Monday, January 13, 2014

Hospital Pains and Payers

I came across a report today on the costs of inpatient hospital costs in the United States from the Agency for Healthcare Research and Quality.

This Statistical Brief entitled, "National Inpatient Hospital Costs: The Most Expensive Conditions by Payer, 2011" provides the distribution of inpatient costs by primary payer as well as illustrating which conditions accounted for the largest percentage of each payer's hospital costs.

Who are the payers?  The primary payers are Medicare, Medicaid, private insurance and the uninsured.

What about the costs to provide the care?  The hospital costs represent the hospital's cost to provide the service-not what the hospital is paid for the service.  It also does not include physician fees associated with the hospitalization.

Here are some of the interesting factoids I found in the report.

  • In 2011, inpatient hospital costs totaled $387 billion for nearly 39 million hospital stays.
  • Nearly 2/3 of inpatient hospital costs were for individuals on Medicare ($183 billion) and Medicaid ($60 billion). Private insurance only accounted for 29 percent of hospital costs and only 4 percent for those who were uninsured.

  • The most expensive condition treated in U.S hospitals is septicemia that consumes over $20 billion in hospital costs and in which over 1 million hospitalizations result.  Osteoarthritis is the second most expensive condition followed by complication of devices, implants and grafts.  It is interesting that conditions #1 and #3 often result from previous interventions in the hospital to begin with.
  • Costs relating to liveborn babies is fourth on the list of conditions.  However, this involves almost 4 million discharges compared to 1 million cases of septicemia.
  • The high number of cases and costs for septicemia, osteoarthritis and complication of devices, implants, the result of a huge number of the cases being Medicare-related. These conditions represent three of the top four high cost conditions for Medicare. Congestive heart failure is the fourth.  
  • Liveborn births is ranked #1 in Medicaid costs accounting for 10% of total hospital costs on 1.7 million hospital discharges.  This is almost 50% of total costs for births nationally!!
  • Mood disorders is the fourth-ranked condition in terms of costs for Medicaid.
  • Liveborn costs are also the highest total hospitalization cost for private insurance but it represents only 5% of total private insurance costs.
  • Osteoarthritis and back disorders ranks #2 and #3 in expensive conditions for private insurance. Interestingly, neither of these conditions show up in the Top 20 for Medicaid.  
  • The #1 high cost condition billed to the uninsured are heart attacks and strokes at #3.  This suggests that due to lack of insurance coverage the uninsured neglected preventive care to a greater extent than others with coverage.  At the same time, it is interesting that liveborn costs were #20 on the list of the uninsured.  Could it be that the lack of health insurance is very effective birth control?

What I found interesting in looking at the report was that total inpatient costs billed to uninsured patients totaled only $17 billion for 2011 representing only 4% of total inpatient costs.  And to think that the country went through Obamacare principally because of these "high" hospitals costs that were being transferred to the rest of us?  It truly boggles the mind when you look at the data.

In addition, there are many liberals that believe that the country needs "Medicare for All".  Again, looking at the data, almost 2/3 of inpatient healthcare costs are for individuals on Medicare and Medicaid.  Only 29% of costs are incurred for private insurance.  It almost seems that we are not too far from "Medicare for All" anyway.

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