AHA: Growth in Medicare spending for hospital services at lowest in 17 years

Hospitals have seen costs fall, despite overall healthcare spending growth, according to an American Hospital Association report.

"Hospitals and health systems are where the most complex care is provided for ill and injured patients," the industry group wrote. "Yet, spending on inpatient and outpatient care has grown more slowly than spending on other health services. Hospitals and health systems have worked hard to make care more effective and efficient."

Here are 10 findings from the report.

1. The healthcare spending growth per capita rate increased from approximately 2 percent in 2013 to roughly 4.5 percent in 2014 and almost 5 percent in 2015, according to AHA.

2. Overall, AHA found the primary driver of healthcare spending growth per capita was increased use and intensity of services.

3. In explaining the rising healthcare spending growth rates, AHA specifically noted an additional 21 million to 22 million people have gained health insurance since 2010. The industry group also noted the aging population and that nearly half of Americans have chronic conditions such as diabetes and heart disease.

4. While healthcare spending growth increased in recent years, the annual percent change in hospital prices has dropped significantly over the last decade, the AHA found.

5. Hospital price growth, as measured by the Hospital Producer Price Index, was just 0.9 percent in 2015, the slowest rate since 1998 and down from 4.4 percent in 2006, according to the AHA.

6. Growth in Medicare spending for inpatient and outpatient hospital services is at its lowest level in 17 years. Inpatient spending fell by 1.9 percent in 2015, according to AHA.

7. Overall growth in spending on hospital care (5.6 percent) was lower than the healthcare average (5.8 percent).

8. Wages and benefits account for nearly 60 percent of inpatient hospital costs.

9. Inpatient prescription drug spending increased by 38.7 percent per hospital admission between 2013 and 2015, the AHA found.

10. AHA estimates between 2010 and 2014 hospitals, collectively, spent more than $47 billion each and every year on IT.

 

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