HCUP reports on national inpatient hospital costs and most expensive conditions by payer

Healthcare spending in the United States increased 4.2 percent between 2016 and 2017 to $3.5 trillion, or $10,739 per person, and accounted for 17.9 percent of the Gross Domestic Product, according a Statistical Brief from the Healthcare Cost and Utilization Project (HCUP).

The HCUP Statistical Brief includes data on the costs of hospital inpatient stays in the US using the 2017 National Inpatient Sample (NIS). It describes the distribution of costs by primary expected payer and illustrates the conditions accounting for the largest percentage of each payer's hospital costs. Hospital charges were converted to costs using HCUP Cost-to-Charge Ratios. The expected payers examined are Medicare, Medicaid, private insurance, and self-pay/no charge. Hospital costs in this Statistical Brief represent the hospital's costs to produce the services—not the amount paid for services by payers—and they do not include separately billed physician fees associated with the hospitalization.

Constituting nearly one-third of all healthcare expenditures, hospital spending rose 4.7 percent to $1.1 trillion during the same time period. Although this growth represented deceleration compared with the 5.8 percent increase between 2014 and 2015, the consistent year-to-year rise in hospital-related expenses remains a central concern among policymakers.

In 2016, there were over 35 million hospital stays, equating to 104.2 stays per 100,000 population. The average cost per hospital stay was $11,700, making hospitalization one of the most expensive types of healthcare utilization. Higher costs are documented for stays among patients with an expected payer of Medicare compared with stays with other expected payers ($13,600 for Medicare vs. $9,300-$12,600 for other payers).

In 2017, aggregate hospital costs for 35.8 million hospital stays totaled $434.2 billion.

The five most expensive inpatient conditions were septicemia, osteoarthritis, liveborn (newborn) infants, acute myocardial infarction, and heart failure. The 20 most expensive conditions accounted for slightly less than half of aggregate hospital costs.

The share of aggregate inpatient hospital costs by primary expected payer was 66 percent for Medicare and Medicaid combined, 27 percent for private insurance, and 3 percent for self-pay/no charge stays.

Septicemia ranked among the three most costly conditions in the hospital for all four expected payer groups.

Conditions related to pregnancy and childbirth accounted for 4 of the top 20 most expensive conditions expected to be paid by Medicaid.

Medicaid was the only expected payer for which 3 of the top 20 most expensive conditions were related to mental and substance use disorders.

In 2017, Medicare and Medicaid combined to account for approximately two-thirds (66.3 percent) of aggregate hospital costs.

Government payers (Medicare and Medicaid combined) accounted for 66.3 percent of all hospital costs in 2017. Stays with an expected payer of Medicare constituted 46.9 percent and those with Medicaid amounted for 19.4 percent of the $434.2 billion in aggregate hospital costs. Private insurance was the second most common expected payer, representing 27.2 percent of total costs, and hospital stays with an expected payer of self-pay/no charge accounted for 3.3 percent of total hospital costs.

The percentage of aggregate hospital costs in 2017 for stays with a primary expected payer of Medicare (46.9 percent) was greater than the percentage of hospital stays expected to be covered by Medicare (40.5 percent).

The proportion of aggregate hospital costs (46.9 percent) for stays with an expected payer of Medicare was larger than the proportion of hospital stays (40.5 percent) with an expected payer of Medicare. In contrast, patients with an expected payer of Medicaid accounted for 19.4 percent of hospital costs compared with 23.1 percent of hospital stays.

The 20 most expensive conditions accounted for slightly less than half (46.6 percent) of aggregate hospital costs in 2017. Septicemia was the most expensive condition treated, amounting to $38.2 billion, or 8.8 percent of aggregate costs for all hospital stays in 2017. Other high-cost hospital stays were for osteoarthritis ($19.9 billion, or 4.6 percent), liveborn (newborn) infants ($16.0 billion, or 3.7 percent), acute myocardial infarction ($14.3 billion, or 3.3 percent), and heart failure ($13.6 billion, or 3.1 percent).

The 20 most expensive conditions constituted 43.3 percent of all hospital stays. One out of every 10 hospital stays was for liveborn (newborn) infants (10.3 percent). Among the 20 most expensive conditions, septicemia was the second most common reason for hospitalization, representing 5.8 percent of all hospital stays, followed by osteoarthritis and heart failure (3.5 and 3.0 percent, respectively).

In summary, similarities across the expected payer categories are described below:

Five conditions were among the 20 most expensive conditions for all four expected payer groups.

There were some commonalities across payers in the conditions that generated high aggregate hospital costs. For all four expected payer groups, septicemia was among the top three most expensive conditions.

The following five conditions were among the 20 most expensive conditions for all four expected payer groups, ordered by aggregate cost among all payers:

·       Septicemia

·        Acute myocardial infarction

·        Heart failure

·        Respiratory failure; insufficiency; arrest

·        Diabetes mellitus with complications

Seven of the 20 most expensive conditions for hospital stays with an expected payer of Medicare did not appear in the top 20 conditions for other payers. The following conditions were among the 20 most expensive conditions for Medicare stays, ordered by aggregate cost:

·        Fracture of the neck of the femur (hip), initial encounter

·        Nonrheumatic and unspecified valve disorders

·        Acute and unspecified renal failure

·        Complication of cardiovascular device, implant or graft, initial encounter

·        Urinary tract infections

·        Gastrointestinal hemorrhage

·        Complication of internal orthopedic device or implant, initial encounter

·        Circulatory, injury, and respiratory conditions represented nearly two-thirds of the 20 most expensive conditions for stays with an expected payer of Medicare.

Six of the 20 most expensive conditions during hospital stays with an expected payer of Medicare were related to the circulatory system, ordered by aggregate cost:

·        Heart failure

·        Acute myocardial infarction

·        Coronary atherosclerosis and other heart disease

·        Cardiac dysrhythmias

·        Cerebral infarction

·        Nonrheumatic and unspecified valve disorders

Four of the 20 most expensive conditions during hospital stays with an expected payer of Medicare were related to injuries and complications:

·        Fracture of the neck of the femur (hip), initial encounter

·        Complication of cardiovascular device, implant or graft, initial encounter

·        Complication of other surgical or medical care, injury, initial encounter

·        Complication of internal orthopedic device or implant, initial encounter

Three of the 20 most expensive conditions during hospital stays with an expected payer of Medicare were related to the respiratory system:

·        Respiratory failure; insufficiency; arrest

·        Chronic obstructive pulmonary disease and bronchiectasis

·        Pneumonia (except that caused by tuberculosis)

Three of the 20 most expensive conditions during hospital stays with an expected payer of Medicaid were related to the respiratory system:

·        Respiratory failure; insufficiency; arrest

·        Pneumonia (except that caused by tuberculosis)

·        Chronic obstructive pulmonary disease and bronchiectasis

Three of the 20 most expensive conditions during hospital stays with an expected payer of Medicaid were related to the circulatory system:

·        Heart failure

·        Acute myocardial infarction

·        Cardiac and circulatory congenital anomalies

Three of the 20 most expensive conditions during hospital stays with an expected payer of Medicaid were related to mental and substance use disorders:

·        Schizophrenia spectrum and other psychotic disorders

·        Depressive disorders

·        Alcohol-related disorders

The estimates in this Statistical Brief are based upon data from the HCUP 2017 National Inpatient Sample (NIS).

Healthcare Cost and Utilization Project has the Statistical Brief.