Health Care Costs of COVID-19 vs Influenza and Pneumonia

ABSTRACT

Objectives: To estimate payments for the treatment of COVID-19 compared with that of influenza or viral pneumonia (IP), from the perspective of the US payer.

Study Design: Retrospective cohort analysis.

Methods: Patients with COVID-19 during the period from October 1, 2020, to February 1, 2021, or IP during the period from October 1, 2018, to February 1, 2019, in the IBM MarketScan databases were identified. The index was defined as the date of the first COVID-19 or IP diagnosis. Patients with COVID-19 were stratified by severity. Variables for all patients included demographics and comorbidities at the time of index and duration of disease. IP and COVID-19 cohorts were matched using propensity scores, and inflation-adjusted all-cause payments (ACP), and disease-specific payments (DSP) for IP vs COVID-19 were estimated using generalized linear models.

Results: Matched cohorts included 6332 Medicare (female, 58.5%; mean [SD] age, 75.3 [7.6] years), and 397,532 commercially insured patients (female, 57.6%; mean [SD] age, 34.7 [16.7] years). ACP and DSP were significantly higher in the COVID-19 cohort vs IP cohort. Payments for severe/critical COVID-19 were significantly greater than those for IP, with adjusted marginal incremental DSP and ACP of $24,852 (95% CI, $21,573-$28,132) and $50,325 (95% CI, $43,932-$56,718), respectively. IP was significantly less expensive than moderate COVID-19 for commercial payers but not Medicare. IP was more expensive than mild COVID-19 for all payers.

Conclusions: Payments associated with severe/critical COVID-19 significantly exceeded those associated with IP. For Medicare, IP was more expensive than mild or moderate COVID-19. For commercial payers, IP was less expensive than moderate COVID-19 but more expensive than mild COVID-19.

Am J Manag Care. 2023;29(10):509-514. https://doi.org/10.37765/ajmc.2023.89439

Takeaway Points

• Overall mean payments associated with the treatment of COVID-19 are significantly greater than those associated with treatment of influenza and pneumonia for commercial and Medicare payers.
• For commercial payers, the incremental all-cause payments for treatment of severe/critical COVID-19 exceeded those of influenza and pneumonia by a mean of $50,325. For Medicare, the mean incremental payments of severe/critical COVID-19 vs influenza and pneumonia reached $25,378.
• Payments for moderate COVID-19 were higher than those for influenza and pneumonia for commercial payers but not for Medicare. Mild COVID-19 cases required lower payments than influenza or pneumonia for all payers.

According to World Health Organization statistics, approximately 94 million confirmed cases of COVID-19 and more than 1 million deaths caused by the disease were registered in the United States as of September 7, 2022.¹ COVID-19, which is caused by the SARS-CoV-2 virus, has shown key resemblances to influenza, specifically similar symptoms (eg, fever, cough, shortness of breath) and complications (eg, pneumonia, respiratory failure). Certain vulnerable populations, including older adults and patients with underlying medical conditions, have a greater chance of developing severe forms of illness.

However, COVID-19 is more contagious than influenza and individuals with COVID-19 remain infectious for longer periods of time. One of the unique characteristics of COVID-19 is its ability to cause deadly illness in otherwise healthy individuals, which is less likely with influenza and pneumonia.^2,3

Respiratory diseases overall represent a significant financial burden. In a study by Bartsch et al, the mean cost of COVID-19 was modeled using a Monte Carlo simulation model and estimated at $3045. In a recent cost-effectiveness analysis, Sheinson et al estimated the cost of inpatient admissions without respiratory support and inpatient admissions with nonmechanical respiratory support at $8767 and $13,282, respectively, and the cost was $49,631 for patients requiring inpatient admissions with mechanical ventilation.⁴ The cost of influenza has also been previously estimated. During the eight 2001-2002 through 2008-2009 seasons in the United States, projected annual influenza-related health care expenditures ranged from $11.3 million to $25.6 million and health care costs from $2.0 billion to $5.8 billion.⁵ A case-control study conducted among patients hospitalized with influenza revealed that median health care costs of patients with influenza-related pneumonia reached $18,428 vs $621 for patients with influenza without complications.⁶

The impact of COVID-19 on the financial burden of respiratory disease and how COVID-19 compares with influenza and pneumonia are not well documented. Our study was designed to estimate health care payments using a comprehensive analysis of all COVID-19–related claims during the duration of COVID-19 disease and compare them to payments for influenza or viral pneumonia (IP).

METHODS

Data Sources

The Merative MarketScan Commercial Claims and Encounters (CCAE) and Medicare Supplemental databases were used. The IBM MarketScan databases comprise enrollment information, demographics, and adjudicated inpatient medical, outpatient medical, and outpatient pharmacy claims data collected from more than 300 large, self-insured US employers and more than 25 US health plans for individuals younger than 65 years and their dependents.

Study Population

This was a retrospective cohort study of patients with COVID-19 compared with the matched cohort of those with IP in the United States. Patients with COVID-19 during the period from October 1, 2020, to February 1, 2021, or with IP during the period from October 1, 2018, to February 1, 2019, were identified in the CCAE and Medicare Supplemental databases. The date of the first COVID-19 or IP diagnosis was defined as index; all patients had 6 months or more of continuous enrollment pre- and post index.

In the COVID-19 group, duration of disease (DOD) was determined based on the presence of any 1 COVID-19 sign or symptom (CSS). A complete list of CSSs and their corresponding diagnosis codes are shown in eAppendix Table 1 (eAppendix available at ajmc.com). For each patient with COVID-19, CSS diagnoses were identified starting 5 days before the COVID-19 index event. Diagnoses listed prior to the index date were used because patients often presented with CSSs before being tested for and receiving a diagnosis of COVID-19. (For many patients with mild and moderate disease, most health care use happened prior to index.) COVID-19 was considered ongoing as long as the gap between distinct CSS diagnoses was less than 35 days. When a new diagnosis was identified after a 35-day gap, it was assumed that this might be a new condition. This rule was used because most CSSs are very generic in nature (eg, cough, headache) and their potential association with index COVID-19 may thus decline as the time gap in diagnosis dates increases. The decision to use a 35-day gap (vs a shorter or longer gap) was based on a review of histograms of time gaps for CSS conditions for all patients. For patients with mild or moderate COVID-19 with no health care events in the database after their COVID-19 index code, it was assumed they would have a DOD of 9 days following that last COVID-19 diagnosis. In our study, the minimum DOD of any symptomatic patient was 14 days. This was based on prior publications on disease duration.^7,8 Patients with no CSS diagnoses in the 5 days prior to and up to 35 days after index were considered asymptomatic and excluded from the study.

COVID-19 cases were categorized by disease severity (mild, moderate, or severe/critical [S/C]) using the signs and symptoms definitions from the Janssen phase 3 ENSEMBLE clinical trial (NCT04505722) definition of severity, as shown in eAppendix Table 2. The definitions of mild and S/C cases in the Janssen trial are very similar to those of the National Institutes of Health (eAppendix Table 3). Both the mild and moderate Janssen trial definitions also include very detailed descriptions of diagnoses and capture all the signs and symptoms typically described in the literature as being associated with COVID-19. These definitions of disease severity allow for a very unambiguous, and exhaustive, categorization of disease as mild, moderate, or S/C.

In the IP group, DOD was defined from first diagnosis to last related visit/prescription, with a maximum 35-day gap between visits/prescriptions. Costs incurred within the 5 days prior to index were also included, as was done in the COVID-19 group, to ensure consistent cost calculations in both groups.

Variable Creation

Variables included (1) patient demographics at index and comorbidities (identified from 7 months to 1 month prior to index date): age, sex, geographic location, diseases as per Elixhauser Comorbidity Index (ECI), specific health conditions not included in ECI (pregnancy, functional impairment [visual/hearing]), and duration of continuous enrollment post index; (2) preindex care, from 7 months to 1 month before index: count of all prescriptions, vaccinations, and total payments for health care in the period 7 months to 1 month preindex; and (3) concurrent diagnostic variables (from 15 days before index to end of study) for the COVID-19 group: diagnoses for signs and symptoms indicative of COVID-19 (these variables were also captured to identify concurrent signs and symptoms related to IP), duration of inpatient admission, duration of intensive care unit (ICU) admission, ventilation type, treatments received, and discharge status. Preindex care and ECI were calculated using a 6-month window, from 7 months to 1 month before index. The 1-month preindex cutoff was required to avoid including diagnoses and care related to the index disease in the list of comorbidities and costs (especially in the COVID-19 cohort, in which patients may have developed symptoms prior to testing positive). The 6-month window for comorbidity identification and preindex cost, resulting in a start time 7 months preindex, was required to allow identification of most key chronic diseases, which would require at least 1 visit in a 6-month time frame.

The outcomes were (1) all-cause payments (ACP) for inpatient and outpatient visits and prescriptions (for commercially insured patients with prescription coverage) for the entire duration of the disease and (2) disease-specific payments (DSP) for inpatient and outpatient visits and prescriptions associated with CSSs (for the COVID-19 cohorts) or care associated with IP diagnoses specifically.

Data Analysis

Descriptive statistics were reported for all study variables and outcomes by payer (commercial vs Medicare supplemental), disease group (COVID-19 vs IP), and severity (for patients with COVID-19) as means and SDs for continuous variables and frequencies and percentages for categorical variables. Adjusted payments and health care utilization were estimated for each payer/disease group/severity separately using generalized linear models (GLMs) (family: γ; link: log).

IP and COVID-19 cohorts were matched 1:1 on age, sex, and comorbidities (R package MatchIt; distance: GLM; method: nearest). Inflation-adjusted payments to the 2021 consumer price index for IP vs COVID-19, and IP vs each severity of COVID-19, were estimated using GLMs with γ distribution and log link.

RESULTS

The study included 3166 patients with IP and 19,914 patients with COVID-19 identified in the Medicare supplemental database, and 333,209 patients with IP and 363,448 patients with COVID-19 identified in the commercial database. Baseline demographic characteristics and comorbidities for the IP and COVID-19 cohorts are shown in Table 1. In the commercial cohort, the patients with IP were significantly younger and had fewer comorbidities compared with patients with COVID-19. Hypertension, diabetes, hypothyroidism, obesity, and depression were nearly twice as prevalent in the COVID-19 cohort compared with the IP cohort, as shown in eAppendix Table 4. In the Medicare supplemental cohort, the mean ages of patients in the IP and COVID-19 groups were similar (75.2 and 75.9, respectively). However, the mean (SD) ECI score was significantly higher in the COVID-19 cohort vs the IP cohort (3.2 [2.5] vs 2.6 [2.3]). All comorbidities were significantly more prevalent in the COVID-19 cohort compared with the IP cohort, except for lymphoma, metastatic cancer, and rheumatoid arthritis (eAppendix Table 4).

Crude, unadjusted payments for all-cause and disease-specific treatments for the IP and COVID-19 cohorts are shown in Table 2. In the commercial cohort, patients with IP had mean ACP and DSP less than $3000, with very large SDs, indicative of the large spread of payments in this cohort (mean [SD] ACP, $2326 [$22,372]; mean [SD] DSP, $859 [$9,459]). The 95th percentile reached $6183, suggesting that 5% of the IP cohort had payments at or above $6183. In the Medicare supplemental cohort, these payments were higher, with mean (SD) payments of $12,365 ($37,821) for ACP and $3697 ($12,720) for DSP, and the 95th percentile of ACP reaching $51,205. For COVID-19, commercial ACP and DSP increased nearly 50-fold between mild and S/C cases: ACP for mild cases reached a mean (SD) cost of $950 ($4330), whereas the mean ACP for S/C was $56,277 ($128,561). A similar increase was observed in DSP (mild: $358 [$1592]; S/C: $28,679 [$80,891]). Medicare payments were generally lower but also showed a significant increase between mild and SC cases (mean [SD] ACP, mild: $2255 [$8351]; S/C: $35,605 [$45,562]). The 95th percentile for S/C cases, in both commercial and Medicare supplemental populations, required ACP that exceeded $100,000.

A propensity score matching methodology was applied to control for differences in demographic characteristics between patients with COVID-19 and patients with IP. Two cohorts were created, matching for age, sex, and ECI. The changes in pre- to postmatching balance of covariates are shown in eAppendix Figure 1 (for the commercial cohort) and eAppendix Figure 2 (for the Medicare supplemental cohort).

After matching, baseline demographic characteristics were similar for patients with COVID-19 and patients with IP, as shown in Table 3. In the commercial and Medicare supplemental cohorts, 198,766 and 3166 patients with IP were matched to the same number of patients with COVID-19, respectively. The severity distributions in the COVID-19 cohort were as follows: 46.3% mild, 48.0% moderate, and 5.7% S/C in the commercial cohort, and 23.1% mild, 45.5% moderate, and 31.4% S/C in the Medicare supplemental cohort. The rates of comorbidities in the matched cohorts were well balanced, as shown in eAppendix Table 4.

ACP and DSP for the entire duration of IP or COVID-19, for commercial and Medicare supplemental patients, are shown in Table 4. IP includes all patient severities, and COVID-19 is subdivided by disease severity.

In the commercial population, payments for IP, both ACP and DSP, were between those required for mild and moderate COVID-19. The ACP for treatment of IP, mild COVID-19, and moderate COVID-19 were $2985 (95% CI, $2856-$3114), $1259 (95% CI, $1189-$1327), and $4068 (95% CI, $3859-$4276), respectively. The DSP for IP, mild COVID-19, and moderate COVID-19 were $980 (95% CI, $948-$1013), $467 (95% CI, $446-$490), and $1753 (95% CI, $1674-$1832), respectively.

For Medicare supplemental patients, IP payments were between those required for moderate and S/C COVID-19. The ACP for treatment of IP, moderate COVID-19, and S/C COVID-19 were $11,726 (95% CI, $10,510-$12,943), $7175 (95% CI, $6145-$8205), and $37,105 (95% CI, $30,992-$43,218), respectively. DSP for the same were $3466 (95% CI, $3092-$3840), $2280 (95% CI, $1923-$2637), and $13,631 (95% CI, $11,136-$16,125), respectively.

For both commercially insured and Medicare supplemental patients, IP required payments were significantly lower than those required for S/C COVID-19 disease. Similar findings were observed for ACP and DSP. The mean incremental ACP from IP to S/C COVID-19 was $50,325 (95% CI, $43,932-$56,718) for commercially insured patients and $25,378 (95% CI, $19,248-$31,508) for Medicare supplemental patients. The mean incremental DSP from IP to S/C COVID-19 was $24,852 (95% CI, $21,573-$28,132) for commercially insured patients and $10,164 (95% CI, $7652-$12,676) for Medicare supplemental patients.

DISCUSSION

This study was designed to assess from the perspective of the US payer health care payments associated with COVID-19 compared with those associated with IP. Payments for IP were lower than those associated with S/C COVID-19 for all payers. For moderate COVID-19 cases, payments for IP were higher in the Medicare population, but lower for commercial payers. IP was more expensive than mild COVID-19 for all payers.

We analyzed DSP in addition to ACP in an effort to narrow down payments to those most likely caused by the disease. As mentioned earlier, DSP included payments associated with an exact diagnosis of IP or, for the COVID-19 cohorts, of a sign or symptom of COVID-19. Ancillary services, such as laboratory testing or imaging, without the exact mention of those diagnoses were not included in the DSP calculation. It is therefore very likely that DSP may underestimate the cost of care for IP and COVID-19. This is particularly true for IP, where claims had to include an exact diagnosis of influenza or pneumonia. For COVID-19, because of the novelty of the codes and broad presentation of the disease, services associated with any CSS diagnosis were included in the disease-specific calculations. The methodology for calculating DSP was therefore more restrictive for IP than for COVID-19 but, as stated earlier, potentially underestimated costs in both cases. The ACP, however, did include all care received during the duration of the disease, for both IP and COVID-19. The ACP could, however, have included some unrelated emergency care provided during the ongoing IP or COVID-19. However, during an IP or COVID-19 ongoing disease, it is unlikely that expensive, unrelated elective care would have been undertaken.9 The true cost of COVID-19 and IP to payers thus may be most comparable to that of the ACP.

Payments for COVID-19 and IP had wide ranges, as shown by SDs in unadjusted payments. For COVID-19, the increase in payments from mean to the 90th and 95th percentiles was significant, with the top 10th and top 5th percentiles of patients in the moderate and S/C categories having 2 and 3 times higher payments than average, respectively. For IP, the increase affected only the top 5th percentile, with most payments remaining relatively even up to the top 10th percentile of patients and then increasing significantly (approximately 3-fold) for the top 5% of patients.

For patients with COVID-19, we analyzed payments as a function of severity, as payments for patients with S/C disease were more than 50 times higher than those for patients with mild disease in the commercial cohort and nearly 15 times higher in the Medicare supplemental cohort. This finding is not surprising, considering the range of symptoms and severities associated with COVID-19, but it does highlight the importance of stratifying COVID-19 cases by severity for any economic analysis.

To the best of our knowledge, no US-based comparative studies on health care payments of patients with mild, moderate, and severe COVID-19 vs influenza have previously been published. In a multicenter, retrospective cohort study conducted in Japan, health care resource utilization was higher in hospitalized patients with COVID-19 vs influenza. During the entire hospitalization period, patients with COVID-19 had higher ICU admission and need for mechanical ventilation than patients with influenza (ICU admission, 5.6% vs 1.1%; mechanical ventilation, 3.3% vs 2.5%; all P < .0001). Moreover, in the adjusted model, patients hospitalized with COVID-19 were at a higher risk of in-hospital mortality than patients with influenza (odds ratio, 1.83; 95% CI, 1.64-2.04).¹⁰ Pawelka et al also reported that hospitalized patients with COVID-19 had higher length of stay, rate of complications, and in-hospital mortality than those with influenza, even in a population with fewer comorbidities.¹¹

Limitations

Our study has the following limitations. A major assumption in the analysis was the maximum 35-day gap between diagnoses or care related to COVID-19. This maximum gap in care was required, as CSSs are generic (eg, headache, myalgia, gastrointestinal symptoms) and patients may return with these common signs and symptoms irrespective of their initial case of COVID-19. Therefore, our analysis is conservative, as care due to the initial COVID-19 infection with a time gap in care greater than 35 days would not be included in our payment analysis. Our study used 2 types of payments (DSP and ACP), as discussed earlier, neither representing the exact amounts paid for the treatment of IP or COVID-19. These 2 values provide a range, with the true payment being possibly closer to the ACP, as described earlier. Another limitation is that patients with IP were not stratified by severity. Our analysis of the 90th and 95th percentiles was designed to evaluate payments in the top 10th and top 5th percentiles of patients to address this limitation. We also limited our analysis of the IP cohort to the period between October 2018 and February 2019 and the COVID-19 cohort to the period between October 2020 and February 2021. These time frames were selected to exclude overlap in the IP cohort of COVID-19 cases. Continuous changes in health care, new variants of COVID-19, and increased vaccination rates may, however, affect cost estimates.

CONCLUSIONS

Costs for patients with IP were shown to be far lower than those of patients with S/C COVID-19, even in the Medicare supplemental population, where IP may cause significant health risks. Payments associated with IP were comparable with those of mild to moderate COVID-19. Our findings thus highlight the key economic differences between COVID-19 and IP and the economic burden of COVID-19 vs IP. Reducing the proportion of patients who develop S/C COVID-19, which is possible through vaccination and treatment, is key to lessening the economic burden of COVID-19 and potentially leveling it to that of IP.

Acknowledgments

The authors wish to acknowledge Dr Lilit Hovhannisyan for editorial support.

Author Affiliations: Janssen Global Services (FR, BJP, ACEK), Raritan, NJ; Epidemiology & Real-World Data Sciences, Johnson & Johnson MedTech (JWR, CEH, PMC), New Brunswick, NJ; Mu Sigma (RD), Bangalore, India; Janssen Scientific Affairs (JKD, BB), Titusville, NJ.

Source of Funding: This study was funded by Johnson & Johnson.

Author Disclosures: Dr Richards, Dr Patterson, Ms Ruppenkamp, Dr El Khoury, Dr DeMartino, Mr Bookhart, Dr Holy, and Dr Coplan report being employees of Johnson & Johnson, which manufactures a COVID-19 vaccine. Dr Patterson, Dr El Khoury, Dr DeMartino, Mr Bookhart, Dr Holy, and Dr Coplan also report owning stock in Johnson & Johnson. Ms Debnath reports working as an analyst for Mu Sigma, paid for by Johnson & Johnson.

Authorship Information: Concept and design (FR, BJP, JWR, ACEK, JKD, BB, CEH, PMC); acquisition of data (JWR); analysis and interpretation of data (BJP, JWR, RD, ACEK, JKD, CEH, PMC); drafting of the manuscript (CEH, PMC); critical revision of the manuscript for important intellectual content (FR, BJP, JWR, RD, ACEK, JKD, BB, CEH, PMC); statistical analysis (RD, CEH, PMC); administrative, technical, or logistic support (BB); and supervision (FR, BJP, ACEK, BB, CEH, PMC).

Address Correspondence to: Chantal E. Holy, PhD, MSc, Johnson & Johnson, 410 George St, New Brunswick, NJ 08901. Email: choly1@its.jnj.com.

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