Services With Increasing Costs

The Agency for Healthcare Quality and Research periodically issues statistical briefs with useful data.  There is a lot of concern about high cost services, but what may help payers manage costs best is understanding where costs are growing most rapidly now.  A recent AHRQ brief looks at that issue.  (AHRQ Brief) The study examined hospital cost trends for Medicare, Medicaid, private insurance and self-pay or uninsured, using the time period from 2001 to 2007, with all costs adjusted to 2007 dollars to account for inflation.

Overall, hospital costs per stay, inflation adjusted, grew 17% in this time period, with a 6.3% increase in the number of stays.  Private insurance had an increase of about 21% but the number of stays declined by 2.9% while Medicare had 17% mean cost growth but stays increased by 5%.  The ten most rapidly growing diagnoses contributed about $49 billion of hospital costs in 2007 and included blood infection, with 174% growth, intestinal infection, with 150% growth,  and acute kidney failure at 148%.  Other notable conditions in the list include osteoarthritis, previous C-section and poisoning by medications and drugs.  Different diagnoses were more significant for different types of payers.

Despite all the focus on better use of medications, it appears that adverse events or misuse are surprisingly accounting for more and more hospital costs.  It also might appear that our ability to control infections in the blood, intestines and on the skin is getting worse.  Notable by omission are chronic diseases, so while they account for a great deal of overall health spending, they don’t appear to be a significant cause of increasing cost in hospitals.