More Data on the New Quality-Cost Imperative

Hospitals are now strongly charged with showing value. All hospitals must decrease costs and increase quality. But there has always been that nagging argument that the hospital who operates efficiently and gets patients out quickly is really costing us more because of readmissions and follow up care. It has felt good to say that the higher cost hospitals with longer lengths of stay actually do a more thorough job up front which is better for the patient and cheaper for the system overall. This sounds good but it just isn't true.

A recent study conducted on Medicare patients from over 3,000 hospitals in 2006 showed no evidence to support the higher cost hospitals in terms of outcome. The study was limited to congestive heart failure (CHF) and pneumonia patients but these are representative of many Medicare admissions. The study looked at process quality of care, 30-day mortality rates, readmission rates, and six month cost of inpatient care. Here's what they found:

-The cost difference between hospitals was huge. For CHF the range was $1,522 to $18,926. For pneumonia the range was $1,897 to $15,829. It also showed that hospitals that were the highest in 2006 had been that way for the two years previous to this.
-For CHF the quality of care scores for the costliest hospitals were slightly better than the lowest cost hospitals. But for pneumonia, the opposite was true. The low cost hospitals actually beat out the high cost hospitals.
-For CHF patients, the risk of readmission was slightly higher in low cost hospitals while there was negligible difference for pneumonia patients. Even so, the six month inpatient care cost was substantially less for low cost hospitals ($12,715 vs. $18,411 for CHF; $10,143 vs. $15,138 for pneumonia)

High cost hospitals can no longer stand behind the myth that more expensive care is better care. In most cases it is just less efficient. The call to reduce healthcare costs does not have to be seen as a threat or a mandate to sacrifice the quality of care we provide. It is an opportunity to ensure that we are providing the most effective and efficient care we can.

Quality first and finances follow.

More on this later.

Mark Brodeur