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HOSPITAL BUDGETS: Hospital spending by category 2015

The following data are based on an analysis of the Centers for Medicare and Medicaid Services (CMS) 2015 inpatient market basket update projections.  A base year of 2010 weights were used.

Hospital Spending (by percent)

  • 59.1  Wages and benefits
  • 14.1  Other products (for example, food, medical instruments)
  •   9.1  Professional fees
  •   6.9  Prescription drugs
  •   3.7  All other: labor intensive
  •   3.7  All other: non-labor intensive
  •   2.1  Utilities
  •   1.2  Professional liability insurance

Source: American Hospital Association. (2017, February). The cost of caring. Click here: http://www.aha.org/content/17/costofcaringfactsheet.pdf  Posted by AHA Resource Center (312) 422.2050 rc@aha.org

Increased inpatient spending pays off

Greater inpatient spending was found to be associated with a lower 30-day mortality rate for most Medicare patients with certain diagnoses in this large-scale study of MEDPAR data on patients admitted to US hospitals between 2001 and 2005.  The patients studied had diagnoses of acute myocardial infarction (AMI), congestive heart failure, stroke, gastrointestinal bleeding, or certain types of surgery with in-hospital complications.  The findings held true for all of these types of patients except those with AMI. 

Source: Kaestner, R., and, Silber, J.H. Evidence on the efficacy of inpatient spending on Medicare patients. The Milbank Quarterly;88(4):560-594, Dec. 2010.