What’s the cost of COVID-19? For one Iowa patient, a $1 million medical bill

CEDAR RAPIDS — When Cathy Folkers arrived at the hospital this past April, she was not expecting a three-month stay, let alone a stay that cost more than $1 million.

The 57-year-old Cedar Rapids resident rode an ambulance to the emergency room after a fall broke five of her ribs. But even after she was sent home, something didn’t feel right.

She went back to UnityPoint Health-St. Luke’s Hospital the next day, April 26, and was admitted after doctors discovered a punctured lung. They also tested her for COVID-19.

Her COVID-19 test came back positive. Folkers’ health deteriorated quickly after that.

Folkers, who was unvaccinated, spent the next 89 days in and out of the intensive care unit, which included three weeks on a ventilator to help her breathe. When Folkers was placed in a medically induced coma to go onto the ventilator in early May, doctors told her family there was only a 1-in-8 chance she would be taken off, her son Chad Folkers recalled.

But Folkers did improve, and she was discharged on July 23.

Today, Folkers has more than 400 pages of statements and other documents from her nearly three-month hospital stay — one of the only ways she can piece together the time for which she has little memory.

During that period, Folkers and her family didn’t think about the cost of her treatment, and it wasn’t until the medical bills arrived that her family began to grapple with the financial impact of her illness.

The bill for her 89-day hospital stay? $1,028,333.91.

The cost was covered entirely by Medicaid — a fact Folkers said she is thankful for. She lives in affordable housing in Cedar Rapids, and relies on Social Security checks each month to get by.

“I don’t know what I would have done,” Folkers said.

But the financial implications of the disease go far beyond the hospitalization rates. For patients, their recovery costs also can entail prescriptions, occupational and physical therapy, and other continued medical care.

The time taken off from work, both for themselves and their loved ones caring for them, also plays a role when considering the financial toll on families.

Folkers recently received notice she would be deducted $1,600 overpaid to her from her Supplemental Security Income because of a policy that states if an individual enters a hospital or other medical facility, benefits are reduced to $30 a month. She typically receives $840 a month.

Even with some financial assistance from her son, Folkers had to borrow $1,000 to cover her monthly bills, including rent and utilities

“Somehow I’ll get through,” Folkers said. “It’s kind of a robbing-Peter-to-pay-Paul type of thing, but I mean, I just do what I have to do.”

The pandemic is drawing close to its third year, as of this March, and coronavirus infections continue to send Iowans to the hospital. The omicron variant has driven new cases to the highest ever weekly total since March 2020 as of this past week, and hospitalizations reached more than 1,000 admissions statewide.

With Iowans continuing to fall ill to this virus, health care systems statewide still are trying to gain an understanding of what the financial toll will be.

What is the cost of COVID-19?

Approximately 1,600 inpatients were discharged from St. Luke’s in Cedar Rapids with a COVID-19 diagnosis in 2020 and 2021. According to hospital officials, the average cost per discharge was about $15,000.

Individual patient care can vary widely, depending on the severity of someone’s illness, the length of stay and the treatment provided during that stay.

On the low end of the range, the cost of treatment at St. Luke’s was about $1,000 for those who had a short hospital stay — including those who died shortly after admission or those who improved quickly.

For others with prolonged hospital stays, costs have exceeded $250,000, St. Luke’s officials told The Gazette.

The most critically ill patients may require a ventilator, the cost of which varies depending on the length of time on the life-support machine. At St. Luke’s, those costs have varied from $1,000 to $30,000 in 2020 and 2021, officials said.

The state declined to provide any data it may have on the cost of COVID-19 hospitalization for Iowa’s hospitals. State officials also did not respond to requests for reimbursement data from the state-run Medicaid program.

Wellmark Blue Cross Blue Shield, the state’s largest insurance company, also did not immediately respond to requests for data.

Tracking these costs is left to individual hospitals and health care systems, according to the Iowa Hospital Association.

But an outside report may unveil Iowa-specific costs during the first months of the pandemic. FAIR Health, a New York City-based not-for-profit that tracks health care costs nationwide, analyzed data from January to May 2020 on the charge uninsured or out-of-network patients would face as a result of COVID-19 hospitalization.

For a complex patient who is admitted into intensive care and placed on a ventilator, the average charge was more than $278,000, the analysis shows. The average charge was about $51,600 for noncomplex patients — those individuals who are hospitalized but don’t require ventilator or other critical care.

Nationwide, the average COVID-19 hospitalization cost per patient seems to hover around $20,000, according to various sources.

One report from the federal Centers for Medicare and Medicaid Services, or CMS, analyzing data on Medicare beneficiaries found the average COVID-19 hospitalization cost was $24,033. The claims data calculated the cost from more than 1.14 million total hospitalizations from Jan. 2020 until March 2021.

Another study using CMS data reported the average hospitalization cost was $21,752, for a typical stay of about nine days.

According to the study, which was published in the Annals of Internal Medicine in August, the cost increased if the patient needed a ventilator, reaching about $49,000 for an average stay of about 17 days. For those who died, it was about $32,000 for an average length of stay of 11 days.

The study also noted individuals of color incurred higher medical costs than white patients, and that Black and Hispanic patients “accounted for disproportionately high numbers of hospitalizations requiring ventilator support and inpatient deaths.“

One year into the pandemic, Medicare payments for fee-for-service COVID-19 hospitalizations totaled to $16.6 billion, according to the CMS report.

Experts have found the vaccines are effective in preventing serious disease — therefore playing an important role in the potential medical expenses of an infected individual. As the pandemic progresses and the coronavirus continues to spread throughout communities, researchers have begun to study what financial toll unvaccinated patients has had on total COVID-19 costs.

A brief published by the Peterson Center on Healthcare and the Kaiser Family Foundation estimated that more than 690,000 COVID-19 hospitalizations could have been prevented by the vaccines between June and November 2021.

These hospitalizations resulted in $13.8 billion in preventable COVID-19 costs, the brief states.

“At the end of the day, it’s viewed as a driver of cost. It’s a volatile issue, but it’s a reality,” Tim Charles, president and CEO of Mercy Medical Center in Cedar Rapids, said in an interview with The Gazette.

Financial impact goes beyond hospital stays

For hospitals leaders, the cost of inpatient stays is just one piece of the puzzle when considering the financial impact the pandemic has had on hospitals in Iowa and across the country.

“The whole industry is trying to grapple with true cost of this event,” Charles said. “Costs associated with patient care for COVID-19 is a disproportionate number when compared to history because of patients who are incredibly sick demanding enormous resources over an extended periods of time.”

Mercy Medical declined to provide inpatient COVID-19 data. Charles said costs of hospitalization would not provide the full picture of the pandemic’s financial toll on the Cedar Rapids hospital.

The research firm Kaufman Hall projected that hospitals nationwide would lose $54 billion in net income throughout the course of 2021, even when taking federal relief funding into account. More than a third of hospitals in the United States were expected to see negative operating margins.

The analysis, published in March, pointed to three major contributing factors, including a higher number of sicker patients requiring longer inpatient stays that Charles alluded to. Other contributing factors include higher expenses for labor, medications and other supplies as well as fewer outpatient visits.

Since the pandemic arrived in Iowa 22 months ago, factors driving hospital costs have changed over time, Charles said.

At first, the increase in expenses came as hospital officials stockpiled personal protective gear and deployed staff to other parts in the hospital to address the surge in COVID-19 patients.

In the second year of the pandemic, cost of care for hospitals has been driven by “dramatic shifts in staffing availability,” Charles said.

Ongoing staffing challenges at health care systems across Iowa have been exacerbated as the state nears its third year in the pandemic, experts say.

There are not enough nurses or other health care staff to care for patients and, as a result, hospitals increasingly have relied on agencies to hire contract staff.

That cost to hire contact staff has increased dramatically during the pandemic as hospitals across the country scramble to find workers. Charles said the price tag to pay these traveling workers can range from $140 an hour to $300 an hour.

Mercy Medical officials and leaders at other hospitals also have made “significant investments” in current staff, including raises and other recruitment and retention incentives, Charles said.

However, Charles said hospitals likely will be grappling with the long-term consequences of staff burnout for some time.

“We tend to focus on financial cost, but I’m more concerned about the ongoing impact on the well-being of our workforce in health care and implications it has on individuals who continue to work in this environment,” he said.

Comments: (319) 398-8469; michaela.ramm@thegazette.com