Published December 1978 — Download PDF of the original newspaper column
Byrd's-Eye View By U.S. Senator Robert C. Byrd The High Cost of Hospital Care Ten years ago, the average cost of a day in the hospital was $55 and the average cost of a hospital stay of 8.4 days was $469. Today, the average daily rate is $200 and the average stay of 7.7 days costs $1,543. At the current rate of increase, in five years hospital costs will rise to an average of $373 a day and $2,872 for an average stay of a little more than a week. Last year, Americans spent over $160 billion for health care. Hospital costs amounted to 40 percent of the total health care bill and have been rising at a rate of about 15 percent a year. Hospitals note that the prices they pay for goods and services, employees' wages, food and fuel, medical malpractice insurance, and equipment costs, have all increased. Hospital administrators say they cannot provide quality health care on shoestring budgets. But, critics say that many hospitals have become inefficient, causing costs to rise unnecessarily, because there is no competition among them and no incentive to control costs. A large part of the inflation is attributed to the fact that hospitals are paid for bills they submit to insurance companies or federal or state programs, such as Medicare or Medicaid. More than 90 percent of all hospital costs are paid for by someone other than the patient. There is no incentive to cut costs when bills, no matter how large, will be reimbursed by a third party. Other factors that fuel hospital inflation include: the labor-intensive nature of the industry, overabundance of empty beds costing about $20,000 per bed to maintain, and duplicate equipment and services in the same city or area. President Carter has proposed mandatory controls limiting hospital cost increases to 9 percent a year, with smaller increases in subsequent years until a new hospital payment system can be implemented. The legislation would also address the bed-surplus and bed-shortage problem and encourage sharing of expensive equipment among nearby hospitals. The hospital industry, protesting mandatory controls, has implemented a voluntary plan to reduce costs by two percent each year. The success of the plan has yet to be determined. Congress, this fall, considered a compromise bill that would impose mandatory controls to contain hospital costs if the hospitals' voluntary efforts failed. The Senate passed the bill, but the House failed to act. Hospital cost containment, as an important part of the nation's battle against inflation, is likely to remain a high priority of the 96th Congress.