Comparison of hospital costs in California, New York, and Canada

Abstract

When the components of health care spending are broken down, hospital spending accounts for the largest portion of the total. This DataWatch compares hospital spending in two U.S. states with spending in two Canadian provinces, to gain better understanding of the recurring differences in hospital spending reported by the two countries. To make the data comparable, the study combines different hospital output measures into a composite measure that is converted into U.S. dollars and applied to data from both countries. In 1987 hospital costs per person were about one-third higher in the United States than in Canada. Results suggest that the higher U.S. costs are due primarily to higher unit costs rather than to differences in output.