A study commissioned by the AHA found hospitals' price increases closely follow their costs and the hospital sector accounted for a steady 30 percent-plus share of U.S. healthcare expenditures, according to the AHA study.
This is the second recent AHA-commissioned study by Compass Lexecon disputing assertions by health insurers and some think tanks that hospital prices are out of control and must be reined in by federal antitrust enforcers.
"This extensive research casts serious doubt on claims of market power based simply on differences in prices," the AHA said in a letter accompanying the study that was sent to the Department of Justice's Antitrust Division and the Federal Trade Commission.
Here are some findings from the study:
* Hospital prices are directly related to a variety of labor and capital costs as well as the level and type of care received by the patients treated by the hospital.
* Labor costs alone accounted for more than half of total hospital expenses, growing by 5-8 percent a year from 2002 to 2009.
* Up to 72 percent of differences in non-Medicare prices across hospitals can be explained by such factors as case mix, regional costs, hospital investments in capital and other improvements, type of hospital and other tangible factors.
* Among the 28 percent remaining differences, the rising cost of providing higher quality care was a key factor and other factors included costs imposed by different state regulations, different cost-containment strategies and errors or inconsistencies in data.
* Medicare and Medicaid patients now account for more than 60 percent of all admissions.
* Medicare and Medicaid cover less of hospital costs. While Medicare paid 99.1 percent of costs in 2000, that figure dropped to 90.1 percent in 2009. Medicaid's share of costs dropped from 94.5 percent in 2000 to 89.0 percent in 2009.
* Uncompensated care now accounts for 6 percent of total hospital expenses. These costs are reflected in the hospital charges absorbed by other payors.
Read the AHA-commissioned study on hospital prices (pdf).
Read more coverage of hospital prices:
- Report Sees No Link Between Hospitals' Market Power, Price Increases
- Study on Variances in Hospital Pricing 'Deeply Flawed,' AHA Says
- Hospital Prices Up 1.8% in Last 12 Months
This is the second recent AHA-commissioned study by Compass Lexecon disputing assertions by health insurers and some think tanks that hospital prices are out of control and must be reined in by federal antitrust enforcers.
"This extensive research casts serious doubt on claims of market power based simply on differences in prices," the AHA said in a letter accompanying the study that was sent to the Department of Justice's Antitrust Division and the Federal Trade Commission.
Here are some findings from the study:
* Hospital prices are directly related to a variety of labor and capital costs as well as the level and type of care received by the patients treated by the hospital.
* Labor costs alone accounted for more than half of total hospital expenses, growing by 5-8 percent a year from 2002 to 2009.
* Up to 72 percent of differences in non-Medicare prices across hospitals can be explained by such factors as case mix, regional costs, hospital investments in capital and other improvements, type of hospital and other tangible factors.
* Among the 28 percent remaining differences, the rising cost of providing higher quality care was a key factor and other factors included costs imposed by different state regulations, different cost-containment strategies and errors or inconsistencies in data.
* Medicare and Medicaid patients now account for more than 60 percent of all admissions.
* Medicare and Medicaid cover less of hospital costs. While Medicare paid 99.1 percent of costs in 2000, that figure dropped to 90.1 percent in 2009. Medicaid's share of costs dropped from 94.5 percent in 2000 to 89.0 percent in 2009.
* Uncompensated care now accounts for 6 percent of total hospital expenses. These costs are reflected in the hospital charges absorbed by other payors.
Read the AHA-commissioned study on hospital prices (pdf).
Read more coverage of hospital prices:
- Report Sees No Link Between Hospitals' Market Power, Price Increases
- Study on Variances in Hospital Pricing 'Deeply Flawed,' AHA Says
- Hospital Prices Up 1.8% in Last 12 Months