Population, health-care costs growing

More patients, higher costs blamed for spike in hospital spending

Posted: Thursday, February 20, 2003

WASHINGTON (AP) -- The biggest reason Americans are spending more on hospital care is that more people are using hospitals, industry groups said Wednesday.

The remainder of the growth in hospital spending is due to increases in the costs of hospital goods and services such as drugs, medical devices and health care personnel, according to a study by the American Hospital Association and the Federation of American Hospitals.

A government report released last month found Americans spent more on health care in 2001, particularly for hospital visits. The report by the government's Centers for Medicare and Medicaid found that hospital spending grew 8.3 percent, the fastest growth for that sector in a decade. The hospital spending growth rate had been 2.9 percent as recently as 1998.

More people using hospitals accounted for more than half -- about 55.4 percent -- of the growth from 1997 to 2001, the new study found.

''Hospitals are experiencing ever-increasing demand for patient care at the same time that the costs necessary to provide that care are on the rise,'' said Chip Kahn, president of the Federation of American Hospitals, which represents privately owned hospitals. ''Many of these cost-drivers for hospitals are beyond the control of our institutions.''

Rick Pollack, executive vice president of the American Hospital Association, said, ''We find ourselves at a very unique point in our history -- where the impact of a series of forces are all hitting at the same time -- and all contributing to increases in the cost of caring for patients.''

Hospitals are just one group of health care providers expected to lobby Congress for additional money during this legislative session. Scores of health providers have said they need more money to deal with the rising cost of providing care.

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