September 23, 2025

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How do hospital stays shape Washington’s health care spending?

Hospital care is some of the most critical — and costly — care that Washington residents use. This is especially true for care that requires an overnight or extended stay in the hospital, often referred to as inpatient care. 

An analysis by Washington’s Health Care Cost Transparency Board (Cost Board) found that spending on inpatient hospital care accounted for nearly 20% of per member spending in the commercial market.  

Compared to other spending categories, inpatient has grown slowly in recent years. But we pay a lot for these services. And new research suggests some of these costs in Washington are avoidable.

Data source: Cost Board data call

What’s behind this high spending?

With better access to primary care, many patients could address their health issues in a more convenient and less stressful outpatient setting. Regular checkups help a lot in managing long-lasting, or chronic, medical problems. 

A recent analysis by the Institute for Health Metrics and Evaluation looked at how much these conditions drive overall inpatient spending. For example, type 2 diabetes alone accounted for $250 million of overall inpatient spending in 2022. Chronic lung diseases accounted for $150 million.²

These possibly preventable inpatient stays were more common in rural areas than urban. That's true even after weighing how common these health issues are.

Why it matters

Hospital bills are a major source of debt. Three in four adults who have medical debt owe money to a hospital. For families below the federal poverty level, even more adults with medical debt have hospital debt.³

What can our state do about it? 

Recent studies show that many costly inpatient services could be avoided with preventive and primary care. Washington state must continue to support access to and use of primary and preventive care, especially in rural and lower-income areas. 

The Cost Board’s 2024 annual report recommended that the Legislature increase use of primary care. They also suggested ways to increase Medicaid reimbursement rates and overall spending on primary care.

Look for updates to these recommendations in the 2025 annual report, coming later this year.

Our sources

1. Health care spending growth in Washington, 2019–2022 
2. Analytic Support Initiative final presentation to Cost Board
3. Most adults with past-due medical debt owe money to hospitals