The annual national hospital bill may reach $1 trillion by 2008. This forecast is brought to you in a new report from the Agency for Healthcare Research and Quality (AHRQ). Hospital charges in 2005 totalled $873 billion in 2005, nearly doubling in ten years.

The hospital bill was covered primarily by three payor segments: Medicare, which paid nearly one-half of the total hospital bill; private insurance, covering nearly one-third; and Medicaid, at 14% of the total.

What are we spending money on in hospitals? Putting aside pregnancy/childbirth and infant care, the top three conditions are heart-related: coronary artery disease ($46 billion), heart attack ($32 billion), and congestive heart failure ($30 billion). Together, these three cardiovascular conditions equated to 12% of hospital charges in 2005.

Despite advances in diagnosis and treatment, cardiovascular disease remains the leading cause of death and disability in the U.S.

Furthermore unless we adopt a national strategy of, say, Dean Ornish’s approach to a heart-healthy lifestyle, heart and related conditions will grow as a component of hospital inpatient admissions. Chest pain, respiratory failure, irregular heart beat, congestive heart failure, and diabetes (often associated with heart complications) are already rising faster than expected as causes for inpatient admissions.

When Americans ponder where health resources are allocated, inpatient hospital care is a key place to target. One way of rationalizing (I didn’t say rationing; I said “rationalizing”) scarce health resources (money, labor, technology) is to pay for what works. The best business book of the year (according to the New York Times and me), is Overtreated by Shannon Brownlee. Listen to Matthew Holt’s podcast with Brownlee here. Brownlee details the pioneering work of Dr. Jack Wennberg and his mission to focus the American health care system on outcomes and evidence.

One way to enable this approach is to have an adequate information technology infrastructure. Note that this week, AHRQ awarded $600,000 to Kaiser Permanente’s Center for Health Research for a study that uses electronic medical records to examine heart disease prevention and management with the objective of improving cardiovascular care in the U.S. KP has one of the nation’s most advanced HIT systems, and they will mine the data to identify heart disease patterns and treatment success stories (e.g., impact of beta blockers on health outcomes).

Health Populi’s Hot Points: When we address the hot issue of containing costs in health care, there will inevitably be groups labeled as “losers.” Hospitals would be one of those groups – if examined in only the short run. The process of implementing evidence-based medicine would in the longer run create more efficient operations with rational approaches to technology adoption. A robust health IT infrastructure – with patient-centered programs to modify and support positive health behaviors – will be one strategy for cost-containment.