A hospital industry report pinned rising hospital costs on increased patient volume and labor expenses. Of the $83.6 billion increase in spending on hospital care from 1997 to 2001, more than half -- 55.4% -- was attributable to increased volume, reflecting both greater utilization and population growth, according to the report by PricewaterhouseCoopers. The report was commissioned by the American Hospital Association and the Federation of American Hospitals. The cost of goods and services accounted for the remainder of the cost increase, with labor being the biggest contributor. During that time, total hospital margins dropped about 3 percentage points and patient margins, although rising slightly, remained negative, the report said. Annual hospital spending growth slowed from a high of 8.3% in 2001 to projected increases of 7.4% in 2002 and 5.5% in 2003. This year hospitals are expected to represent 30.8% of the nation's healthcare bill, compared with 31.7% in 2001. Read the report or the executive summary. -- by Tony Fong
Demand, labor behind nation's hospital costs: study
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