We have located links that may give you full text access.
Comparative Study
Journal Article
Costs of care and administration at for-profit and other hospitals in the United States.
New England Journal of Medicine 1997 March 14
BACKGROUND: In fiscal year 1990, administration accounted for 24.8 percent of total hospital costs in the United States - nearly twice the share in Canada. Studies from the 1970s and early 1980s found high costs, especially for administration, at for-profit hospitals.
METHODS: We calculated administrative costs for 6227 nonfederal hospitals and the total costs of inpatient care for 5201 acute care hospitals in the United States for fiscal year 1994 on the basis of data the hospitals submitted to Medicare. We analyzed similar data for fiscal year 1990. Using multivariate analysis, we assessed the effect of hospital ownership (private not-for-profit, for-profit, and public) on administrative costs, controlling for hospital type, census region, hospital size, and the proportion of revenues derived from outpatient services. We adjusted inpatient costs for local wage levels, hospitals' reporting periods, and case mix.
RESULTS: Administrative costs accounted for an average of 26.0 percent of total hospital costs in fiscal year 1994, up 1.2 percentage points from 1990. They increased by 2.2 percentage points, to 34.0 percent, for for-profit hospitals; by 1.2 percentage points, to 24.5 percent, for private not-for-profit hospitals; and by 0.6 percentage point, to 22.9 percent, for public hospitals. In 1994, administration accounted for 37.5 percent of total costs at psychiatric hospitals (44.4 percent at for-profit hospitals) and 33.0 percent of total costs at rehabilitation hospitals (37.7 percent at for-profit hospitals). In a multivariate analysis, for-profit ownership was associated with a 7.9 percent absolute (34 percent relative) increase in the proportion of hospital spending devoted to administration as compared with public hospitals and a 5.7 percent absolute (23 percent relative) increase as compared with private not-for-profit hospitals. Among acute care hospitals, for-profit institutions had higher adjusted costs per discharge ($8,115) than did private not-for-profit ($7,490) or public ($6,507) hospitals. Much of the difference was due to higher administrative costs ($2,289, $1,809, and $1,432 per discharge, respectively).
CONCLUSIONS: Administrative costs as a percentage of total hospital costs increased in the United States between 1990 and 1994 and were particularly high at for-profit hospitals. Overall costs of care were also higher at for-profit hospitals.
METHODS: We calculated administrative costs for 6227 nonfederal hospitals and the total costs of inpatient care for 5201 acute care hospitals in the United States for fiscal year 1994 on the basis of data the hospitals submitted to Medicare. We analyzed similar data for fiscal year 1990. Using multivariate analysis, we assessed the effect of hospital ownership (private not-for-profit, for-profit, and public) on administrative costs, controlling for hospital type, census region, hospital size, and the proportion of revenues derived from outpatient services. We adjusted inpatient costs for local wage levels, hospitals' reporting periods, and case mix.
RESULTS: Administrative costs accounted for an average of 26.0 percent of total hospital costs in fiscal year 1994, up 1.2 percentage points from 1990. They increased by 2.2 percentage points, to 34.0 percent, for for-profit hospitals; by 1.2 percentage points, to 24.5 percent, for private not-for-profit hospitals; and by 0.6 percentage point, to 22.9 percent, for public hospitals. In 1994, administration accounted for 37.5 percent of total costs at psychiatric hospitals (44.4 percent at for-profit hospitals) and 33.0 percent of total costs at rehabilitation hospitals (37.7 percent at for-profit hospitals). In a multivariate analysis, for-profit ownership was associated with a 7.9 percent absolute (34 percent relative) increase in the proportion of hospital spending devoted to administration as compared with public hospitals and a 5.7 percent absolute (23 percent relative) increase as compared with private not-for-profit hospitals. Among acute care hospitals, for-profit institutions had higher adjusted costs per discharge ($8,115) than did private not-for-profit ($7,490) or public ($6,507) hospitals. Much of the difference was due to higher administrative costs ($2,289, $1,809, and $1,432 per discharge, respectively).
CONCLUSIONS: Administrative costs as a percentage of total hospital costs increased in the United States between 1990 and 1994 and were particularly high at for-profit hospitals. Overall costs of care were also higher at for-profit hospitals.
Full text links
Related Resources
Trending Papers
Challenges in Septic Shock: From New Hemodynamics to Blood Purification Therapies.Journal of Personalized Medicine 2024 Februrary 4
Molecular Targets of Novel Therapeutics for Diabetic Kidney Disease: A New Era of Nephroprotection.International Journal of Molecular Sciences 2024 April 4
The 'Ten Commandments' for the 2023 European Society of Cardiology guidelines for the management of endocarditis.European Heart Journal 2024 April 18
A Guide to the Use of Vasopressors and Inotropes for Patients in Shock.Journal of Intensive Care Medicine 2024 April 14
Diagnosis and Management of Cardiac Sarcoidosis: A Scientific Statement From the American Heart Association.Circulation 2024 April 19
Essential thrombocythaemia: A contemporary approach with new drugs on the horizon.British Journal of Haematology 2024 April 9
Get seemless 1-tap access through your institution/university
For the best experience, use the Read mobile app
All material on this website is protected by copyright, Copyright © 1994-2024 by WebMD LLC.
This website also contains material copyrighted by 3rd parties.
By using this service, you agree to our terms of use and privacy policy.
Your Privacy Choices
You can now claim free CME credits for this literature searchClaim now
Get seemless 1-tap access through your institution/university
For the best experience, use the Read mobile app