Inside HSCA: Inside HSCA Guest Blog: Supplies and Devices Found to be a Large Contributor to the Growth in Inpatient Costs

Jared Lane K. Maeda, PhD, MPH, is a Research Scientist at Kaiser Permanente’s Mid-Atlantic Permanente Research Institute, and a co-author of the recent study, “What Hospital Inpatient Services Contributed the Most to the 2001 to 2006 Growth in the Cost Per Case?”

Hospital inpatient care accounts for the largest amount of health care spending in the United States. Imaging and other advanced technological diagnostic services, such as CT scans and MRIs, have been frequently cited as one of the main reasons for rising inpatient costs. However, in our study that was recently published in Health Services Research, we found that supplies and devices (including stents, artificial joints, and pins) contributed to the largest proportion of the 2001-2006 growth in the average cost per discharge across all discharges at 24.2 percent. Intensive care unit and room and board semi-private costs were also found to be large contributors (accounting for 17.6 percent and 11.3 percent, respectively). In contrast, imaging and other advanced technological services was only a small contributor at 4.9 percent.

Among congestive heart failure discharges, supplies and devices was also found to be the most costly service component in 2006, with cardiac pacemakers and other implants leading the costs for this service category. For osteoarthritis discharges, the 2001-2006 growth in the average cost per discharge for supplies and devices was more than three times higher than all discharges.

Our analysis was based on more than 10.2 million discharges from community, non-rehabilitation hospitals in nine states using 2001 and 2006 data from the Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases and the Medicare Cost Reports. More research is needed to better understand the underlying reasons for the growth in inpatient costs we observed.