AHA reports on sources of growth in spending on patient care in hospitals

The American Hospital Association has released a report examining the sources of growth in spending on patient care in hospitals.  Although spending on hospital care has grown more slowly than spending on other health care services, it is still the most significant driver of overall growth in health care spending. 

The report examines data from The Centers for Medicare & Medicaid Services and an AHA Annual Survey between 2004 – 2008.

Key Findings:

  • 64% of health care spending in hospitals came from the rising costs of goods and services (including labor costs).
  • The single biggest driver of cost is labor costs, accounting for 35% in spending growth.
  • Growing population and increased hospital use per person accounts for 34% of growth.
  • 2% of the increase is attributed to hospitals using more resources to care for each patient.

 (SOURCE: American Hospital Association Cost of Caring Report, http://aha.com, March 2010)