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Hospital Cost Components

By December 14, 2011Commentary

The Healthcare Cost and Utilization Project is sponsored by the Agency for Healthcare Research & Quality and releases periodic Statistical Briefs analyzing various aspects of health care spending.  A new release looks at hospital inpatient costs.   (HCUP Brief)   In 2009 there were 39.4 million inpatient stays in community hospitals, with a total cost of $361.5 billion.  The average stay was 4.6 days, at an average cost of $9,200.  In 1997, the average stay was 4.9 days with the average cost at $6,600.  Inflation adjusted per stay costs rose 3.9% per year during the period between 1997 and 2008.  Rates of stays per thousand people stayed relatively constant, at around 128, although they grew slightly for people below age 65 and fell slightly for people over age 65.

The components which could factor into overall spending growth are population growth, increases in the number of stays per unit of population, and increases in cost per stay, which is affected both the change in the mix of services delivered during a stay and the unit cost of those services.  Increase in cost per stay accounted for 71% of the spending rise, population growth accounted for 24% and the remainder was due to an increase in stays.  There were some differences in the population below and over age 65.  For those over 65, the average length of stay dropped a full day, from 6.4 to 5.4, while staying flat for the under 65 group at 4.1.  This is undoubtedly the result of the Medicare DRG system.

The most common reasons for hospitalization among the non-elderly were birth and mood disorders, and the most costly conditions were septicemia, back problems, birth, osteoarthritis and complications of devices, implants or grafts (suggesting potential quality issues).  The most rapidly growing conditions in terms of cost were septicemia, back problems and osteoarthritis.  For the elderly, the common causes of a stay were heart-related issues and pneumonia and the highest costs were incurred for heart disease, osteoarthritis and septicemia, while the fastest growing conditions were septicemia, back problems and osteoarthritis, just as for the younger population.  Much of the growth in cost for these conditions was due to increasing stays per population unit.

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