Dataset Information

U.S. Hospitals' Administrative Expenses Increased Sharply During COVID-19.

ABSTRACT:

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.

SUBMITTER: Wang Y

PROVIDER: S-EPMC10035469 | biostudies-literature | 2023 Jun

REPOSITORIES: biostudies-literature

ACCESS DATA

Publications

U.S. Hospitals' Administrative Expenses Increased Sharply During COVID-19.

Wang Yang Y Bai Ge G Anderson Gerard G

Journal of general internal medicine 20230323 8

<h4>Background</h4>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 hosp ...[more]

PMID: 36952083

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Dataset Information

U.S. Hospitals' Administrative Expenses Increased Sharply During COVID-19.

Background

Objective

Design

Participants

Main measures

Key results

Conclusions

Publications

U.S. Hospitals' Administrative Expenses Increased Sharply During COVID-19.

Similar Datasets

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