Tuesday, June 29, 2010

How Fast Are Hospital Costs Rising? It Depends On What's Treated And Who's Paying

The average cost for treating blood infection septicemia has risen 174% between 2001 and 2007 making it the largest cost increase of any condition and accounting for $12.3 billion in hospital expenditures. But the rate of increase varied significantly depending on who was paying the bill. For uninsured patients the rate of increase was 228%; for Medicare patients it was 172%; and for private insurance patients it was only 152.5%. Considering all the exposure that hospital acquired blood infections have gotten recently as the most preventable type of infection, this does not look good for hospitals. Medicare for one will cease paying for the hospital acquired infections, so I guess the cost increases for these are not significant.

Here are some of the other high rising conditions grouped by payer:

Medicare -Intestinal Infection 205%
-Kidney Failure 154%

Uninsured -Kidney Failure 179%
-Respiratory Failure 154%

Medicaid -Kidney Failure 160%
-Leukemia 127%

Private insurance -Osteoarthritis 120%
-Kidney Failure 119%

Clearly private insurance patients are seeing the lowest cost increases while the uninsured patients are seeing the highest increases. But before we get up in arms about the uninsured being exploited, there are several things to keep in mind. First, these figures do not take into account the huge bad debt percentage from the uninsured population. Second, many of these patients will become insured under healthcare reform. Still it is hard to justify the disparity between payers.

Truly our healthcare reform, at least at this point, is more about payment reform than care delivery reform. But based on the information above, this may be a good place to start.

More on this later.

Mark Brodeur

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