Medicare Service Utilization Plummeted from March to May 2020, Report Shows

Deferment of elective care and uncertainty over safety procedures were among drivers of decreased utilization, analyst says.

A recent Avalere Health report shows decreased Medicare utilization in the early phase of the coronavirus pandemic.

The early phase of the pandemic had a negative impact on healthcare utilization and healthcare provider finances. For example, a poll conducted in March 2020 found that only 33% of clinicians had confidence that their practices had enough cash on hand to function for four weeks.

The Avalere Health report, which is based on Medicare fee-for-service claims data from a random sample of 20% of Medicare FFS beneficiaries, compares claims volume during the first six months of 2020 and the first six months of 2019. The report features several key data points.

Compared to 2019, Medicare FFS claims dropped in March, April, and May 2020:

• March 2020: Inpatient claims increased 4%, professional claims decreased 13%, outpatient claims decreased 18%, and overall claims decreased 14%
   
• April 2020: Inpatient claims decreased 23%, professional claims decreased 42%, outpatient claims decreased 51%, and overall claims decreased 44%
   
• May 2020: Inpatient claims decreased 12%, professional claims decreased 25%, outpatient claims decreased 32%, and overall claims decreased 26%

Compared to 2019, Medicare FFS claims started to rebound in June 2020:

• June 2020: Inpatient claims increased 4%, professional claims increased 3%, outpatient claims decreased 1%, and overall claims increased 3%

Interpreting the data

A combination of factors drove the precipitous drop in Medicare services utilization in April 2020, says Thomas Kornfield, MPP, a senior consultant at Washington, DC-based Avalere Health. "April 2020 is when the lockdowns were most severe. At that time, there was also a lot of uncertainty about what was safe and what was not safe in healthcare facilities, which reduced utilization."

Two factors were likely responsible for the steep decline in Medicare outpatient services during the early phase of the pandemic, he says. "My theory is that these decreased outpatient services were likely elective activities that Medicare beneficiaries felt could be delayed. In addition, many elective procedures were not being provided in the early phase of the pandemic."

There were a pair of primary drivers for the rebound in Medicare services, Kornfield says.

"In June 2020, that is when states started to relax lockdown restrictions. There was also less uncertainty about safety measures such as wearing masks. Healthcare providers had been able to figure out how to treat patients in a way that was safe. So, it was a combination of understanding ways in which services can be provided in a safe environment as well as more states moving toward reopening."

Healthcare providers and researchers should try to monitor and address the impact of deferred care, he says. "It is going to be important to look at what the deferred care means in terms of higher healthcare costs down the road. At this point, the impact of the deferred care is unknown."