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David H. Berger, MD

Arch Surg. 2006;141:70.

	Since this article does not have an abstract, we have provided the first 150 words of the full text and any section headings.

The United States spends more on health care than any other industrialized country. Health care expenditures in 2000 totaled $1.3 trillion, which represented 13.2% of the US gross domestic product.¹ Health care expenditures in the United States are projected to reach $2.8 trillion and represent 17% of the gross domestic product by 2011. Hospital inpatient expenditures compose about 34.2% of the growth of total health care expenditures, outstripping pharmaceuticals and outpatient spending as the most important contributor to health care cost increases.²

Reimbursements to hospitals from the federal government and private insurers have not kept up with increased costs. As a result, hospitals live on razor-thin operating margins. Unexpected surges in demand or cuts in payments can have dramatic effects on fiscal solvency. During the late 1990s, a 2-point decrease—from 5% to 3%—in the total profit margin of US hospitals resulted in the number of hospitals . . . [Full Text of this Article]

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