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One might think that health spending increased for all during COVID-19, but there are a lot of different factors that led to surprising results. In fact, in the spring of 2020, healthcare spending dropped drastically because of cancellations of elective treatments. The medical field changed a great deal during this time, with the rise of telemedicine. However, it didn’t make up for the drop in appointments at the office.

Drop in Spending for Non-COVID-19 care

The major drop in health spending was for non-COVID-19 care. Starting early in the pandemic, many people put off or canceled medical care that they would have had. The industry never made up for this drop off. In addition, claims for vaccines will increase the costs of claims in 2021.

2020 Health Revenues Fell by 1%

You can look at the Quarterly Services Survey to see the decline in spending. It includes all health services except prescription drugs. In general, health services were down -8.9% in the second quarter of 2020 when compared to the second quarter of 2019. That said, health spending was up in the third and fourth quarters.

On the year, health spending was down, but it mostly dropped in March and April of 2020 and then recovered.

Personal Consumption Spending

You can also look at personal consumption, which shows a much steeper drop. In fact, data shows that personal consumption spending was down -31.9% in April 2020. This was a sharp change, as these numbers have consistently increased since the 1960s. These numbers don’t include prescription spending, but they helped boost the numbers.

Physician Office Spending Was Down in 2020

When you look at the spending by category, you see that ambulatory care, including physician’s offices and outpatient care centers, saw drops in revenue. However, the revenue for labs and nursing homes increased. Dental providers saw some of the largest decreases in revenue. The lab spending was up the most, with an increase of 32.7% in the fourth quarter. Hospital revenue was down by more than 5% because so many elective procedures were canceled.