Survey shows hospitals are keeping costs down

Length of stay drops, outpatient visits climb

You’re battling increased competition, managed care, and government price controls, and according to the American Hospital Association (AHA), you are, for the moment, winning. The Chicago-based AHA’s latest annual survey of more than 5,000 hospitals and health systems found that despite enormous economic pressures, the nation’s hospitals and health systems were able to keep their costs low in 1997.

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%. These and other survey highlights are found in the 1999 edition of Hospital Statistics, which is published by AHA’s subsidiary, Health Forum.

But you have about enough time to give yourself a pat on the back. Then you’d better get back to determining how to make that low-cost trend continue in the face of more pressures.

"Hospital leaders have had real success in keeping costs down for their patients while improving the overall health of their communities," says AHA president Dick Davidson. "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 continue to get squeezed’

With Congress reducing payments to hospitals by about $44 billion over the next five years, hospitals have just begun to feel the impact. Under the Balanced Budget Act, hospitals’ financial picture will become dimmer, Davidson says. According to the Medicare Payment Advisory Commission, Medicare payments to hospitals will drop from 90 cents per dollar of outpatient care to 78 cents for care after the law is fully implemented. "The nation’s hospitals are caring for their communities efficiently and effectively. But hospitals and health systems continue to get squeezed on all fronts."

The survey results suggest that a major focus of hospitals is promoting the wellness and health of their community. In 1997, nearly all respondents reported that their 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. Other highlights from the survey are:

• 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, overall 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 the data were collected.

More data from 5,000+ facilities

Hospital Statistics contains data gathered from more than 5,000 hospitals and health systems across the nation, including AHA members and nonmembers alike.

New to this year’s edition are 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 get a copy of Hospital Statistics, call (800) 821-2039. The price is $105 for AHA institutional members and $200 for nonmembers. For more information, visit the AHA Web site at or contact the AHA at One North Franklin, Chicago, IL 60606. Telephone: (312) 422-3000.]