pediatric hospitals are still managing a surge in respiratory syncytial virus patients, although infection rates have dropped over the past several weeks. Providers would be worse off if the COVID-19 vaccine wasn’t developed as quickly as it was, Galvani said.

Looming financing and production changes involving the COVID-19 vaccine and Medicaid disenrollment threaten to further destabilize the healthcare system.

Vaccine and drug procurement and distribution will shift to the private sector as soon as January, when the federal supply of vaccines and treatments may run out. As government initiatives wane, the healthcare industry and patients will likely have to bear more of the cost of COVID-19 vaccination and treatment.

Insurers will still need to pay for COVID-19 vaccines without charging patients copays or out-of-pocket costs, but they will likely pass on the additional costs through higher premiums. Insurers are not required to cover COVID-19 treatments, and it remains uncertain what they will cover and how much patients will have to contribute.

Meanwhile, 18 million people will lose Medicaid coverage once the public health emergency ends, tentatively in April, according to estimates from Robert Wood Johnson Foundation, a nonprofit research organization. Roughly 4 million people will become uninsured, according to the foundation. 

The federal government has stopped reimbursing providers for providing COVID-19 vaccines, tests and treatments for the uninsured and is unlikely to resume those programs. It will be up to the states to write legislation to continue funding.

As insurance companies’ expenses to administer vaccines increase and more Americans lose healthcare coverage, insurers and hospitals may shift those costs onto patients, Galvani said. That would slow the already lagging administration rates of the updated COVID-19 booster. As of Dec. 8, only 15.5% of adults have received the updated COVID-19 booster, according to the Centers for Disease Control and Prevention.

“Curbing hospitalization rates is particularly important amidst the strain on the healthcare system caused by the flu and RSV, and COVID vaccination helps preserve hospital resources,” Galvani said. “But I am worried that if people have to pay more out of pocket because they are uninsured or have high deductibles and copays, that is not going to help with the rate of uptake of the new booster.”

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