Making Sense of How Better Quality Can Be Achieved with Less Money

An interesting study appeared online late last month in the journal Health Affairs on "Hospital Quality And Intensity Of Spending: Is There an Association?" Well, to break the suspense, the answer is yes—there is a connection: spending more money doesn't necessarily translate into better quality care. However, this is one issue that shouldn't be simplified too much as some reports of this study have done.

To put it in perspective, the study is significant because it is one of the first nationwide analyses ever of quality and spending at the level of the individual hospital. Followers of the Dartmouth Atlas of Health Care are familiar with studies into variations in costs and care among groups of hospitals across the country within certain regions. This makes the target even smaller.

The findings of this study could have an impact on the debate in Washington over healthcare reform legislation. The Dartmouth variation numbers have been cited frequently on Capitol Hill during health reform hearings.

Legislators and President Obama both have said that a reform plan must be able to control costs and expand access to high quality, affordable healthcare. In fact, on June 2, Obama said that he was going to discuss with key senators visiting the White House how to get "top notch quality, lower costs." This meant looking at organizations, for example, such as the Mayo Clinic in Rochester, MN, which is "able to provide some of the best health care services in the country at half or sometimes even less of the costs than some other areas where the quality is not as good," he said.

In the Health Affairs study, the data is drilled down into the hospitals themselves, which is called by the researchers "a more natural unit of analysis for reporting on and improving accountability."

The researchers, from Dartmouth and Harvard, used process of care quality measures [and not outcomes measures] from the Centers for Medicare and Medicaid Services Hospital Compare database. The measures focus on three major conditions: acute myocardial infarction (AMI), pneumonia, and congestive heart failure (CHF).

These measures are determined from the percentage of appropriate patients receiving "a specific, often low cost, evidence based therapy—depending on their conditions." Performances on these measures are compared to hospital level end of life spending based on spending for chronically ill patients age 65 years or older.

Eleven process measures provided at least 25 observations for a majority of hospitals: aspirin at arrival and at discharge and beta blocker prescription at arrival and at discharge (for AMI); assessment of left ventricular function, the provision of discharge instructions, and angiotensin converter enzyme (ACE) inhibitor or angiotensin receptor blocker (ARB) prescription for patients with left ventricular systolic dysfunction (LVSD) (congestive heart failure); blood culture performed before receiving the first antibiotic in the hospital, first dose of antibiotic within four hours of admission, initial antibiotic selected appropriately, and assessment of arterial oxygenation within twenty four hours of arrival (pneumonia).

The researchers constructed a measure of spending that reflected only the specific use of services to explain a large amount of hospital spending: number of hospital days, total physician visits, intensive care unit (ICU) days, and the ratio of specialist to primary care physician visits at the end of life. (This means that the influence of varying reimbursements linked to graduate medical education, Medicare disproportionate share payments, and geographical price adjustments were removed.)

What they found after all this is that by examining process of care measures, hospitals that provide more intensive and costly care do not necessarily provide better quality care—as measured by the percentage of patients who are given evidence based treatments.

In more concrete figures, the study found that among a fifth of hospitals that spent the least, the cost of end of life care was $16,059 on average. In comparison, the cost of end of life care at the top 20% bracket of highest spending hospitals was $34,742 on average.

The researchers noted that the results might be skewed because the quality indicators they used might penalize hospitals that treat sicker patients. In addition, the study used process of care measures instead of patient outcomes which could yield different results if they were used. However, it helps demonstrate how differences in costs—and care—can be more carefully observed hospital by hospital.