Today’s Managing Health Care Costs Number is $2698
Researchers from the Harvard School of Public Health report in the September issue of Health Affairs that Medicare saves money when certain surgical procedures are performed in the highest quality hospitals compared to the lowest quality hospitals. That’s a big deal – it means that there is no “tradeoff” necessary where we must pay more for better quality!
The researchers evaluated hospitals for care of six different surgical episodes (cardiac bypass, lung lobectomy, endovascular aortic aneurism repair, colectomy and hip replacement.) They top hospitals were in the lowest quartile for risk adjusted 30 day mortality and in the top quartile for patient experience by survey, and the bottom hospitals were those with highest rate of 30 day mortality with lowest scores on the patient experience surveys. The researchers also found that others measures of surgical quality were well correlated with the mortality measure.
Medicare spent $2698 less in the high quality hospitals compared to the low quality hospitals!
The majority of the savings were from decreased postacute care (60%) and prevented readmissions (20%) –validating the idea that high quality hospitals save dollars by preventing complications. Outpatient care costs were slightly higher. The differences were statistically significant for hip replacement and colectomy – and did not reach statistical significance for the other procedures, which have lower volume.
Unfortunately, this data is not relevant to commercial health plans, those which serve employed populations. Medicare sets prices, and the prices at (often high quality) academic medical centers are only a small amount more than prices at lesser nonacademic institutions. Commercial insurers must negotiation prices with each hospital, and those high quality academic institutions often have huge leverage in contracting talks, and can have dramatically higher rates. So it’s quite likely that the savings of 8.7% would be washed away by rates that were higher by substantially more.
We should still preferentially send patients to the best hospitals - the ones with lowest surgical complication rate and best patient experience. That movement will likely force other hospitals to improve their quality and service, too.
But this study's promise of savings from this approach is only relevant for Medicare which sets prices.
EmoticonEmoticon