Back to National Health Expenditure Trends, 1975 to 2019

  • Hospitals account for the largest share of total health spending by the public sector, at a forecast 34.1% in 2019.

  • As public facilities, hospitals receive a given amount of funding and deliver as much health care as they can with that money. During periods of fiscal restraint, hospital budgets grow more slowly. 

  • Hospitals have responded by changing how they deliver care. More and more, people who were once treated in hospital are being treated as outpatients, leading to a large overall increase in ambulatory and community visits, and to only modest growth in inpatient activity.

  • Compensation is a significant cost driver, accounting for more than 60% of hospital budgets.

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  • Average annual growth in hospital expenses between 2005–2006 and 2011–2012 was 5.4%.
  • Annual growth dropped to 3.7% in 2012–2013, to 3.0% in 2013–2014 (where it remained in 2014–2015), to 2.5% in 2015–2016 and to 1.9% in 2016–2017; it increased to 3.5% in 2017–2018.

Back to National Health Expenditure Trends, 1975 to 2019