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New Study: COVID-19 Testing Costs Could Reach $25 Billion A Year For Diagnostic, $19 Billion A Year For Antibody

posted by Kristine Grow

on June 10, 2020

Every American should be able to get the COVID-19 tests they need. As businesses and the health care system prepare to safely reopen, leaders are looking for answers to determine what testing strategies will best protect against spread of the virus, how much these strategies may cost American taxpayers and health care consumers, and what investments might be necessary moving forward.

To help inform reopen strategies, AHIP retained Wakely Consulting Group to explore the potential costs of COVID-19 testing, including both diagnostic (molecular or antigen) and antibody testing considering different frequencies and costs of testing. The study found that diagnostic testing would cost between $6 billion and $25 billion a year, and antibody testing would cost between $5 billion and $19 billion a year. These estimates include both the cost of the tests, as well as affiliated health care services (e.g., provider visit, urgent care visit) for administering the tests.

Wakely developed a range of potential costs associated with outpatient (diagnostic and antibody) testing that may fall under the three common purposes of tests:

  • Medical necessary tests, to diagnose or treat COVID-19.
  • Public health tests, to collect and analyze the prevalence of COVID-19 in the population on an ongoing basis.
  • Occupational health tests, to ensure workplaces that are safe and to significantly reduce the risks of exposure to COVID-19.

The analysis does not distinguish between testing that is medically necessary for patient treatment and testing designed for public health or occupational health purposes. As noted in the report, there is still a great deal of uncertainty on how testing strategies will be developed and deployed – including what tests will be used, and how many tests a person might receive per year on average. Given this uncertainty, the total cost of testing will be less than the combination of the costs of diagnostic and antibody tests. There is also great uncertainty on what these tests will cost, as well as the cost to administer them, resulting in a wide range of estimates.

This report is a supplement to a separate analysis that Wakely conducted on estimated COVID-19 treatment costs for 2020 and 2021. That study found that costs to treat COVID-19 for 2020 and 2021 could reach over $200 billion, excluding testing costs and accounting for deferred or delayed care.

Testing strategies need to be part of a holistic public and occupational health strategy. Federal guidance should consider funding for testing in that context, and should clearly articulate the roles of insurance providers, employers, and public health officials. Health insurance providers stand ready to work with employers, public health leaders and policymakers to develop and execute robust strategies to protect Americans and reduce the risks of spreading of the virus.

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