Hospital spending far below premium increases

Spending on hospital care grew the fastest of all healthcare expenditures over the past year, according to a new report from Altarum Health.

Hospital spending increased 6.4 percent between August 2010 and August 2011, compared to slightly more than 5 percent for prescription drugs, 4 percent for nursing homes, and slightly more than 2 percent for home healthcare.

Altogether, hospital spending comprised 32 percent of total health expenditures, reaching $864 billion. Physician and clinical services was the second largest expenditure, at 19 percent, or $531 billion.

The report noted that there has been a disparity in the increase of insurance premiums and overall healthcare growth. The sector has been growing between a 3.9 percent and 5.4 percent annual rate over the past 24 months, while health insurance premiums were up 9 percent over the past year. The report speculated that insurers based their increases on projected cost accelerations that failed to materialize, or decided to lock in increases in anticipation of the implementation of the Affordable Care Act.

To learn more:
- read the AHA News Now article
- read the Altarum report

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