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U.S. Hospitals’ Administrative Expenses Increased Sharply During COVID-19
BACKGROUND: In response to the declining utilization and patient revenue due to the COVID-19 pandemic, the U.S. hospital industry furloughed at least 1.4 million health care workers to contain their clinical-related expenses. However, it remains unclear how hospitals responded by adjusting their adm...
Autores principales: | , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Springer International Publishing
2023
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10035469/ https://www.ncbi.nlm.nih.gov/pubmed/36952083 http://dx.doi.org/10.1007/s11606-023-08158-8 |
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author | Wang, Yang Bai, Ge Anderson, Gerard |
author_facet | Wang, Yang Bai, Ge Anderson, Gerard |
author_sort | Wang, Yang |
collection | PubMed |
description | BACKGROUND: In response to the declining utilization and patient revenue due to the COVID-19 pandemic, the U.S. hospital industry furloughed at least 1.4 million health care workers to contain their clinical-related expenses. However, it remains unclear how hospitals responded by adjusting their administrative expenses, which account for more than a quarter of U.S. hospitals’ spending, a proportion substantially higher than that of other industrialized countries. Examining changes in hospitals’ administrative expenses during the COVID-19 pandemic is important for understanding hospitals’ cost-containment behaviors under operational shocks during a pandemic. OBJECTIVE: To assess changes in hospitals’ administrative expenses and clinical expenses during the COVID-19 pandemic in 2020. DESIGN: Time-series observational study. PARTICIPANTS: 1420 Medicare-certified general acute-care hospitals with fiscal years starting in January and continuously operating during 2016–2020. MAIN MEASURES: Hospitals’ annual administrative expenses and clinical expenses. KEY RESULTS: Hospitals’ median administrative and clinical expenses both increased consistently around 4% each year from 2016 to 2019. From 2019 to 2020, the median administrative expenses grew by 6.2% while the median clinical expenses grew by 0.6%. The interrupted time-series regression estimated an additional 6.4% (95% CI, 4.5 to 8.2%) increase in administrative expenses in 2020, relative to the pre-COVID annual increase of 3.9% (95% CI, 3.3 to 4.4%), while an additional increase in clinical expenses in 2020 (0.5%; 95% CI, −0.3 to 1.4%) did not differ from the pre-COVID annual increase of 3.7% (95% CI, 3.5 to 4%). Stratified analysis showed hospitals with larger utilization volume, located in states with lower COVID-19 burden, or situated in counties with higher median household income experienced larger increase in administrative expenses in 2020. CONCLUSIONS: In 2020, administrative expenses grew much faster than clinical expenses, resulting in a larger share of hospital financial resources allocated to administrative activities. Higher administrative expenses might reflect hospitals’ operational effort in response to the pandemic or inefficient cost management. SUPPLEMENTARY INFORMATION: The online version contains supplementary material available at 10.1007/s11606-023-08158-8. |
format | Online Article Text |
id | pubmed-10035469 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2023 |
publisher | Springer International Publishing |
record_format | MEDLINE/PubMed |
spelling | pubmed-100354692023-03-23 U.S. Hospitals’ Administrative Expenses Increased Sharply During COVID-19 Wang, Yang Bai, Ge Anderson, Gerard J Gen Intern Med Original Research BACKGROUND: In response to the declining utilization and patient revenue due to the COVID-19 pandemic, the U.S. hospital industry furloughed at least 1.4 million health care workers to contain their clinical-related expenses. However, it remains unclear how hospitals responded by adjusting their administrative expenses, which account for more than a quarter of U.S. hospitals’ spending, a proportion substantially higher than that of other industrialized countries. Examining changes in hospitals’ administrative expenses during the COVID-19 pandemic is important for understanding hospitals’ cost-containment behaviors under operational shocks during a pandemic. OBJECTIVE: To assess changes in hospitals’ administrative expenses and clinical expenses during the COVID-19 pandemic in 2020. DESIGN: Time-series observational study. PARTICIPANTS: 1420 Medicare-certified general acute-care hospitals with fiscal years starting in January and continuously operating during 2016–2020. MAIN MEASURES: Hospitals’ annual administrative expenses and clinical expenses. KEY RESULTS: Hospitals’ median administrative and clinical expenses both increased consistently around 4% each year from 2016 to 2019. From 2019 to 2020, the median administrative expenses grew by 6.2% while the median clinical expenses grew by 0.6%. The interrupted time-series regression estimated an additional 6.4% (95% CI, 4.5 to 8.2%) increase in administrative expenses in 2020, relative to the pre-COVID annual increase of 3.9% (95% CI, 3.3 to 4.4%), while an additional increase in clinical expenses in 2020 (0.5%; 95% CI, −0.3 to 1.4%) did not differ from the pre-COVID annual increase of 3.7% (95% CI, 3.5 to 4%). Stratified analysis showed hospitals with larger utilization volume, located in states with lower COVID-19 burden, or situated in counties with higher median household income experienced larger increase in administrative expenses in 2020. CONCLUSIONS: In 2020, administrative expenses grew much faster than clinical expenses, resulting in a larger share of hospital financial resources allocated to administrative activities. Higher administrative expenses might reflect hospitals’ operational effort in response to the pandemic or inefficient cost management. SUPPLEMENTARY INFORMATION: The online version contains supplementary material available at 10.1007/s11606-023-08158-8. Springer International Publishing 2023-03-23 2023-06 /pmc/articles/PMC10035469/ /pubmed/36952083 http://dx.doi.org/10.1007/s11606-023-08158-8 Text en © The Author(s), under exclusive licence to Society of General Internal Medicine 2023. Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law. |
spellingShingle | Original Research Wang, Yang Bai, Ge Anderson, Gerard U.S. Hospitals’ Administrative Expenses Increased Sharply During COVID-19 |
title | U.S. Hospitals’ Administrative Expenses Increased Sharply During COVID-19 |
title_full | U.S. Hospitals’ Administrative Expenses Increased Sharply During COVID-19 |
title_fullStr | U.S. Hospitals’ Administrative Expenses Increased Sharply During COVID-19 |
title_full_unstemmed | U.S. Hospitals’ Administrative Expenses Increased Sharply During COVID-19 |
title_short | U.S. Hospitals’ Administrative Expenses Increased Sharply During COVID-19 |
title_sort | u.s. hospitals’ administrative expenses increased sharply during covid-19 |
topic | Original Research |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10035469/ https://www.ncbi.nlm.nih.gov/pubmed/36952083 http://dx.doi.org/10.1007/s11606-023-08158-8 |
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