Healthcare News & Insights

Most expensive conditions to treat in hospitals: How to respond

In the wake of healthcare reform, healthcare costs are still being closely scrutinized – especially the price tag for hospital stays. A new report sheds light on which conditions and illnesses are the most expensive for hospitals to treat. 

Stethoscope on MoneyAs part of its Healthcare Cost and Utilization Project, the Agency for Healthcare Research and Quality (AHRQ) compiled a list of the top conditions that cost facilities big bucks to treat on an inpatient basis.

According to the research, while healthcare costs in many areas have been stable over the past seven years, hospital care expenses tend to increase more often than not from year to year. In fact, the cost of inpatient hospital care is the biggest portion of healthcare spending in the country.

With that in mind, hospitals need to know which conditions are the priciest to treat before they try to reduce their spending.

Most expensive conditions

In its report, the AHRQ breaks down the most expensive conditions across all hospital stays.

Overall, the most expensive illness for hospitals to treat was sepsis. The condition accounted for over $23.6 billion worth of hospital costs, representing 6.2% of national healthcare spending – despite only being the diagnosis for 3.6% of hospital stays.

Rounding out the top five were:

  • osteoarthritis, which cost hospitals $16.5 billion to treat
  • live birth, which cost hospitals $13.3 billion
  • complication of device, implant or graft, which cost hospitals $12.4 billion to treat, and
  • heart attack, which cost hospitals $12.1 billion to treat.

These five conditions alone contributed to 20.5% of total hospital costs.

And when looking at the top 20 most expensive conditions (which includes illnesses such as congestive heart failure, pneumonia, mood disorders and diabetes with complications), the cost of treating them adds up to almost half of total hospital spending (47.7%).

Data by payor

Besides looking at overall hospital costs, the AHRQ report also broke them down by payor. The agency used four “payor groups:” Medicare, Medicaid, private insurance and uninsured. Sepsis ranked in the top four most expensive conditions for all payor groups.

Several other conditions ranked in the top 20 most expensive conditions to treat on all four lists. They are:

  • heart attack
  • congestive heart failure
  • complication of device, implant or graft
  • pneumonia
  • respiratory failure, and
  • acute cerebrovascular disease.

Also, in three out of four payor groups (Medicare, Medicaid and private insurance), complications of surgical procedures or medical care ranked highly on each list.

Lowering cost of care

These lists of costly conditions can give hospitals excellent guidance as to where to place their focus when they’re looking at providing high-value care at lower costs. Many elements can make the price tag climb for treating these conditions, including expensive drugs and procedures, so it’s important to find out if there are any areas where costs can be lowered.

Sepsis is an especially expensive condition that hospitals should evaluate, since it ranks so highly for multiple payors. Not only is it deadly to patients, it’s also costly to treat the ones who do survive. So it’s key for facilities to detect the condition as early as possible to avoid the priciest late-stage interventions – and to take a hard look at its prevention efforts to see if they’re effective enough.

With cost transparency becoming so common in health care, hospitals need to prove they’re doing the best they can to root out costly inefficiencies while treating patients.

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