The Biggest Expenses for Hospitals

Running a hospital is not inexpensive. Every facility has to deal with big costs for supplies, equipment, and employees. You may be surprised to find out just how much your local physician’s office has to spend to keep running. Some of the highest costs for medical facilities are the ones of which patients are the least aware.

Research and Teaching

Many hospitals, especially those affiliated with universities, serve as teaching or research facilities. These hospitals are needed to train new medical personnel and research cutting-edge medical treatments. However, they are some of the most expensive to maintain. Teaching and research hospitals rely on grants, often used to cover experimental procedures and service improvements. Grants can be difficult to obtain and some must be renewed on a yearly basis. If hospitals lose grant funding, they cannot continue their work, so they put a lot of energy into using grants wisely.

Technology

Technology is one of the most needed, and most expensive, parts of the medical field. Between 2006 and 2008, Massachusetts’ hospitals spent $12 million on medical imaging alone. As new technologies are developed, hospitals scramble to get them and improve patient care. Expensive technological equipment includes CT scan and MRI machines, x-ray machines, 3-D printers, and the computers used to maintain patient databases.

Liability Coverage

No one likes to think of their doctor or hospital making a mistake, but it does happen. When it does, the hospital community must cover its bases with liability insurance. Insurance accounted for about 2% of hospital expenditures in 2008. This number tends to increase as more insurance policies become available, or as medical personnel become aware of the need for different types of liability insurance.

Supplies

The little things you receive in a hospital – fresh linens, nutritious food, and medications – are responsible for many expenses. Altogether, supplies and capital expenses make up about 15% of expenses for the average hospital. This percentage increases when hospitals undertake construction or other large projects.

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