Medicare, Medicaid Pay Most of 2005 Hospital Bill that Jumped 90 Percent from 1997

Dec. 12, 2007 – While the presidential candidates debate new ideas for universal health care, it is sneaking up behind us. New numbers show U.S. hospitals charged $873 billion in 2005 – almost a 90 percent increase from the $462 billion charged in 1997. The report also shows that the majority - about two thirds - of this bill was paid by Medicare and Medicaid, although other government programs also helped pay the bill.

Medicare paid the bulk of the national hospital bill ($411 billion), followed by private insurance ($272 billion) and Medicaid ($124 billion). Uninsured hospital stays accounted for $38 billion in charges. The remaining $28 billion was for other insurers and other government programs, including Workers’ Compensation, TRICARE (military) and Title V. The portion paid by the government increased substantially from 2004 - see story link in sidebar.

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The 2005 bill, which is adjusted for inflation, represents the total amount charged for 39 million hospital stays, according to the latest News and Numbers from the Agency for Healthcare Research. The hospital stays increased 13 percent from the 34.7 million in 1997.

Hospital stays for coronary artery disease incurred the highest charges ($46 billion); mother’s pregnancy and delivery had the second highest charges ($44 billion).

The average yearly rate of increase over the last several years in the national hospital bill was 4.5 percent. At this rate, researchers estimate that the annual national hospital bill may reach $1 trillion by 2008.

The AHRQ report also found that:

● One fifth of the national hospital bill was for treatment of just five conditions -
       > coronary artery disease ($46 billion),
       > pregnancy and childbirth ($44 billion),
       > newborn infant care ($35 billion),
       > heart attack ($32 billion), and
       > congestive heart failure ($30 billion).

● The national bill for sepsis and nonspecific chest pain grew twice as fast as the overall growth in hospital charges - about a 180% increase from 1997 to 2005. Other expensive conditions for which the national bill grew faster than overall included -
        > respiratory failure (a 171 percent increase),
        > back pain (170 percent), and
        > osteoarthritis (165 percent).

● Among the 20 most expensive conditions in 2005, ten increased faster than the overall 1997 to 2005 increase in the national bill for all conditions (89 percent). For 10 conditions, the growth was greater than the average of all hospital stays:

Hospital Stays with Greater Than Average Billing Growth
Condition	% Increase
Sepsis	189
Chest pain	181
Respiratory failure	171
Back pain	170
Osteoarthritis	165
Irregular heart beat	131
Procedure complications	120
Congestive heart failure	117
Medical device complications	113
Diabetes	97

Table 1. Top 20 most expensive conditions treated in U.S. hospitals, 2005
Rank	Principal diagnosis	Total national hospital bill (millions)	Percentage of national hospital bill	Number of hospital stays (thousands)
1	Coronary artery disease	$45,985	5.3%	1,110
2	Mother's pregnancy and delivery	$43,925	5.0%	4,712
3	Newborn infants	$35,316	4.0%	4,429
4	Acute myocardial infarction (AMI, heart attack)	$31,946	3.7%	662
5	Congestive heart failure (CHF)	$30,230	3.5%	1,090
6	Pneumonia	$29,535	3.4%	1,355
7	Osteoarthritis	$26,157	3.0%	738
8	Complication of device, implant or graft	$25,291	2.9%	616
9	Sepsis	$24,801	2.8%	538
10	Back pain (spondylosis, intervertebral disc disorders, other back problems)	$20,327	2.3%	647
11	Respiratory failure, insufficiency, arrest (adult)	$19,723	2.3%	336
12	Cardiac dysrhythmias	$17,224	2.0%	697
13	Acute cerebrovascular disease (stroke)	$17,060	2.0%	526
14	Rehabilitation care, fitting of prostheses, and adjustment of devices	$13,848	1.6%	517
15	Complications of surgical procedures or medical care	$13,316	1.5%	463
16	Gall bladder disease	$11,719	1.3%	456
17	Chronic obstructive pulmonary disease (COPD)	$11,506	1.3%	630
18	Diabetes mellitus with complications	$11,171	1.3%	491
19	Hip fracture	$10,869	1.2%	317
20	Nonspecific chest pain	$10,027	1.1%	825
Total for top 20 conditions		$449,976	51.5%	21,155
Total for all hospitalizations		$873,236	100.0%	39,164
Source: AHRQ, Center for Delivery, Organization, and Markets, Healthcare Cost and Utilization Project, Nationwide Inpatient Sample, 2005.

Table 2. Top 20 most expensive conditions billed to Medicare, 2005
Rank	Principal diagnosis	Total hospital charges (millions)	Percentage of Medicare’s hospital bill	Number of hospital stays (thousands)
1	Coronary artery disease	$26,210	6.4%	617
2	Congestive heart failure (CHF)	$22,581	5.5%	840
3	Pneumonia	$18,879	4.6%	816
4	Acute myocardial infarction (AMI, heart attack)	$18,319	4.5%	391
5	Sepsis	$16,597	4.0%	375
6	Osteoarthritis	$15,353	3.7%	438
7	Complication of device, implant or graft	$14,491	3.5%	352
8	Respiratory failure, insufficiency, arrest (adult)	$12,501	3.0%	222
9	Cardiac dysrhythmias	$11,669	2.8%	460
10	Acute cerebrovascular disease (stroke)	$10,020	2.4%	354
11	Rehabilitation care, fitting of prostheses, and adjustment of devices	$9,496	2.3%	378
12	Hip fracture	$9,110	2.2%	268
13	Chronic obstructive pulmonary disease (COPD)	$8,397	2.0%	452
14	Back pain (spondylosis, intervertebral disc disorders, other back problems)	$7,024	1.7%	231
15	Complications of surgical procedures or medical care	$6,404	1.6%	202
16	Acute and unspecified renal failure	$5,823	1.4%	205
17	Diabetes mellitus with complications	$5,745	1.4%	214
18	Heart valve disorders	$5,708	1.4%	56
19	Urinary tract infections	$5,435	1.3%	323
20	Gall bladder disease	$5,213	1.3%	172
Total for top 20 conditions		$234,975	57.2%	7,367
Total for all hospitalizations		$410,692	100.0%	14,557
Source: AHRQ, Center for Delivery, Organization, and Markets, Healthcare Cost and Utilization Project, Nationwide Inpatient Sample, 2005.

Table 3. Top 20 most expensive conditions billed to Medicaid, 2005
Rank	Principal diagnosis	Total hospital charges (millions)	Percentage of Medicaid’s hospital bill	Number of hospital stays (thousands)
1	Mother's pregnancy and delivery	$18,133	14.6%	1,992
2	Newborn infant	$16,048	12.9%	1,876
3	Pneumonia	$3,699	3.0%	185
4	Sepsis	$2,895	2.3%	52
5	Complication of device, implant or graft	$2,722	2.2%	64
6	Respiratory failure, insufficiency, arrest (adult)	$2,710	2.2%	40
7	Coronary artery disease	$2,491	2.0%	68
8	Schizophrenia and related disorders	$2,335	1.9%	120
9	Congestive heart failure (CHF)	$2,316	1.9%	77
10	Cardiac and circulatory congenital anomalies	$2,181	1.8%	20
11	Affective disorders (depression and bipolar disorders)	$2,057	1.7%	170
12	Acute myocardial infarction (AMI, heart attack)	$1,850	1.5%	34
13	Diabetes mellitus with complications	$1,777	1.4%	89
14	Acute cerebrovascular disease (stroke)	$1,624	1.3%	33
15	Skin and subcutaneous tissue infections	$1,525	1.2%	107
16	Complications of surgical procedures or medical care	$1,510	1.2%	52
17	Asthma	$1,353	1.1%	130
18	Gall bladder disease	$1,326	1.1%	54
19	Intracranial injury	$1,320	1.1%	21
20	HIV infection	$1,276	1.0%	32
Total for top 20 conditions		$71,148	57.3%	5,215
Total for all hospitalizations		$124,256	100.0%	7,642
Source: AHRQ, Center for Delivery, Organization, and Markets, Healthcare Cost and Utilization Project, Nationwide Inpatient Sample, 2005.

Table 3. Top 20 most expensive conditions billed to Medicaid, 2005
Rank	Principal diagnosis	Total hospital charges (millions)	Percentage of Medicaid’s hospital bill	Number of hospital stays (thousands)
1	Mother's pregnancy and delivery	$18,133	14.6%	1,992
2	Newborn infant	$16,048	12.9%	1,876
3	Pneumonia	$3,699	3.0%	185
4	Sepsis	$2,895	2.3%	52
5	Complication of device, implant or graft	$2,722	2.2%	64
6	Respiratory failure, insufficiency, arrest (adult)	$2,710	2.2%	40
7	Coronary artery disease	$2,491	2.0%	68
8	Schizophrenia and related disorders	$2,335	1.9%	120
9	Congestive heart failure (CHF)	$2,316	1.9%	77
10	Cardiac and circulatory congenital anomalies	$2,181	1.8%	20
11	Affective disorders (depression and bipolar disorders)	$2,057	1.7%	170
12	Acute myocardial infarction (AMI, heart attack)	$1,850	1.5%	34
13	Diabetes mellitus with complications	$1,777	1.4%	89
14	Acute cerebrovascular disease (stroke)	$1,624	1.3%	33
15	Skin and subcutaneous tissue infections	$1,525	1.2%	107
16	Complications of surgical procedures or medical care	$1,510	1.2%	52
17	Asthma	$1,353	1.1%	130
18	Gall bladder disease	$1,326	1.1%	54
19	Intracranial injury	$1,320	1.1%	21
20	HIV infection	$1,276	1.0%	32
Total for top 20 conditions		$71,148	57.3%	5,215
Total for all hospitalizations		$124,256	100.0%	7,642
Source: AHRQ, Center for Delivery, Organization, and Markets, Healthcare Cost and Utilization Project, Nationwide Inpatient Sample, 2005.

Table 5. Top 20 most expensive conditions billed to the uninsured, 2005
Rank	Principal diagnosis	Total hospital charges (millions)	Percentage of uninsured hospital bill	Number of hospital stays (thousands)
1	Acute myocardial infarction (AMI, heart attack)	$1,747	4.6%	36
2	Mother's pregnancy and delivery	$1,634	4.3%	184
3	Coronary artery disease	$1,265	3.3%	39
4	Newborn infants	$1,058	2.8%	212
5	Pneumonia	$998	2.6%	53
6	Acute cerebrovascular disease (stroke)	$997	2.6%	25
7	Skin and subcutaneous tissue infections	$997	2.6%	71
8	Intracranial injury	$951	2.5%	21
9	Crushing injury or internal injury	$887	2.3%	21
10	Fracture of lower limb	$847	2.2%	29
11	Nonspecific chest pain	$844	2.2%	73
12	Diabetes mellitus with complications	$804	2.1%	48
13	Congestive heart failure (CHF)	$798	2.1%	34
14	Gall bladder disease	$787	2.1%	37
15	Appendicitis	$740	1.9%	38
16	Sepsis	$716	1.9%	15
17	Pancreatic disorders (not diabetes)	$700	1.8%	35
18	Respiratory failure, insufficiency, arrest (adult)	$690	1.8%	13
19	Affective disorders (depression and bipolar disorders)	$580	1.5%	54
20	Alcohol-related mental disorders	$575	1.5%	50
Total for top 20 conditions		$18,614	48.7%	1,088
Total for all hospitalizations		$38,210	100.0%	2,096
Source: AHRQ, Center for Delivery, Organization, and Markets, Healthcare Cost and Utilization Project, Nationwide Inpatient Sample, 2005.

This AHRQ News and Numbers is based on data in The National Hospital Bill: Growth Trends and 2005 Update on the Most Expensive Conditions by Payer. The report uses statistics from the Nationwide Inpatient Sample, a database of hospital inpatient stays that is nationally representative of inpatient stays in all short-term, non-Federal hospitals. The data are drawn from hospitals that comprise 90 percent of all discharges in the United States and include all patients, regardless of insurance type, as well as the uninsured.

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