Unbiased Analysis of Today's Healthcare Issues

Cause of Rising Hospital Costs (Hint: It’s not MRIs and CT Scans)

Written By: Jason Shafrin - Dec• 19•12

A recent study use measures of hospital costs to charges to examine changes in inpatient cost between 2001 and 2006.  What did they find?


The data come from the Healthcare Cost and Utilization Project State (HCUP) State Inpatient Databases (SID) and Medicare Cost Reports for all community, nonrehabilitation hospitals in nine states.  The nine states (KY, ME, MN, NE, NY, TN, TX, WA and WV) represent 22 percent of all discharges from U.S. community, nonrehabilitation hospitals in 2001 and 2006 combined.


Between 2001 and 2006, the total cost for hospital inpatient services increased by $18.5 billion (52.0 percent) in inflation-adjusted dollars…By comparison, the mean cost per discharge for hospital inpatient services increased by $1,938 (25.4 percent) overall during the 5-year period. The difference between the change in the total cost and the mean cost per discharge is accounted for by the increase in discharges, which contributed somewhat less than half (41.1 percent) of the increase in total cost for hospital inpatient services.

What was the main drivers of increased hospital cost? The answer is supplies and devices, ICU services, and room and board.


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