WBB's Thought Leadership

Study Finds High-Quality Hospitals Produce Greater Cost Savings than Lower-Quality Hospitals Due to

September 20

Summary: A study that examined costs and outcomes of 100,000 Medicare beneficiaries receiving surgery found cost savings of $2,200 to $2,700 for those receiving care at higher-quality hospitals due to reduced post-acute care. Higher-quality hospitals were also reported having 50% lower mortality rates.

Excerpt: “A study, published in Health Affairs, examined costs and outcomes of high-quality and lower-quality hospitals between 2011 and 2012 for five major procedures: coronary artery bypass grafting, pulmonary lobectomy, endovascular repair of abdominal aortic aneurysm, colectomy and hip replacement. The team calculated the cost of the procedures and after care at both the 30-day and 90-day marks for about 100,000 beneficiaries. The research found that Medicare spent $2,700 less in the first 30-days for patients at high-quality hospitals, and about $2,200 less in 90 days. Most of the savings, according to the study, occurred because patients who were treated at the high-quality facilities used less post-acute care, like rehabilitation or home health services.

‘In much of healthcare, better care costs more money but surgery may be one situation in which getting care at a high-quality hospital not only saves lives, but also saves money. And that is a win for everyone,’ Ashish Jha, M.D., a professor at Harvard’s T.H. Chan School of Public Health and senior author of the study, said in an announcement of the findings.

High-quality hospitals were identified in this study by two factors: 30-day surgical mortality rates and patient experience scores. Jha said in the announcement that the high-quality hospitals had mortality rates that were 50% less than the lower-quality hospitals. The key takeaways of the study include: Pressure should be placed on lawmakers and industry leaders to make it easier for patients to find quality care facilities. Findings from the study may provide industry-wide direction in reducing reduce healthcare costs via bundled payment models. Future efforts should focus on ways to improve care at lower-quality hospitals to reduce unneeded post-acute care costs, according to the study.”

WBB Assessment: Although achieving high quality may initially be costly, research shows that improved quality more than offsets the cost, and results in improved health outcomes and reduced waste. With an increased focus on quality metrics due to the Medicare Access and CHIP Reauthorization Act (MACRA), facilities that achieve higher quality will also be rewarded with higher payments from Medicare and Medicaid. In contrast, facilities that have low quality will not only have higher costs, but will also be penalized under MACRA. To achieve high quality, facilities need to develop an overarching quality management strategy, and build quality improvement into the daily operations. Part of effective quality management is the selection of appropriate outcomes, process, and balancing metrics, and ensuring that quality metrics and key performance indicators are aligned to operational goals.

Source: Fierce Healthcare


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