Report: Cancer, mental health drove health care costs in 2020

Written on Jun 10, 2021

Despite the ongoing pandemic, cancer continues to be the most costly medical condition for insurance plans, and mental health saw a significant increase in spending, according to a new report by Sun Life. The insurance carrier’s annual report, High-cost claims and injectable drug trends analysis, looked at claims from 2017 to 2020.

The report found that for 2020, cancer was the most common and costly medical condition, with a 16% increase in costly cases that resulted in stop-loss claims. Cancer drugs make up 9 of the top 10 high-cost drug claims for 2020.

Mental health was identified as a growing cost concern, with a 21% growth in mental health claims between 2019 and 2020. Alcohol or opioid abuse and depression were the most common conditions, according to claims data.

Although COVID-19 had a clear impact on health care spending, that was due mostly to the large number of cases overall, the data suggested. “The relatively small number of COVID-19 cases that were severe enough to result in a stop-loss claim averaged approximately $340,000 per patient, with infection and respiratory failure as the most common comorbidities contributing to high costs,” the report said.

The higher claims costs associated with comorbidities were linked to long inpatient stays, duration of treatment, extensive diagnostics, cost of medication, complications, and continued care. Other COVID-19 comorbidities that resulted in high costs were acute renal failure, encephalopathy (brain damage), pneumonia, and cardiac dysrhythmia (abnormal heartbeat).

The report noted the frequency of cancer diagnoses—nearly 40% of Americans will be diagnosed with cancer at some point during their lifetime. Despite the fact that many Americans delayed doctor visits and preventive care during the COVID-19 pandemic, cancer claims continued to dominate in frequency and cost in 2020.

The report said there was a notable rise in mental health-related claims in 2020. In addition to the 21% increase in mental health claims, the overall spend on mental health claims increased by nearly 25%, the report found. The analysis also said there will likely be a sustained impact on mental health claims following the pandemic. Among the most affected: communities of color and health care workers, who not only worried about the pandemic but experienced a high-stress work environment during the past year.

According to the report, 4 in 10 adults reported some sort of anxiety or depression in 2020, compared to just 1 in 10 the year before. “While claims related to mental health disorders tend to be lower in terms of average cost, our data also showed an increase both in frequency of claims and total spend,” the report said.

Among the top categories in mental health claims: alcohol-related disorders, opioid-related disorders, and depressive disorders. In addition, the report noted that people with complex health conditions tended to have an increased likelihood of also having a mental health issue.

The report made predictions about health claims trends, based on the data from the report. These include:

  • Continued interest in telehealth/remote care: Two months prior to the start of the pandemic, 1% of Medicare visits were done via telehealth; in April 2020, that number had jumped to 43%. The report predicts that interest in telehealth will continue, even as in-person visits increase.
  • The impact of workplace flexibility: with more workers opting to work from home, and an increased willingness of employers to show flexibility, the report predicts remote work may have a positive impact on the spread of other illnesses, due to less in-person contact in workplaces.
  • Employer focus on employee health and wellbeing: one of the clear outcomes of the pandemic and the subsequent economic downturn is that employers are putting a higher priority on the health and well-being of employees. The report noted that many companies are expanding voluntary benefits and that workers are increasingly interested in those types of benefits.

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