Hospital technology, not uninsured patients, has been a driving cause of the sharp increase in healthcare costs in Texas, according to a study in Healthcare Management, Practice and Innovation.
Researchers analyzed data on revenue by payer type from 319 Texas hospitals during the study period (2000 to 2007). The data showed increases in both revenues and costs during the study period, with the most substantial increases linked to private payers.
However, the researchers did not find any evidence that increased prices, especially among private payers, were instigated to compensate for increased charity care burdens. Despite a slight association between decreases in uninsured/self-pay revenues and an increase in private payer prices, the average revenue created by uninsured/self-pay patients rose 19 percent over the study period, meaning cost-shifting cannot explain the rise in private payer prices. A similar lack of correlation was found between Medicare and Medicaid reimbursements and private payer prices.
Final results showed approximately two-thirds of the cost increases during the period were due to increases in the cost of care, likely reflecting increased use of advanced technologies.
"If technology growth is behind the cost increases, then greater efforts should be devoted to determining which technologies are cost-effective," said lead researcher Vivian Ho, PhD, in a news release. "Greater thought could also be devoted to designing reimbursement mechanisms that discourage inefficient use of new technologies."
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