Nursing facilities and continuing care retirement communities accounted for $196.8 billion in spending in 2020, driven by COVID-19, according to an Office of the Actuary at the Centers for Medicare & and Medicaid Services report published by the journal Health Affairs. The amount is $22.6 billion more than in 2019.
Overall, national healthcare spending changed dramatically in 2020, driven by funding associated with the pandemic, according to the report authors. Overall healthcare spending increased 9.7% to reach $4.1 trillion, which was a much faster rate than the 4.3% increase seen in 2019.
“Federal spending increased rapidly in 2020 as the government increased public health spending to combat the pandemic and provided significant assistance to healthcare providers,” Micah Hartman, a statistician in the CMS Office of the Actuary, told reporters at a press conference Wednesday.
“To give a sense of the magnitude of this funding, if we exclude spending for other federal programs and federal public health expenditures, the increase in total national healthcare spending would be just 1.9% in 2020, as compared to the 9.7% when it is included,” he added.
Medicare spending slowed year over year, with the exception of nursing home care.
“This was driven by increased utilization and spending resulting primarily from a waiver that allowed coverage for skilled nursing services without a prior in-patient hospital stay,” said Anne B. Martin, an economist in the National Health Statistics Group with the Office of the Actuary at the CMS.
Major payers’ spending in 2020 grew between Medicaid and Medicare, by 3.5% and 9.2% respectively, whereas private pay and out-of-pocket spending declined by 1.2% and 3.7%, respectively according to the report.