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Background  In Spain, hospital expenditure represents the biggest share of overall public healthcare expenditure, the most important welfare system directly run by the Autonomous Communities (ACs). Since 2001, public healthcare expenditure has increased well above the GDP growth, and public hospital expenditure increased at an even faster rate. This paper aims at assessing the evolution of need-adjusted public hospital expenditure at healthcare area level (HCA) and its association with utilisation and ‘price’ factors, identifying the relative contribution of ACs, as the main locus of health policy decisions.    Methods  Ecological study on public hospital expenditure incurred in 198 (HCAs) in 16 Spanish ACs, between 2003 and 2015. Aggregated and annual log-log multilevel models, considering ACs as a cluster, were modelled using administrative data. HCA expenditure was analysed according to differences in population need, utilization and price factors. Standardised coefficients were also estimated, as well as the variance partition coefficients.    Results  Between 2003 and 2015, over 59 million hospital episodes were produced in Spain for an overall expenditure of €384,200 million. Need-adjusted public hospital expenditure, at HCA level, was mainly associated to medical and surgical hospitalizations (standardized coefficients 0.32 and 0.28, respectively). The ACs explained 42% of the variance not explained by HCA utilization and ‘price’ factors.    Conclusions  Utilization, rather than ‘price’ factors, may be explaining the difference in need-adjusted public hospital expenditure at HCA level in Spain. ACs, third-payers in the fully devolved Spanish National Health System, are responsible for a great deal of the variation in hospital expenditure.    Electronic supplementary material  The online version of this article (10.1186/s12913-018-3445-7) contains supplementary material, which is available to authorized users.

Evolution of public hospitals expenditure by healthcare area in the Spanish National Health System: the determinants to pay attention to