Hospitals account for the largest share of all healthcare spending at 33 percent, and several primary factors are driving increased hospital costs.
A recent fact sheet from the American Hospital Association stated there are three main areas of hospital spending that have contributed to growth in spending on hospital care from 2006 to 2010.
1. Costs of goods and services. Roughly 63 percent of every dollar spent by hospitals goes toward wages and salaries, benefits, pharmaceuticals, new technologies, information systems and other goods and services. Labor costs alone constitute 35 percent of total hospital spending.
2. Change in number of services provided. The rising demand for care, due to a growing elderly population and a higher percentage of people using the hospital, has led to higher service volume. This factor accounted for roughly 29 percent of the overall growth in spending on hospital care between 2006 and 2010.
3. Intensity. This factor comprises roughly 8 percent of hospital care spending. Hospitals are using more resources to care for their patients due to larger populations of sicker, more complex patients and the high costs of advanced technologies.
A recent fact sheet from the American Hospital Association stated there are three main areas of hospital spending that have contributed to growth in spending on hospital care from 2006 to 2010.
1. Costs of goods and services. Roughly 63 percent of every dollar spent by hospitals goes toward wages and salaries, benefits, pharmaceuticals, new technologies, information systems and other goods and services. Labor costs alone constitute 35 percent of total hospital spending.
2. Change in number of services provided. The rising demand for care, due to a growing elderly population and a higher percentage of people using the hospital, has led to higher service volume. This factor accounted for roughly 29 percent of the overall growth in spending on hospital care between 2006 and 2010.
3. Intensity. This factor comprises roughly 8 percent of hospital care spending. Hospitals are using more resources to care for their patients due to larger populations of sicker, more complex patients and the high costs of advanced technologies.
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