Study: Health care System Costs Drive Consumer Costs

August 15, 2005 ( - A new study conducted by Interactive Data Corp. (IDC) and Kronos Incorporated shows 85% of hospital executives believe if hospitals better addressed their controllable expenses it would alleviate the rise in health care costs.

The study found that 30% of health care executives allocate more than 20% of their budget to agency costs to fill nursing and other essential positions, according to a Kronos press release. The company says more than 15% of the $1.7 trillion in health care spending goes to paying the salaries and benefits of hospital workers.

But the study found that consumers are concerned that controlling labor costs would mean a decrease in health care quality. Only 20% of consumers believe the outlook for controlling US health care costs while maintaining health care quality is very favorable or favorable, compared to 55% of hospital executives. But those in health care believing managing workflow processes will allow staff to be able to focus more on the patient.

Hospital health care executives surveyed in the study cite labor productivity, a shortage of qualified nurses, and labor costs as three key controllable expenses for health care organizations. Their most common response to the question of how to solve today’s health care crisis was to invest in workforce management solutions.

“Reducing consumer health care costs is a lofty goal, but stabilizing these costs is achievable. Similar to taxes, when health care costs are stabilized, consumers benefit,” said Charlie DeWitt, senior director at Kronos Incorporated, in the news release.

The “Curing a Sick System” study surveyed 1,100 US consumers and 200 US hospital and health care financial executives to gauge their attitudes and perceptions on the health care system. Additional information on the study can be found here .

More information about Kronos Incorporated, a workforce management company, can be found at .