Virginia’s Health Care Sector Economic Trends in 2020

Making progress on improving health care quality and value requires detailed, longitudinal data that tracks health sector spending, employment, and costs. States in particular need these data to assess their own health sectors, track changes over time, and compare their progress to national trends. This need for accurate, up-to-date data at the state level has become increasingly important given the ways the COVID-19 pandemic drastically affected the health economy in 2020 and beyond—when unprecedented shifts in health care utilization, spending, employment, and coverage occurred.

In this report, Altarum experts applied their Health Sector Economic Indicator (HSEI) framework that benchmarks to and builds on official Centers for Medicare & Medicaid Services (CMS) data using other data sources to estimate current trends. They replicate the prior analyses published last year and incorporate new data from CMS, the Commonwealth’s All-Payer Claims Database, and other public sources. They provide the first comprehensive picture of 2020 health economic data for Virginia, including spending by health components and payers, trends in employment, trends in private health insurance costs, and federal government support for health care providers.

Select major findings from the report include:

• Total annual spending on health care in Virginia fell from a revised estimate of $93.8 billion in 2019 to $91.6 billion in 2020 (a decrease of 2.3%), due to the impacts of the COVID-19 pandemic decreasing health sector utilization of care. The decline in health spending was primarily seen in Q2 2020, where Virginia spending fell 10.2% from a year prior.
• Health spending per capita in 2020 in Virginia was nearly $1,000 lower than the national average, with professional, physician, and clinical services; hospital care; nursing home, residential, and home health spending all lower than their national counterparts.
• For individuals with health insurance coverage through a private-sector employer, the average single premium in 2020 was $6,900 and the average family premium was $20,300.
• These annual single and family premiums have increased 16.0% and 15.5% respectively between 2015 and 2020, while combined premium + deductible totals have increased even faster (22.4% for single coverage and 19.2% for family coverage).
• Health care providers in Virginia received a combined $3.6 billion in direct federal government pandemic-related assistance, including $1.3 billion in Paycheck Protection Program funds and $2.3 billion in Provider Relief Funds.
• As a percent of total health care spending, hospitals and nursing home/home health settings in Virginia received less federal financial support compared to the national average, while ambulatory and physician settings received a greater proportion.
• In the fourth quarter of 2020, 366,000 individuals were employed by the health care sector in Virginia, about 11.5% of the total private sector employed population. This is a reduction from the pre-pandemic peak of 381,000 workers.

A variety of other data, assessments, and insights from Virginia’s health sector are available in the report, including comparisons of the Commonwealth’s health sector to national trends and interpretations of these changes over time. Detailed data sources, methodologies, and assumptions are included in a report appendix. The authors would like to thank the Virginia Hospital and Healthcare Association for their support of this work and the Virginia Health Information organization for their assistance and for providing data from the All-Payer Claims Database.

Read the full report here.