Care costs, demand increased in 2003

Demand for inpatient and outpatient care continued to grow in 2003, as did the costs of providing that care, according to the latest American Hospital Association (AHA) Annual Survey.

Hospital expenses per adjusted admission grew by 6%, driven by the rising costs of new technologies, pharmaceuticals, and payroll, the survey found, but reimbursements failed to keep pace, causing operating margins to decline.

Medicare payment fell to 95 cents for every dollar hospitals spent caring for Medicare patients, and Medicaid reimbursement fell to 92 cents on the dollar. As a result, hospitals’ financial health remained fragile, with roughly one-third operating in the red. Even as overall demand for care increased, hospitals experienced a 1.1% decline in outpatient surgeries — the first in more than two decades — reflecting the rapid growth of ambulatory surgery centers.

The survey results were released in AHA Hospital Statistics 2005, published by the AHA subsidiary Health Forum.

AHRQ tool offers help to assess hospital safety

The Agency for Healthcare Research and Quality has unveiled a new tool to help hospitals evaluate their progress in creating a culture of safety. The Hospital Survey on Patient Safety Culture helps hospitals assess employees’ attitudes about patient safety, teamwork within and across units, openness of communication, response to errors, and other key components of a safety culture.

The American Hospital Association (AHA) will encourage members to use the survey to obtain a more complete picture of the quality of care they provide and identify opportunities, according to Nancy Foster, AHA senior associate director for public policy development. "Creating an organizational culture in which staff are aware of the critical role they can play in patient safety is fundamental to patient safety improvement."

Paul Schyve, MD, senior vice president of the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), said conducting the survey would help hospitals meet JCAHO accreditation requirements. For a survey and user’s guide, go to

CMS releases paper on HIPAA security rule

The Centers for Medicare & Medicaid Services (CMS) has released the first in a series of seven papers intended to give guidance on the Health Insurance Portability and Accountability Act’s (HIPAA) security rule. Each paper will focus on a specific topic related to the "Security Standards for the Protection of Electronic Protected Health Information," commonly known as the security rule. Most hospitals and health plans must comply with the rule by April 20, 2005.

The first paper provides background on the rule and its relationship to the HIPAA medical privacy rule. Future papers will address administrative, physical, and technical safeguards; organizational policies and procedures and documentation requirements; basics of risk analysis and risk management; and implementation for small providers.

To see the final security rule, go to the CMS web site at