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Big Pandemic Spending at Kansas Hospitals Could Make Your Insurance Even More Expensive

(Photo by David Condos, Kansas News Service)

 

WICHITA, Kan. (KNS) — Spending shot up at hospitals in the first year of the pandemic amid struggles to find workers and critical supplies. Kansas saw a particularly big jump — and residents may end up footing the bill.

Hospitals in the state spent an average of $2,228 per patient per day in 2020, a 13% jump from the year before. That outpaced the national spending increase, according to an analysis of American Health Association data by LendingTree.

“Hospitals have been facing longstanding financial issues even before the pandemic,” said Chad Austin, president and CEO of the Kansas Hospital Association. “And more recently, hospitals are not immune to the challenges created from the cost and the impact of the pandemic.”

Soaring costs for workers, prescription drugs and supplies like personal protective equipment fueled the spending surge, he said. Some of those issues, including a shortage of nurses and nursing assistants that have forced medical facilities to rely on expensive staffing agencies, still remain.

“Some communities are still facing the same issues,” Austin said. “We are seeing some relief in other communities where the cost of staffing agencies has gone down slightly, but it’s still a significant portion of the overall operations of the hospital.”

Meanwhile, some patients were sitting in hospitals for days while they waited for room to open up at facilities that could treat them. Those delays in transferring patients also cost hospitals more money.

“Because we have such a rural, diverse health care system,” said Cindy Samuelson, a senior vice president with the Kansas Hospital Association, “there were some challenges in finding places where people could go to get the right care that they needed.”

The spending boom could mean bigger bills for Kansans.

“Ultimately,” said senior LendingTree analyst Nick VinZant, who authored the report, “when we see hospital costs increase, that is going to be passed on down to people’s health insurance premiums.”

Between 2016 and 2020, health premiums in Kansas swelled 14% — slightly less than the national average, but still nearly double the rate of inflation during that period. The average Kansan paid $6,675 for health insurance in 2020.

And those numbers don’t yet reflect the pandemic-fueled hike in hospital spending.

“How long before this filters out to everybody is really the big question,” VinZant said. “That day might be coming for a lot of us.”

The state’s high rate of uninsured people — which, unlike most states’, did not improve during the pandemic despite special programs to boost coverage rates — could mean even bigger premium increases for people who are insured.

“We still have a large pool of uninsured patients in the state because we didn’t expand Medicaid,” said Donna Ginther, an economics professor at the University of Kansas. “When hospitals have a large number of uninsured patients, those costs get passed on to people with private insurance.”

Hospital expenses also offer an early window into the state of the health care industry as a whole. VinZant said higher costs there likely indicate higher costs across the board — which could compound insurance price hikes.

“If hospital expenses are going up this much, how much are other medical care costs also going up because of the pandemic?” said VinZant. “And then how much is that ultimately going to lead to an increase in your health insurance premiums?”

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Rose Conlon reports on health for KMUW and the Kansas News Service. Follow her on Twitter at @rosebconlon. The Kansas News Service is a collaboration of Kansas Public Radio, KCUR, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy.

 

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