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Virginia Mason Medical Center in Seattle, Washington, has been using lean management principles since 2002. By working to eliminate waste, Virginia Mason created more capacity in existing programs and practices so that planned expansions were scrapped, saving significant capital expenses: $1 million for an additional hyperbaric chamber that was no longer needed; $1 to $3 million for endoscopy suites that no longer needed to be relocated; $6 million for new surgery suites that were no longer necessary. Despite a “no-layoff policy,” a key tenet of lean management, staffing trends at Virginia Mason show a decrease in 2003 and 2004, after six years of annual increases. | HEALTH CARE COST INSTITUTE September 2012 www.healthcostinstitute.org Health Care Cost and Utilization Report 2011 Copyright 2012 Health Care Cost Institute Inc. Unless explicitly noted the content of this report is licensed under a Creative Commons Attribution Non-Commercial No Derivatives 3.0 License Health Care Cost and Utilization Report 2011 i Executive Summary The Health Care Cost Institute s HCCI Health Care Cost and Utilization Report 2011 tracks changes in health care prices utilization and spending on people younger than 65 covered by employer-sponsored private health insurance ESI . This report extends HCCI s reporting of cost and utilization. HCCI now has claims for approximately 40 million people covered by ESI compared to 33 million in our 2010 report. In this report HCCI performed completion a process by which actuaries estimate metrics for claims that were incomplete for 2010 or 2011.1 These new data and enhanced methodology resulted in changes to our original 2010 estimates. Therefore the figures presented in the Health Care Cost and Utilization Report 2010 have been superseded by this report.2 Spending Rose In 2011 per capita and total spending on health care accelerated. Between 2010 and 2011 estimated per capita expenditure for claims filed under ESI rose 4.6 percent from 4 349 to 4 547. In comparison spending growth was 3.8 percent for 2009 2010. By age group spending rose the fastest for children reaching 2 347 in 2011 a 7.7 percent increase over 2010. By region the Northeast had both the highest dollars spent per capita 4 659 and the highest growth in spending 5.3 . For 2010 HCCI estimated total spending to have been 680.7 billion. For 2011 spending grew to 709.2 billion. Using the current population survey CPS HCCI estimated that 156.5 million people had ESI in 2010 compared with 156.0 million people in 2011 a 0.3 percent decline.3 The 4.6 percent growth in per capita spending when coupled with the 0.3 percent decline in the ESI population .