Managed Care


Hospital Costs Grow 25 Percent

MANAGED CARE July 2010. © MediMedia USA
News and Commentary

Hospital Costs Grow 25 Percent

MANAGED CARE July 2010. ©MediMedia USA

Inpatient care is the largest portion of health care spending in the United States. A new survey from the Healthcare Cost and Utilization Project, under the auspices of the Agency for Healthcare Research and Quality, estimates that inflation-adjusted hospital costs grew by 24.6 percent to $343 billion from 2001 to 2007.

The report identifies which 10 conditions generated the most rapidly increasing hospital costs during that time period.

During that period mean costs per day grew 17.2 percent, with a 6.3 percent increase in the number of hospital discharges.

The increases varied by payer and stemmed from changes in inpatient costs and hospitalization rates.

For example, although discharges incurred for private insurance had the largest increase in mean cost per stay (20.8 percent), there was a decline in the number of stays incurred for private insurance (2.9 percent). In contrast, the average cost per hospitalization incurred for Medicaid and for the uninsured grew relatively slowly, about 14 percent, but it was coupled with dramatic growth in the number of hospital stays (20.1 and 29.9 percent, respectively).

The report also notes the growth in number of stays and total costs for the top 10 conditions by payer. For all payers, total costs more than doubled for stays attributed to blood infection and acute kidney failure. Degenerative joint disease was the most expensive condition incurred for private insurers ($4.6 billion) with a 120.3 percent increase in total costs.

The report says that Medicare patients accounted for more than half the costs of five of the most expensive conditions. These were acute kidney failure (67.8 percent), blood infection (65.2 percent), respiratory insufficiency, arrest, or failure (62.6 percent), intestinal infection (60.6 percent), and degenerative joint disease (55.1 percent). Degenerative joint disease, more common and debilitating with age, generated the second highest amount of cost for Medicare ($6.5 billion) in 2007.

Private insurance was the primary payer for about half of all stays among women in labor who had a previous C-section (51.3 percent) and showed a 55.7 percent growth in total costs for this diagnosis from 2001 to 2007. Medicaid came up as the second most common payer (41.4 percent) for a previous C-section stay.


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