Health spending now exceeds prepandemic levels as utilization of care remains uneven

Both health care spending and utilization have changed significantly since before the pandemic, the new Peterson-KFF Health System Tracker found.

“As of the first quarter of 2024, most spending on health services exceeds pre-pandemic levels, and health costs are growing at a faster rate than in recent years,” it said. “However, utilization of care has been uneven by setting and market. Some measures of hospital utilization remain lower than pre-pandemic levels, which could reflect a continuing transition of care to outpatient centers.”

Several key findings about cost and utilization emerged from the report.

Annual growth in health services spending now higher than before the pandemic. Since early 2022, year-over-year growth in health services spending rebounded as the system recovered from the initial waves of the COVID-19 pandemic. Some of this growth in spending reflects rising prices, as inflation and workforce shortages have put upward pressure on hospital costs.

Spending on hospitals is now growing faster than before the pandemic. After some volatility from 2020 through 2022, growth in hospital services spending has been consistently high, with double-digit growth since early 2023.

Hospital discharges have remained below pre-pandemic levels. By the first quarter of 2024, the number of hospital discharges had rebounded to 9.3 million, but that was still about 0.5 million short of the typical number of discharges in 2018 and 2019.

On a per capita basis, inpatient admissions had been trending downward over time, even before the pandemic. There has been a move from inpatient settings to outpatient care centers for some types of care, such as imaging and diagnostic services, and less-complex surgical procedures.

The percentage of adults with a visit to an emergency department has rebounded to pre-pandemic levels. The share of adults reporting an emergency department visit in the previous 12 months dropped to 17% in the fourth quarter of 2020. However, this number has rebounded in the past year, with 20.7% of adults reporting a visit in the first quarter of 2024.

Hospital outpatient visits generally are trending upward. From 2019 to 2020, there was a nearly 10% decrease as care was delayed, foregone or cancelled because of COVID-19. The rate of outpatient visits since has recovered and in 2022 was marginally above pre-pandemic levels.

The share of adults with a doctor visit in the past year is similar to pre-pandemic levels. From 2000 to 2022, there was a 30% increase in the rate of outpatient visits.

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The share of adults with a doctor visit in the past year is similar to pre-pandemic levels. The percentage of adults with a doctor visit in the last year has recovered since 2020 and is similar to pre-pandemic levels.

Ambulatory encounters are increasing in the fully insured group and Medicare Advantage markets. The average number of ambulatory encounters per enrollee in Medicare Advantage has grown in recent years, while the number of ambulatory care encounters per Medicaid enrollee has fallen since pre-pandemic.