Hospital Costs in Perspective

Rising hospital costs have caused concern to the public, Government, and Members of Parliament ever since the start of the National Health Service. They are at present taxing the minds of those responsible for administering the hospitals as they try to contain hospital expenditure within the limits of funds made available by the Government. Nevertheless the problems are not confined to Great Britain nor to the National Health Service because rapidly rising hospital costs have been general throughout the world since the end of the second World War. In spite of the widespread distribution of the problem there has been little sustained attempt to see rising costs in perspective, and understanding of the factors which have brought about the rise has not been conspicuous. The purpose of this paper is to present the facts, to put them into perspective and to give some understanding of the underlying causes. It makes no attempt to analyse in detail the elements of cost in individual hospitals as is done in the Hospital Costing Returns by the Ministry of Health, nor to examine critically the methods of estimating and defining expenditure on hospitals as has been done by the World Health Organisation—rather it aims to present a picture in broad outline.