Hospitals can deliver low cost, high quality care

Originally published in MedPage Today

by John Gever, MedPage Today Senior Editor

Many hospitals that spend relatively little per patient deliver good-quality care, researchers said.

Medicare data indicated that hospitals in the highest quartile of per-patient cost for initial treatment of pneumonia or congestive heart failure (CHF) did not have markedly lower readmission or risk-adjusted mortality rates than hospitals in the lowest expense quartile, according to Lena Chen, MD, of the University of Michigan in Ann Arbor, and colleagues.

Furthermore, total six-month costs for inpatient care remained significantly lower for patients seen initially in low-cost versus high-cost hospitals, Chen and colleagues reported in the Feb. 22 issue of the Archives of Internal Medicine.

“Most evidence did not support the ‘penny wise and pound foolish’ hypothesis that low-cost hospitals discharge patients earlier but have higher readmission rates and greater downstream inpatient cost of care,” the researchers wrote.

Even so, they also cautioned against concluding that all high-cost care is a waste of resources. “Certain quality-of-care indicators seemed to have a stronger correlation with cost of care than others (e.g., left ventricular functional assessment among the CHF quality-of-care indicators),” Chen and colleagues indicated.

“Low-cost hospitals may include efficient organizations and organizations that skimp on care. Quality-of-care scores for these two groups may differ substantially, although we cannot identify this from our data,” they pointed out.

The findings emerged from analysis of Medicare patient discharges from 3,150 non-federal hospitals, after excluding the top and bottom 5% in costs and those with incomplete data.

The data covered some 444,000 patients treated for pneumonia and 518,000 hospitalized with CHF from 2004 to 2006.

Outcomes for the analysis included readmissions within six months of the original hospitalization, the costs of initial treatment and subsequent readmissions, and adherence to quality measures set forth by the Joint Commission on the Accreditation of Healthcare Organizations for treatment of pneumonia and CHF.

Chen and colleagues developed a model that predicted the cost of caring for these two conditions on the basis of location, characteristics (such as size and teaching status), and case mix. Actual costs were reported as a fraction of the model prediction.

Hospitals in the lowest quartile of costs for CHF had risk-adjusted ratios of 0.33 to 0.82, and the highest quartile had ratios of 1.12 to 1.89. For pneumonia, the lowest quartile had risk-adjusted ratios of 0.37 to 0.86, and 1.12 to 1.78 for the highest quartile.

Expressed in dollars, the mean costs of care for CHF and pneumonia were $7,114 and $7,040, respectively. But the actual cost for an average patient varied from as little as $1,522 to as much as $18,927 for CHF, with similar variation in pneumonia care.

Low-cost hospitals for CHF tended to be smaller, lacking a cardiac intensive care unit, and with a larger fraction of overall care devoted to CHF patients, compared with hospitals in the highest-cost quartile, the researchers found. They said the findings for pneumonia were “qualitatively similar.”

The cost patterns seemed stable over time, Chen and colleagues found: most hospitals were in the same quartile in succeeding years.

For pneumonia treatment, both quality scores and risk-adjusted 30-day mortality were actually better in the lowest-cost hospitals. Mean quality scores in the lowest and highest quartiles were 86.6 and 85.7, respectively (P=0.002); mortality rates were 11.7% versus 10.9% in high- and low-cost hospitals, respectively (P<0.001).

But the opposite pattern appeared in scores on CHF care quality, which ranged from 85.5 for the lowest cost quartile to 89.9 for the highest quartile (P<0.001). Risk-adjusted 30-day mortality was also significantly lower in the highest-cost hospitals, at 9.8%, compared with 10.8% in the lowest quartile (P<0.001).

These differences between conditions suggests that the relationship between costs and outcomes is not simply a matter of overall hospital efficiency.

Chen and colleagues also found that 30-day readmission rates were somewhat higher in the low-cost hospitals, but total six-month, risk-adjusted inpatient costs remained substantially lower.

For the lowest-cost quartile, the odds ratio for 30-day readmission rates was 1.18 for CHF (95% CI 1.13 to 1.22) and 1.05 for pneumonia (95% CI 1.00 to 1.09), both relative to the highest-cost quartile.

In the case of CHF, the differences in readmission rates were just a few percentage points: 22.0% for the most expensive hospitals versus 24.7% for the cheapest. For pneumonia, the difference was even smaller, 17.3% versus 17.9%.

But the mean six-month dollar costs were $12,715 (95% CI $12,405 to $13,024) for CHF and $10,143 (95% CI $9,893 to $10,393) in the lowest-cost hospitals, compared with $18,411 (95% CI $18,099 to $18,783) and $15,138 (95% CI $14,861 to $15,414) respectively, in the highest quartile.

In an accompanying editorial, Mitchell H. Katz, MD, of the San Francisco Department of Public Health, cautioned that the results don’t warrant eliminating cardiac ICUs and shrinking hospitals.

“The relationship between hospital size and cost is likely confounded by the tendency of larger hospitals to use more technology and specialists.

In fact, higher hospital volumes for specific conditions have been associated with improved quality of care for a variety of conditions,” Katz wrote. “Without intensive care units, patients needing mechanical ventilation, vasopressors, or other critical interventions would require transport to other hospitals.”

Decreasing the duration of hospitalization may be a more feasible strategy, he suggested, as borne out by the current analysis.

Another cost-saving measure that may be helpful in some cases is greater use of hospitalists, Katz suggested. He also recommended paying closer attention to critical care treatment for patients unlikely to benefit from it.

Katz added that comparative effectiveness research, which got a major funding boost in last year’s economic stimulus legislation, could help identify lower-cost treatment methods in many areas that may deliver high-quality results.

Limitations to the study identified by Chen and colleagues included reliance on Medicare data for two particular conditions, lack of data on patient-centered outcomes such as satisfaction, exclusion of outpatient costs in the analysis, and the study’s cross-sectional design.

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