Insurance companies' strategy of cracking down on unnecessary hospital stays is unlikely to stop the rise in hospital costs during the '90s, a study released Thursday concludes.
The researchers contend that insurers' efforts produced a significant pause in hospital cost increases during the mid-1980s.But expensive new technology and other costs are driving up hospital prices again, even though people are spending much less time in hospitals.
The total number of patient hospital days fell by 28 percent between 1981 and 1988. During that period, the increase in hospital costs slowed sharply, but then picked up.
Dr. William B. Schwartz, principal author of the study, said large employers and others worried about out-of-control medical costs already have wrung all the important savings they can from hospital admissions.
"Managed care organizations and industry have been burying their heads in the sand, because things looked so good for a couple of years," said Schwartz, a physician and medical economist at Tufts University School of Medicine.
The researchers said hospital costs are likely to go up substantially because of new hospital technology, higher salaries and more patients with AIDS, among other factors.
Dr. Joseph Newhouse of Harvard University said the research "suggests that hospital costs will continue to trend up unless the payment system sends a signal to the medical care system that all new technology won't necessarily be paid for."
The work, based on data from the American Hospital Association and the Health Care Financing Administration, was published in Thursday's New England Journal of Medicine.
The movement toward reducing the time people stay in the hospital began in earnest in the early 1980s, when the Medicare system began reimbursing with flat fees regardless of how long patients stayed in the hospital.
Private insurers have likewise cut back by encouraging more outpatient treatment and reducing hospital stays for childbirth, heart attacks and other care.
"Doctors have been hassled and forced to change the pattern of their practice," said the co-author of the study, Daniel N. Mendelson of the Washington consulting firm Lewin-ICF. "Almost 30 percent of days have been reduced. But as a long-term cost-containment strategy, it won't work, because you can't squeeze out another 30 percent."