JAMA: Lower cost hospitals have similar patient outcomes as higher cost counterparts

By | November 15, 2019

Dive Brief:

  • A new study in JAMA Network Open finds that Medicare patients with heart failure or pneumonia likely had more costs associated with the hospital where they were receiving treatment than their acuity.
  • The researchers randomly studied 1.22 million patients discharged between July 2013 and June 2016, and further isolated them to 1,615 patient pairs who were admitted twice for the same conditions to hospitals with high and low payment profiles.  The median payments up to 30 days after admission when divided by upper and lower quartile ranged from $ 13,789 to $ 16,651 for heart failure and $ 13,606 to $ 18,382 for pneumonia.
  • Spending on heart failure patients treated at lower-cost hospitals was $ 2,118 lower than at higher-cost hospitals. Spending on pneumonia patients was $ 2,907 less at the low-cost hospitals than the high-cost hospitals. Mortality rates and other outcomes were similar for both groups.

Dive Insight:

There has been a long-held assumption in the hospital sector that case acuity, socioeconomic stratification and many other factors greatly affect overall healthcare costs. However, a new study by researchers from Yale University, Harvard University and Yale-New Haven Hospital found lower cost hospitals — which tended to be smaller and non-teaching facilities than their high-cost counterparts — treated the same patients at less cost with virtually the same outcomes.

“We found marked differences in payment depending on which hospital the patient received care at. No evidence was found that lower-payment hospitals had higher mortality rates,” the study concluded.

There were some variations in care. According to the study, heart failure patients were less likely to receive percutaneous coronary intervention or an implantable cardiac defibrillator.

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Yet the study’s authors suggested heart failure patients actually had lower readmission rates at the lower cost hospitals, which in turn may have helped keep those costs even lower. Heart failure patients at the lower cost facilities also had lower overall hospitalization and post-acute care costs. Pneumonia patients also had significantly lower hospitalization costs at the low-cost facilities.

As a result, the authors observed that the “lower-cost hospitals may represent achievable benchmarks and identify opportunities for reducing cost.” And while they concluded “research is needed to identify and address cultural and financial factors in resource use that might affect these different payment profiles,” they also noted “the idea that lower costs are achievable may provide the impetus to investigate new strategies rather than simply resist the possibility that efficiencies can be achieved.”

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