The costs to provide health care are rising at the same time advances in medicine, an aging population and rising burden of chronic disease are increasing demand for care, according to a recent report from the American Hospital Association.

Advances in care have allowed patients to live longer and healthier, with a better quality of life, the report notes. For example, medical advances are responsible for 70 percent of the improvement in survival rates for heart-attack patients and two-thirds of the reduction in mortality for those suffering from cancer. Less invasive surgery also means patients can be discharged sooner and will recover faster, missing less time from work. However, these advances lead to higher standards of care and increased utilization, which can drive up costs.

Our older, sicker and growing population also contributes to the rising cost of care. As people age, they experience more health problems and, consequently, consume more health care services. An estimated 133 million Americans suffer from at least one chronic condition, and some experts estimate that the combination of increases in chronic disease and technologies to treat them account for nearly two-thirds of spending growth over the past few decades.

In addition, increased demand for care means hospitals need more employees. Wages and benefits for caregivers and other staff represent 60 percent of a hospital's budget and are growing more rapidly for hospitals than for other service fields because hospitals seek highly-trained nurses and other specialized workers.

In the face of such growth, hospitals are striving to reduce costs while improving care; for example, sending case managers to homes of patients with congestive heart failure to provide customized home health and education has led to a significant reduction in readmissions. Efforts like these that tackle both health improvements and cost reductions are going to be critical to produce long-term cost savings. It's no longer enough just to cut costs; we truly have to rethink how we do business.

For more on the report, visit and click on "Research and Trends."

Penny Brooke ( is COG chair and a trustee of Intermountain Health Care Central Urban Region in Salt Lake City.