The Impact of Funding Inpatient Treatments for COVID-19 on Health Equity in the United States: A Distributional Cost-Effectiveness Analysis

Objectives: We conducted a distributional cost-effectiveness analysis (DCEA) to evaluate how Medicare funding of inpatient COVID-19 treatments affected health equity in the United States.

Methods: A DCEA, based on an existing cost-effectiveness analysis model, was conducted from the perspective of a single US payer, Medicare. The US population was divided based on race and ethnicity (Hispanic, non-Hispanic black, and non-Hispanic white) and county-level social vulnerability index (5 quintile groups) into 15 equity-relevant subgroups. The baseline distribution of quality-adjusted life expectancy was estimated across the equity subgroups. Opportunity costs were estimated by converting total spend on COVID-19 inpatient treatments into health losses, expressed as quality-adjusted life-years (QALYs), using base-case assumptions of an opportunity cost threshold of $150 000 per QALY gained and an equal distribution of opportunity costs across equity-relevant subgroups.

Results: More socially vulnerable populations received larger per capita health benefits due to higher COVID-19 incidence and baseline in-hospital mortality. The total direct medical cost of inpatient COVID-19 interventions in the United States in 2020 was estimated at $25.83 billion with an estimated net benefit of 735 569 QALYs after adjusting for opportunity costs. Funding inpatient COVID-19 treatment reduced the population-level burden of health inequality by 0.234%. Conclusions remained robust across scenario and sensitivity analyses.

Conclusions: To the best of our knowledge, this is the first DCEA to quantify the equity implications of funding COVID-19 treatments in the United States. Medicare funding of COVID-19 treatments in the United States could improve overall health while reducing existing health inequalities.