Evidence on the efficacy of inpatient spending on Medicare patients

A Systematic Review of the Association Between Hospital Cost/price and the Quality of Care

BACKGROUND

Limited empirical evidence exists regarding the effect of price changes on hospital behavior and, ultimately, the quality of care. Additionally, an overview of the results of prior literature is lacking.

OBJECTIVE

This study aims to provide a synthesis of existing research concerning the relationship between hospital cost/price and the quality of care.

METHODS

Searches for literature related to the effect of hospital cost and price on the quality of care, including studies published between 1990 and March 2019, were carried out using four electronic databases. In total, 47 studies were identified, and the data were extracted and summarized in different tables to identify the patterns of the relationships between hospital costs/prices and the quality of care.

RESULTS

The study findings are highly heterogenous. The proportion of studies detecting a significant positive association between price/cost and the quality of care is higher when (a) price/reimbursement is used (instead of cost); (b) process measures are used (instead of outcome measures); (c) the focus is on acute myocardial infarction, congestive heart failure, and stroke patients (instead of patients with other clinical conditions or all patients); and (d) the methodological approach used to address confounding is more sophisticated.

CONCLUSION

Our results suggest that there is no general relationship between cost/price and the quality of care. However, the relationship seems to depend on the condition and specific resource utilization. Policy makers should be prudent with the measures used to reduce hospital costs to avoid endangering the quality of care, especially in resource-sensitive settings.

Better Patient Care At High-Quality Hospitals May Save Medicare Money And Bolster Episode-Based Payment Models

US policy makers are making efforts to simultaneously improve the quality of and reduce spending on health care through alternative payment models such as bundled payment. Bundled payment models are predicated on the theory that aligning financial incentives for all providers across an episode of care will lower health care spending while improving quality. Whether this is true remains unknown. Using national Medicare fee-for-service claims for the period 2011-12 and data on hospital quality, we evaluated how thirty- and ninety-day episode-based spending were related to two validated measures of surgical quality-patient satisfaction and surgical mortality. We found that patients who had major surgery at high-quality hospitals cost Medicare less than those who had surgery at low-quality institutions, for both thirty- and ninety-day periods. The difference in Medicare spending between low- and high-quality hospitals was driven primarily by postacute care, which accounted for 59.5 percent of the difference in thirty-day episode spending, and readmissions, which accounted for 19.9 percent. These findings suggest that efforts to achieve value through bundled payment should focus on improving care at low-quality hospitals and reducing unnecessary use of postacute care.

Medicare Managed Care Spillovers and Treatment Intensity

Evidence suggests that the share of Medicare managed care enrollees in a region affects the costs of treating traditional fee-for-service (FFS) Medicare beneficiaries; however, little is known about the mechanisms through which these 'spillover effects' operate. This paper examines the relationship between Medicare managed care penetration and treatment intensity for FFS enrollees hospitalized with a primary diagnosis of AMI. I find that increased Medicare managed care penetration is associated with a reduction in both the costs and the treatment intensity of FFS AMI patients. Specifically, as Medicare managed care penetration increases, FFS AMI patients are less likely to receive surgical reperfusion and mechanical ventilation and to experience an overall reduction in the number of inpatient procedures. Copyright © 2015 John Wiley & Sons, Ltd.

Association Between Time to Rehabilitation and Outcomes After Traumatic Spinal Cord Injury

OBJECTIVE

To examine the relations between time to rehabilitation after spinal cord injury (SCI) and rehabilitation outcomes at discharge and 1-year postinjury.

DESIGN

Retrospective cohort study.

SETTING

Facilities designated as Spinal Cord Injury Model Systems.

PARTICIPANTS

Patients (N=3937) experiencing traumatic SCI between 2000 and 2014, who were 18 years or older, and who were admitted to a model system within 24 hours of injury.

INTERVENTIONS

Not applicable.

MAIN OUTCOME MEASURES

Rasch-transformed FIM motor score at discharge and 1-year postinjury, discharge to a private residence, and the Craig Handicap Assessment and Reporting Technique (CHART) Physical Independence and Mobility scores at 1-year postinjury.

RESULTS

After accounting for health status, a 10% increase in time to rehabilitation was associated with a 1.50 lower FIM motor score at discharge (95% confidence interval [CI], -2.43 to -0.58; P=.001) and a 3.92 lower CHART Physical Independence score at 1-year postinjury (95% CI, -7.66 to -0.19; P=.04). Compared to the mean FIM motor score (37.5) and mean CHART Physical Independence score (74.7), the above-mentioned values represent relative declines of 4.0% and 5.3%, respectively. There was no association between time to rehabilitation and discharge to a private residence, 1-year FIM motor score, or the CHART mobility score.

CONCLUSIONS

Earlier rehabilitation after traumatic SCI may improve patients' functional status at discharge.

Outcome, Use of Resources and Their Relationship in the Treatment of AMI, Stroke and Hip Fracture at European Hospitals

The aim of the present study was to compare the quality (survival), use of resources and their relationship in the treatment of three major conditions (acute myocardial infarction (AMI), stroke and hip fracture), in hospitals in five European countries (Finland, Hungary, Italy, Norway and Sweden). The comparison of quality and use of resources was based on hospital-level random effects models estimated from patient-level data. After examining quality and use of resources separately, we analysed whether a cost-quality trade-off existed between the hospitals. Our results showed notable differences between hospitals and countries in both survival and use of resources. Some evidence would support increasing the horizontal integration: higher degrees of concentration of regional AMI care were associated with lower use of resources. A positive relation between cost and quality in the care of AMI patients existed in Hungary and Finland. In the care of stroke and hip fracture, we found no evidence of a cost-quality trade-off. Thus, the cost-quality association was inconsistent and prevailed for certain treatments or patient groups, but not in all countries.

US hospitals experienced substantial productivity growth during 2002-11

The need for better value in US health care is widely recognized. Existing evidence suggests that improvement in the productivity of American hospitals-that is, the output that hospitals produce from inputs such as labor and capital-has lagged behind that of other industries. However, previous studies have not adequately addressed quality of care or severity of patient illness. Our study, by contrast, adjusts for trends in the severity of patients' conditions and health outcomes. We studied productivity growth among US hospitals in treating Medicare patients with heart attack, heart failure, and pneumonia during 2002-11. We found that the rates of annual productivity growth were 0.78 percent for heart attack, 0.62 percent for heart failure, and 1.90 percent for pneumonia. However, unadjusted productivity growth appears to have been negative. These findings suggest that productivity growth in US health care could be better than is sometimes believed, and may help alleviate concerns about Medicare payment policy under the Affordable Care Act.

Does Higher Spending Improve Survival Outcomes for Myocardial Infarction? Examining the Cost-Outcomes Relationship Using Time-Varying Covariates

OBJECTIVES

Previous patient-level acute myocardial infarction (AMI) research has found higher hospital spending to be associated with improved survival; however, survivor-treatment selection bias traditionally has been overlooked. The purpose of this study was to examine the AMI cost-outcome relationship, taking into account this form of bias.

DATA SOURCES

Hospital Discharge Abstract data tracked costs for AMI hospitalizations. Ontario Vital Statistics data tracked patient mortality.

STUDY DESIGN

A standard Cox survival model was compared to an extended Cox model using hospital costs as a time-varying covariate to examine the impact of cost on 1-year survival in a cohort of 30,939 first-time AMI patients in Ontario, Canada, from 2007 to 2010.

PRINCIPAL FINDINGS

Higher patient-level AMI spending decreased the hazard of dying (Standard Model: log-cost hazard ratio: 0.513, 95 percent CI: 0.479-0.549; Extended Model: log-cost hazard ratio: 0.700, 95 percent CI: 0.645-0.758); however, the protective effect was overestimated by 62 percent when survivor-treatment bias was overlooked. In the extended model, a 10 percent increase in spending was associated with a 3.6 percent decrease in hazard of death.

CONCLUSION

The findings of this study suggest that if survivor-treatment bias is overlooked, future research may materially overstate the protective effect of patient-level spending on outcomes.

Geographic access and age-related variation in chemotherapy use in elderly with metastatic breast cancer

Significant age-related variation in chemotherapy use has been observed among elderly patients with metastatic breast cancer (MBC), which may be partly attributable to geographic access factors such as local area physician practice culture and local health care system capacity. The purpose of the paper was to examine how age may modify the effect of geographic access on chemotherapy use in elderly patients with MBC. This was a retrospective cohort study based on the surveillance, epidemiology, and end results-Medicare-linked database of 1992-2002. Chemotherapy use was defined as at least one chemotherapy-related claim within 6-month post-diagnosis. Geographic access to cancer care was measured by four variables: patient travel time to the nearest oncologist practice, local area per capita number of oncologists, local area per capita number of hospices, and local area chemotherapy rate. Using multivariate logistic regression model, both aggregate models with interaction terms and subgroup analyses were conducted. Among 4,533 elderly with MBC, 30.16 % used chemotherapy. Chemotherapy use decreased with age. Both the aggregate model with interaction terms and the subgroup analysis showed that local area chemotherapy rate was positively associated with chemotherapy use (P = .0004 in the whole group; in the subgroup analyses, P < .0001, P = .0006, P = .0006, P = .18, P = .026, respectively). In addition, subgroup analysis showed that, among patients aged 85+ years old, local area oncologist supply was negatively associated with chemotherapy use (P = .028). The impact of geographic access to cancer care is the greatest among the oldest group, for whom the clinical evidence is the least certain.

Long-term impact of medicare payment reductions on patient outcomes

OBJECTIVE

To examine the long-term impact of Medicare payment reductions on patient outcomes for Medicare acute myocardial infarction (AMI) patients.

DATA SOURCES

Analysis of secondary data compiled from 100 percent Medicare Provider Analysis and Review between 1995 and 2005, Medicare hospital cost reports, Inpatient Prospective Payment System Payment Impact Files, American Hospital Association annual surveys, InterStudy, Area Resource Files, and County Business Patterns.

STUDY DESIGN

We used a natural experiment-the Balanced Budget Act (BBA) of 1997-as an instrument to predict cumulative Medicare revenue loss due solely to the BBA, and basing on the predicted loss categorized hospitals into small, moderate, or large payment-cut groups and followed Medicare AMI patient outcomes in these hospitals over an 11-year panel between 1995 and 2005.

PRINCIPAL FINDINGS

We found that while Medicare AMI mortality trends remained similar across hospitals between pre-BBA and initial-BBA periods, hospitals facing large payment cuts saw smaller improvement in mortality rates relative to that of hospitals facing small cuts in the post-BBA period. Part of the relatively higher AMI mortalities among large-cut hospitals might be related to reductions in staffing levels and operating costs, and a small part might be due to patient selection.

CONCLUSIONS

We found evidence that hospitals facing large Medicare payment cuts as a result of BBA of 1997 were associated with deteriorating patient outcomes in the long run. Medicare payment reductions may have an unintended consequence of widening the gap in quality across hospitals.

Higher practice intensity is associated with higher quality of care but more avoidable admissions for medicare beneficiaries

BACKGROUND

The relationship between practice intensity and the quality and outcomes of care has not been studied.

OBJECTIVE

To examine the relationship between primary care physicians' costliness both for defined episodes of care and for defined patients and the quality and outcomes of care delivered to Medicare beneficiaries.

STUDY DESIGN

Cross sectional analysis of physician survey data linked to Medicare claims. Physician costliness measures were calculated by comparing the episode specific and overall costs of care for their patients with the care delivered by other physicians.

PARTICIPANTS

We studied physicians participating in the 2004-2005 Community Tracking Study Physician Survey linked with administrative claims from the Medicare program for the years 2004-2006.

MAIN MEASURES

Proportion of eligible beneficiaries receiving each of seven preventive services and rates of preventable admissions for acute and chronic conditions.

KEY RESULTS

The 2,211 primary care physician respondents included 937 internists and 1,274 family or general physicians who were linked to more than 250,000 Medicare enrollees. Patients treated by more costly physicians (whether measured by the overall costliness index or the episode-level index) were more likely to receive recommended preventive services, but were also more likely to experience preventable admissions. For instance, physicians in the lowest quartile of costliness performed appropriate monitoring for hemoglobin A1C for diabetics 72.8% of the time, as compared with 81.9% for physicians in the highest quartile of costliness (p < 0.01). In contrast, patients treated by the physicians in the lowest quartile of episode costliness were admitted at a rate of 1.8/100 for both acute and chronic Prevention Quality Indicators (PQIs), as compared with 2.9/100 for both acute and chronic PQIs for those treated by physicians in the highest quartile of costliness (p < 0.001).

CONCLUSIONS

Physician practice patterns are associated with the quality of preventive services delivered to Medicare patients. Ongoing efforts to influence physician practice patterns may have differential effects on different aspects of quality.

Hospital costs and inpatient mortality among children undergoing surgery for congenital heart disease

OBJECTIVE

To determine the association between hospital costs and risk-adjusted inpatient mortality among children undergoing surgery for congenital heart disease (CHD) in U.S. acute-care hospitals.

DATA SOURCES/STUDY SETTINGS

Retrospective cohort study of 35,446 children in 2003, 2006, and 2009 Kids' Inpatient Database (KID).

STUDY DESIGN

Cross-sectional logistic regression of risk-adjusted inpatient mortality and hospital costs, adjusting for a variety of patient-, hospital-, and community-level confounders.

DATA COLLECTION/EXTRACTION METHODS

We identified relevant discharges in the KID using the AHRQ Pediatric Quality Indicator for pediatric heart surgery mortality, and linked these records to hospital characteristics from American Hospital Association Surveys and community characteristics from the Census.

PRINCIPAL FINDINGS

Children undergoing CHD surgery in higher cost hospitals had lower risk-adjusted inpatient mortality (p=.002). An increase from the 25th percentile of treatment costs to the 75th percentile was associated with a 13.6 percent reduction in risk-adjusted mortality.

CONCLUSIONS

Greater hospital costs are associated with lower risk-adjusted inpatient mortality for children undergoing CHD surgery. The specific mechanisms by which greater costs improve mortality merit further exploration.

Geographic variation in fee-for-service medicare beneficiaries' medical costs is largely explained by disease burden

Control for area differences in population health (casemix adjustment) is necessary to measure geographic variations in medical spending. Studies use various casemix adjustment methods, resulting in very different geographic variation estimates. We study casemix adjustment methodological issues and evaluate alternative approaches using claims from 1.6 million Medicare beneficiaries in 60 representative communities. Two key casemix adjustment methods-controlling for patient conditions obtained from diagnoses on claims and expenditures of those at the end of life-were evaluated. We failed to find evidence of bias in the former approach attributable to area differences in physician diagnostic patterns, as others have found, and found that the assumption underpinning the latter approach-that persons close to death are equally sick across areas-cannot be supported. Diagnosis-based approaches are more appropriate when current rather than prior year diagnoses are used. Population health likely explains more than 75% to 85% of cost variations across fixed sets of areas.

Spending and mortality in US acute care hospitals

BACKGROUND

Despite evidence that greater US Medicare spending is not associated with better quality of care at a regional level, recent studies suggest that greater hospital spending is associated with lower risk-adjusted mortality. Studies have been limited to older data, specific US states and conditions, and the Medicare population.

OBJECTIVES

To analyze the association between hospital spending and risk-adjusted inpatient mortality for 6 major medical conditions in US acute care hospitals.

STUDY DESIGN

Retrospective cohort study of risk adjusted inpatient mortality, with hospital spending taken from the Dartmouth Atlas of Health Care. The study population included 2,635,510 patients admitted to 1201 US hospitals between 2003 and 2007.

METHODS

Patient-level logistic regression models were used to estimate the effect of hospital spending on inpatient mortality, controlling for mortality risk, comorbidities, community characteristics (eg, median household income in a patient's zip code), hospital volume and ownership, and admission year.

RESULTS

Patients treated at hospitals in the highest spending quintile (relative to the lowest) had lower risk-adjusted inpatient mortality for acute myocardial infarction (odds ratio [OR] 0.751, 95% confidence interval [CI] 0.656-0.859), congestive heart failure (OR 0.652, 95% CI 0.560-0.759), stroke (OR 0.852, 95% CI, 0.739-0.983), and hip fracture (OR 0.691, 95% CI 0.545-0.876). Greater spending was associated with lower mortality primarily in nonteaching hospitals, hospitals with fewer than the median number of beds, and nonprofit/public hospitals.

CONCLUSIONS

Greater hospital spending is associated with lower risk-adjusted inpatient mortality for major medical conditions in the United States.

The association between health care quality and cost: a systematic review

BACKGROUND

Although there is broad policy consensus that both cost containment and quality improvement are critical, the association between costs and quality is poorly understood.

PURPOSE

To systematically review evidence of the association between health care quality and cost.

DATA SOURCES

Electronic literature search of PubMed, EconLit, and EMBASE databases for U.S.-based studies published between 1990 and 2012.

STUDY SELECTION

Title, abstract, and full-text review to identify relevant studies.

DATA EXTRACTION

Two reviewers independently abstracted data with differences reconciled by consensus. Studies were categorized by level of analysis, type of quality measure, type of cost measure, and method of addressing confounders.

DATA SYNTHESIS

Of 61 included studies, 21 (34%) reported a positive or mixed-positive association (higher cost associated with higher quality); 18 (30%) reported a negative or mixed-negative association; and 22 (36%) reported no difference, an imprecise or indeterminate association, or a mixed association. The associations were of low to moderate clinical significance in many studies. Of 9 studies using instrumental variables analysis to address confounding by unobserved patient health status, 7 (78%) reported a positive association, but other characteristics of these studies may have affected their findings.

LIMITATIONS

Studies used widely heterogeneous methods and measures. The review is limited by the quality of underlying studies.

CONCLUSION

Evidence of the direction of association between health care cost and quality is inconsistent. Most studies have found that the association between cost and quality is small to moderate, regardless of whether the direction is positive or negative. Future studies should focus on what types of spending are most effective in improving quality and what types of spending represent waste.

PRIMARY FUNDING SOURCE

Robert Wood Johnson Foundation.

Iliac crest autograft versus alternative constructs for anterior cervical spine surgery: Pros, cons, and costs

Background:

Grafting choices available for performing anterior cervical diskectomy/fusion (ACDF) procedures have become a major concern for spinal surgeons, and their institutions. The “gold standard”, iliac crest autograft, may still be the best and least expensive grafting option; it deserves to be reassessed along with the pros, cons, and costs for alternative grafts/spacers.

Methods:

Although single or multilevel ACDF have utilized iliac crest autograft for decades, the implant industry now offers multiple alternative grafting and spacer devices; (allografts, cages, polyether-etherketone (PEEK) amongst others). While most studies have focused on fusion rates and clinical outcomes following ACDF, few have analyzed the “value-added” of these various constructs (e.g. safety/efficacy, risks/complications, costs).

Results:

The majority of studies document 95%-100% fusion rates when iliac crest autograft is utilized to perform single level ACDF (X-ray or CT confirmed at 6-12 postoperative months). Although many allograft studies similarly quote 90%-100% fusion rates (X-ray alone confirmed at 6-12 postoperative months), a recent “post hoc analysis of data from a prospective multicenter trial” (Riew KD et. al., CSRS Abstract Dec. 2011; unpublished) revealed a much higher delayed fusion rate using allografts at one year 55.7%, 2 years 87%, and four years 92%.

Conclusion:

Iliac crest autograft utilized for single or multilevel ACDF is associated with the highest fusion, lowest complication rates, and significantly lower costs compared with allograft, cages, PEEK, or other grafts. As spinal surgeons and institutions become more cost conscious, we will have to account for the “value added” of these increasingly expensive graft constructs.

Medicare spending, mortality rates, and quality of care

We applied instrumental variable analysis to a sample of 388,690 Medicare beneficiaries predicted to be high-cost cases to estimate the effects of medical care use on the relative odds of death or experiencing an avoidable hospitalization in 2006. Contrary to conclusions from the observational geographic variations literature, the results suggest that greater medical care use is associated with statistically significant and quantitatively meaningful health improvements: a 10% increase in medical care use is associated with a 8.4% decrease in the mortality rate and a 3.8% decrease in the rate of avoidable hospitalizations.

Reducing the cost and frequency of explantations associated with single-level anterior diskectomy and fusion at a single institution through education

STUDY DESIGN

We prospectively evaluated the costs/frequency of explanted instrumentation (devices implanted but removed prior to closure) for all single-level anterior diskectomy (1-ADF) procedures performed in 2010 at a single institution before and after surgeon education.

OBJECTIVE

To determine whether surgeon education would reduce the costs/frequency of explantation for 1-ADF.

SUMMARY OF BACKGROUND DATA

In 2009, we reported that the cost of explanted devices was 9.2% of the cost of implanted devices.

METHODS

The costs/frequencies of explantation for 1-ADF performed in 2010 at the same institution by the same surgeons were analyzed before and after surgeon education. From January through April, surgeons were unaware of concerns regarding explantation. At the end of April 2010, spinal surgeons were educated about explantation costs/frequency at 2 meetings. Explantation costs/frequencies for the first 4 months of 2010 were compared with those for the last 8 months as well as with the results from 2009.

RESULTS

Prior to surgeon education, instrumentation was explanted in 45.5% of the cases, whereas after education explantation occurred in 16% of the cases. The explantation rate (the number of explanted devices as a percentage of implanted devices) was lower after education for screws (12.5% vs. 7.7%), plates (9.4% vs. 0%), and allograft spacers (7.1% vs. 2.9%), and lower than for rates from 2009. In 2010, the overall cost of explanted devices as a percentage of implanted devices was also lower after surgeon education (5.8%) than before surgeon education in 2010 (20.0%) or 2009 (9.2%).

CONCLUSION

The frequency and cost of explanted instrumentation used to perform 1-ADF were reduced through surgeon education.

Medical spending and the health of the elderly

OBJECTIVE

To estimate the relationship between variations in medical spending and health outcomes of the elderly.

DATA SOURCES

1992-2002 Medicare Current Beneficiary Surveys.

STUDY DESIGN

We used instrumental variable (IV) estimation to identify the relationships between alternative measures of elderly Medicare beneficiaries' medical spending over a 3-year observation period and health status, measured by the Health and Activity Limitation Index (HALex) and survival status at the end of the 3 years. We used the Dartmouth Atlas End-of-Life Expenditure Index defined for hospital referral regions in 1996 as the exogenous identifying variable to construct the IVs for medical spending.

DATA COLLECTION/EXTRACTION METHODS

The analysis sample includes 17,438 elderly (age >64) beneficiaries who entered the Medicare Current Beneficiary Survey in the fall of each year from 1991 to 1999, were not institutionalized at baseline, stayed in fee-for-service Medicare for the entire observation period, and survived for at least 2 years. Measures of baseline health were constructed from information obtained in the fall of the year the person entered the survey, and changes in health were from subsequent interviews over the entire observation period. Medicare and total medical spending were constructed from Medicare claims and self-reports of other spending over the entire observation period.

PRINCIPAL FINDINGS

IV estimation results in a positive and statistically significant relationship between medical spending and better health: 10 percent greater medical spending over the prior 3 years (mean=U.S.$2,709) is associated with a 1.9 percent larger HALex value (p=.045; range 1.2-2.2 percent depending on medical spending measure) and a 1.5 percent greater survival probability (p=.039; range 1.2-1.7 percent).

CONCLUSIONS

On average, greater medical spending is associated with better health status of Medicare beneficiaries, implying that across-the-board reductions in Medicare spending may result in poorer health for some beneficiaries.