AHA Responds to Axios Article on Hospital Prices

Comparing hospital prices to drug prices is absurd. And although the article claims to be about prices, the chart actually shows National Health Expenditure (NHE) spending numbers, not prices.

Despite that, hospital spending has grown at a slower rate than drug spending over the time period displayed in the chart. And as a percentage of the NHE, hospital care actually declined from 42.7 percent in 1980 to 34 percent in 2016, compared to retail prescription drug spending, which doubled as a share of total national health expenditures. The NHE data don’t separate drugs used together in a hospital setting out from overall hospital spending, so there is drug spending hidden within the hospital numbers.

As global pharmaceutical giants pocket record profits, one out of every four American hospitals operates in the red. But the gravity of the health care cost problem requires all stakeholders, especially pharmaceutical companies,  to work towards a solution that helps reduce costs for patients.

That's why hospitals and health systems are redesigning their delivery systems and embracing new reimbursement models. They're leveraging technology to treat patients at home and offer specialized care to underserved communities.

Hospital prices have also grown more slowly than drug prices, despite rising input costs. Hospital price growth as measured by the Producer Price Index, has remained under 2 percent for each of the last four years. Even before that, since 2008, hospital prices had an average annual growth rate of 2 percent.

In comparison, the overall price of medical care had an average annual growth rate of 3 percent, while drug prices had a significantly higher average annual growth rate of 5.6 percent for that same time period.