BlueCross BlueShield Association Study Finds Hospital Costs Increasing in California
California's hospital costs have increased at nearly twice the national rate in recent years, due in large part to the state's "acute" nursing shortage, the cost of new technology and hospital mergers, according to a BlueCross BlueShield Association study released Wednesday, the Los Angeles Times reports. The study found that inpatient costs in California increased 11.3% each year between 1998 and 2001 and that California led the nation in the percentage of patients with the most costly discharges. According to the report, which was conducted for BCBSA by outside consultants and experts in academia, hospital mergers were as "significant a factor" in rising inpatient costs as technology, the Times reports. Supporting findings from some other recent studies, the report said that hospital expenses have now passed prescription drugs as the main contributor to increasing health care costs. University of California-Los Angeles professor William Pierskalla said several factors have contributed to that shift, including "mounting pressure" on drug companies to reduce prices and managed care serving "merely as a pass-through feature on the health-care landscape, acquiescing to demands for higher hospital pay and passing those costs on to consumers and employers," the Times reports. Jim Lott, executive vice president of the Healthcare Association of Southern California, said that the report does not put the findings in the "correct framework," adding that in California, insurance companies' payments to hospitals is still lower compared with other states. According to Lott, "fat earnings" at managed-care companies -- like Blue Cross of California parent WellPoint Health Networks -- are the "big driver" of health care costs, the Times reports (White, Los Angeles Times, 11/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.