Medical Expenditure Panel Survey Agency for Healthcare 

Research and Quality

STATISTICAL BRIEF #164 

March 2007 

Expenses for Hospital Inpatient Stays, 

2004 Highlights 

 In 2004, expenses for 

hospital inpatient stays 

accounted for nearly onethird of all health care 

expenses for the U.S. 

civilian noninstitutionalized

population. These expenses 

were paid primarily by 

private insurance plans 

and Medicare. 

 The average expenditure 

for a hospital stay in 2004 

was $10,030 while the 

median per stay expenditure was $5,863.

 While total expenses for 

a hospital stay increased 

with length of stay, the 

average per diem generally 

decreased as the length of 

stay increased. 

 On average, hospital stays 

involving surgery were 

nearly twice as expensive 

as other stays. 

Steven R. Machlin, MS and Kelly Carper, MEd 

Introduction 

Though only a relatively small proportion of the population has an 

inpatient stay in a given year, expenditures for hospitalization 

account for nearly one-third of all medical expenses. This Statistical 

Brief presents data from the Household Component of the Medical 

Expenditure Panel Survey (MEPS-HC) on payments for hospital 

inpatient stays among persons in the U.S. civilian noninstitutionalized population in 2004. Descriptive data on aggregate expenses, 

payment sources, variations by age and gender, as well as information on expenses per stay and per diem, are presented. All 

differences between estimates noted in the text are statistically 

significant at the 0.05 level or better. 

Findings 

Sources of payment 

In 2004, hospital inpatient stays accounted for nearly one-third of 

total health care expenses for the U.S. civilian noninstitutionalized 

population (figure 1). Private insurance (43.7 percent) and Medicare 

(38.8 percent) paid for the overwhelming majority of hospital 

inpatient expenses. Out-of-pocket payments by individuals and 

families comprised only 2.2 percent of payments for hospital 

inpatient care. 

Variations in likelihood of expenses 

Overall, 7.5 percent of the civilian noninstitutionalized population (about 22.1 million persons) had 

expenses for an inpatient hospital stay in 2004 (figure 2). This percentage increased substantially with 

age for both males and females, ranging from only 2.5 percent for children under 18 to about one-fifth of 

persons age 65 and over. Females age 18–44 were substantially more likely to have inpatient expenses 

than their male counterparts (10.0 versus 2.6 percent). A large portion of this differential is attributable to 

hospitalizations for childbirth. 

Expenses per stay 

In 2004, the average total payment from all sources (private insurance, Medicare, Medicaid, out-of-pocket 

payments, and other miscellaneous sources) for a hospital inpatient stay was $10,030 (figure 3). 

However, there was substantial variation across stays in hospital inpatient expenses. For example, 

expenses for about 10 percent of stays were less than $1,348 (10th percentile) while, at the other 

extreme, expenses for the top 10 percent of stays were greater than $20,857 (90th percentile). The 

highest expenditure visits had a disproportionate impact on the average. Consequently, the median 

expense for a hospital stay of $5,863 was substantially lower than the mean expense ($10,030). 
Per diem expenses 

Overall, the average expense per night for a hospitalization in 2004 was about $3,000 while the median 

per diem was about $1,800 (figure 4). While total expenses for a hospital stay increased with length of 

stay, the average per diem generally decreased as the length of stay increased. For example, the 

average per diem expense was $5,180 for one night stays (about 23 percent of stays) versus $1,723 for 

stays of five nights or longer (about 31 percent of stays). Similarly, the median per diem expense 

decreased from $3,145 for one night stays to $1,153 for stays of five nights or longer. 

Stays involving surgery 

Hospital stays during which a surgical procedure was performed (about one-third of inpatient discharges 

in 2004) tended to be more expensive than other hospitalizations (figure 5). In 2004, the average expense 

per stay was $14,729 for those involving surgery—nearly twice as high as the average for other hospital 

stays ($7,678). Similarly, the average expense per diem was more than twice as large for stays involving 

surgery ($5,059) than those without surgery ($1,954). 

Data Source 

The estimates in this Statistical Brief are based upon data from the MEPS 2004 Full Year Consolidated 

File (HC-089) and Hospital Inpatient Stays File (HC-085D). 

Definitions/Methodology 

Expenses (also referred to as expenditures or payments) 

Payments from all sources for hospital inpatient stays reported by respondents in the MEPS-HC. Sources 

include direct payments from individuals, private insurance, Medicare, Medicaid, Workers’ Compensation, 

and miscellaneous other sources. Expenditures include those for both facility and separately billed 

physicians’ services and expenses for emergency room services that immediately preceded a hospital 

stay are typically included. A negligible proportion of inpatient stays had no expenses associated with the 

stay (i.e., no payments made). 

Per diem 

Per diem expenses were computed for each stay by dividing the total expenses for the stay by the 

number of nights in the hospital. The number of nights was considered to be one for the small proportion 

of stays with identical admission and discharge dates reported (i.e., zero night stays). 

About MEPS-HC 

MEPS-HC is a nationally representative longitudinal survey that collects detailed information on health 

care utilization and expenditures, health insurance, and health status, as well as a wide variety of social, 

demographic, and economic characteristics for the civilian noninstitutionalized population. It is cosponsored by the Agency for Healthcare Research and Quality and the National Center for Health Statistics. 

For more information about MEPS, call the MEPS information coordinator at AHRQ (301-427-1656) or 

visit the MEPS Web site at http://www.meps.ahrq.gov/. 

References 

For a detailed description of the MEPS survey design, sample design, and methods used to minimize 

sources of nonsampling error, see the following publications: 

Cohen, J. Design and Methods of the Medical Expenditure Panel Survey Household Component. MEPS 

Methodology Report No. 1. AHCPR Pub. No. 97-0026. Rockville, Md.: Agency for Health Care Policy and 

Research, 1997. 

Cohen, S. Sample Design of the 1996 Medical Expenditure Panel Survey Household Component. MEPS 

Methodology Report No. 2. AHCPR Pub. No. 97-0027. Rockville, Md.: Agency for Health Care Policy and 

Research, 1997. 

Cohen, S. Design Strategies and Innovations in the Medical Expenditure Panel Survey. Medical Care,

July 2003: 41(7) Supplement: III-5–III-12. 
Suggested Citation 

Machlin, S. R. and Carper, K. Expenses for Inpatient Hospital Stays, 2004. Statistical Brief #164. March 

2007. Agency for Healthcare Research and Quality, Rockville, Md. http://www.meps.ahrq.gov/mepsweb/ 

data_files/publications/st164/stat164.pdf 

∗ ∗ ∗

AHRQ welcomes questions and comments from readers of this publication who are interested in 

obtaining more information about access, cost, use, financing, and quality of health care in the United 

States. We also invite you to tell us how you are using this Statistical Brief and other MEPS data and 

tools and to share suggestions on how MEPS products might be enhanced to further meet your needs. 

Please e-mail us at mepspd@ahrq.gov or send a letter to the address below: 

Steven B. Cohen, PhD, Director 

Center for Financing, Access, and Cost Trends 

Agency for Healthcare Research and Quality 

540 Gaither Road 

Rockville, MD 20850 
Source: Center for Financing, Access, and Cost Trends, AHRQ, Household Component of the Medical Expenditure Panel Survey, 2004

Figure 1. Payments for hospital inpatient stays, 2004

Private insurance: 43.7%

Medicare: 38.8%

Medicaid: 9.6%

Out-of-pocket: 2.2%

Other: 5.7%

All expenses

($963.9 billion)

Inpatient sources

of payment

Ambulatory care

35.6%

Prescribed

medicines

19.8% Other

13.2% Hospital

inpatient:

31.4%

Source: Center for Financing, Access, and Cost Trends, AHRQ, Household Component of the Medical Expenditure Panel Survey, 2004

Figure 2. Percentage of persons with inpatient 

expenses, by age and gender, 2004

7.5

2.5 2.6

6.9

2.6

10.0

8.7

19.6

22.0

0

5

10

15

20

25

<18 18-44 45-64 65+ <18 18-44 45-64 65+

Percent

Overall

Male Female

Statistical Brief #164: Expenses for Hospital Inpatient Stays, 2004 
Source: Center for Financing, Access, and Cost Trends, AHRQ, Household Component of the Medical Expenditure Panel Survey, 2004

Figure 3. Distribution of inpatient expenses per stay, 2004

10,030

1,348

3,277

5,863

10,947

20,857

0

5,000

10,000

15,000

20,000

25,000

 Average 10th

percentile

25th

percentile

50th

percentile

(Median)

75th

percentile

90th

percentile

D

ollars

Source: Center for Financing, Access, and Cost Trends, AHRQ, Household Component of the Medical Expenditure Panel Survey, 2004

Figure 4. Inpatient expenses per diem,

by length of stay, 2004

2,989

5,180

3,168

2,670

2,081

1,723

1,153

1,418

1,886

2,374

3,145

1,802

0

1,000

2,000

3,000

4,000

5,000

6,000

Overall 1 2 3 4 5+

Mean Median

D

ollars

Length of stay (number of nights)

Statistical Brief #164: Expenses for Hospital Inpatient Stays, 2004 
Source: Center for Financing, Access, and Cost Trends, AHRQ, Household Component of the Medical Expenditure Panel Survey, 2004

Figure 5. Average inpatient expenses for stays

with and without surgery, 2004

14,729

5,059

7,678

1,954

0

5,000

10,000

15,000

20,000

Per stay Per diem

Surgery No surgery

D

ollars

Statistical Brief #164: Expenses for Hospital Inpatient Stays, 2004