Annual stats show hospitals keep costs low

Despite enormous economic pressures, the nation’s hospitals and health systems continued to keep their costs low in 1997, according to the latest Chicago-based American Hospital Association’s (AHA) Annual Survey. Survey highlights of more than 5,000 member and nonmember hospitals and health systems are found in Hospital Statistics, which is published by AHA’s subsidiary Health Forum.

For the third year in a row, the survey found little or no growth in hospital costs. In 1997, the growth in hospitals’ costs to care for patients within the hospital and on an outpatient basis (total adjusted expense per admission) was 0.6%. Five years ago, that number was about 8%.

"Hospital leaders have had real success in keeping costs down for their patients while improving the overall health of their communities," says Dick Davidson, AHA president. "But it’s unclear how long this trend can continue. With the resources needed to meet the year 2000 technology challenges and skyrocketing drug prices, keeping costs low will become more difficult for hospitals and health systems across America."

Hospitals will feel even more financial pressure in the years to come, with Congress reducing payments to hospitals by about $44 billion over five years beginning in 1998. In addition, the Medicare Payment Advisory Commission in Washington, DC, estimates that Medicare payments to hospitals will drop from 90 cents per dollar of outpatient care to 78 cents for care after the Balanced Budget Act of 1997 is fully implemented.

The survey results also suggest that a major focus of hospitals is promoting the wellness and health of its community. In 1997, nearly all respondents reported that their hospital’s mission included a focus on community wellness. About six out of 10 hospitals responded that they disseminate reports to their community on the quality and costs of health care services.

Some additional highlights from the survey include:

- The average length of stay for patients continued to drop, declining to an all-time low of 6.1 days.

- Outpatient visits continued to climb. In 1997, community hospitals saw a 2.3% increase in outpatient visits over 1996. Over the past five years, outpatient visits increased about 29%. During that same period, the overall days patients spent admitted to the nation’s hospitals (inpatient days) have dropped 12.9%.

- The number of full-time equivalent personnel employed by community hospitals increased to 3.79 million in 1997, up from 3.62 million in 1992.

- About 23% of hospitals were involved in developing an HMO insurance product independently or through a joint venture in 1997, up from 19% of hospitals in 1994, the first year when data were collected.

[Editor’s note: This year’s edition of the survey includes tables highlighting aggregate utilization, personnel, and financial data by metropolitan statistical areas as well as detailed hospital facilities and services information, which allow users to determine how many hospitals in a given area offer a certain service. To order the book, call (800) 821-2039. The price is $105 for AHA institutional members and $200 for nonmembers.]