While hospitals account for one-third of the health care dollar, spending on hospital care has grown more slowly than spending on other health care services, according to a new American Hospital Association (AHA) report on the sources of growth in spending on patient care in hospitals. Spending for hospital care rose by 4.5 percent between 2007 and 2008, far less than health insurance premiums. Based on data from the Centers for Medicare & Medicaid Services and the AHA Annual Survey, the report shows that rising costs to hospitals for the goods and services purchased to provide care accounted for 64 percent of overall growth in spending on hospital care from 2004 to 2008, while rising demand for care accounted for about 34 percent.

The U.S. Senate voted 62-36 to pass the American Workers, State, and Business Relief Act of 2010 (H.R. 4213), which includes several critical provisions for hospitals. The bill now goes to the House for consideration. The bill would extend through December 31, 2010, the American Recovery and Reinvestment Act’s COBRA benefit subsidy, and extends for six months the temporary increase in states’ Federal Medical Assistance Percentage. It also would delay a 21 percent Medicare payment cut for physicians until September 30, extend several rural health programs through 2010, and ensure that physicians who practice in hospital-owned outpatient centers and clinics qualify for the ARRA’s health information technology incentives.

The Centers for Medicare & Medicaid Services (CMS) proposes too high a bar for achieving “meaningful use” of electronic health records (EHR) and an unrealistically short transition time for adopting EHR systems, the American Hospital Association (AHA) stated in comments about the agency’s proposed definition of EHR meaningful use. The AHA’s letter also recommends expanding eligibility for EHR incentive payments to more physicians who work in hospitals and to make separate incentive payments to hospitals that share the same provider number; and suggests that instead of requiring hospitals to meet all 23 of its proposed requirements by 2011 to be deemed a meaningful user of EHR, allowing hospitals to meet 25 percent of the objectives by next year.