Decreasing Hospital Costs While Maintaining Quality: Can It Be Done?

Concerns about the high costs of health care in the United States are not new.¹ Equally well established is the fact that the United States spends vastly more than any other developed country on health care but has poorer outcomes on key health indices such as life expectancy and maternal and infant mortality than countries that spend significantly less.² What is new is the recognition, at the highest level of the government, President Obama, that the expansion of health care coverage to the uninsured is linked to lowering the cost of health care for everyone.³ Controlling hospital costs is central to lowering overall health care costs. Indeed, in 2007, $697 billion was spent on hospital care, accounting for 31% of all health care expenditures.⁴ Moreover, hospital costs are currently growing at a rate of about 7% a year.⁴