USA Today Examines Recent Increase in U.S. Hospital Construction
USA Today on Tuesday examined how the U.S. is "in the middle of the biggest hospital-construction boom" in more than 50 years, a trend that likely will increase use of "high-tech medicine and add fuel to rising health care costs." The hospital industry has spent almost $100 billion in inflation-adjusted dollars in the past five years on new facilities, a 47% increase from the previous five years, with spending likely to reach a record $23.7 billion in 2005, according to the Census Bureau.
According to USA Today, the "money is being spent on more luxurious buildings packed with advanced equipment," with a focus on profitable treatments, such as heart surgery and neonatal care, that are reimbursed at higher rates by private health insurers and Medicare (Cauchon/Appleby , USA Today, 1/3).
Hospital profit and revenue per patient visit have increased in recent years. However, the number of hospital beds has deceased as the number of facilities and occupancy rates have increased (Cauchon/Appleby , USA Today, 1/3). Hospital capacity decreased by 18,000 beds to 808,000 beds between 2001 and 2004.
Rick Wade, senior vice president of the American Hospital Association, said that he expects the hospital-construction boom to continue until 2010.
Some experts have raised concerns that the trend will lead to increased health care costs without improvements in patient survival rates and will increase health care disparities for lower-income patients.
John Wennberg, director of the Center for the Evaluative Clinical Sciences at Dartmouth Medical School, said, "These hospitals are loaded with technology to intensively treat chronically ill patients right up to death. We know from research that does not improve outcomes, but it does drive up costs" (Cauchon/Appleby , USA Today, 1/3).
In addition, hospitals have begun to move from inner cities to the suburbs, a trend that "threatens to reduce medical care for the poor," USA Today reports.
Daniel Evans, CEO of Clarian Health Partners, said that new hospitals will increase competition and help limit increases in health care costs.
William Corley, CEO of Community Health Network, said, "If this were a free market, competition absolutely would reduce costs. Health care doesn't work that way. The truth is, we make money on certain kinds of patients and lose money on others" (Cauchon/Appleby , USA Today, 1/3).