Academic medical centers generally behind counterparts in cost, quality, study finds

Academic medical centers do not necessarily achieve better cost and quality metrics compared to non-academic medical centers, suggests a new Navigant study.

For the study, researchers examined Medicare cost and quality data from 175 U.S. academic medical centers and 212 U.S. non-academic medical centers. These are hospitals with more than $500 million in annual net patient revenue and 10,000 annual discharges. The study excluded facilities that didn't report financial data in 2016 and CMS value-based program scores for fiscal year 2018.

Three findings:

1. In 2017, the Medicare median wage and case mix index-adjusted cost per case was 5.8 percent higher at academic medical centers compared to non-academic medical centers. Navigant said this represents an estimated $3.1 million in average added annual operating expenses for traditional fee-for-service Medicare beneficiaries for each academic medical center. 

2. The study also found there is a 22 percent cost per case disparity between high (25th percentile) and low (75th percentile) performing academic medical centers. That compared to 19.8 percent for non-academic medical centers. Researchers said this cost per case disparity represents $12 million in added annual operating expense for each studied academic medical center and $9.2 million per non-academic medical center.

3. From 2016 to 2018, academic medical centers received more Medicare value-based program penalties than non-academic medical centers, with 40 percent of academic medical centers receiving seven or more of nine possible penalties, compared to 23 percent of non-academic medical centers.

Navigant recommended academic medical centers take various steps to minimize future negative implications — from trends such as "growing revenue at-risk through alternative payment models" — and improve quality and cost. These included comparing performance against peers with benchmarking data, as well as addressing clinical variation by leveraging evidence-based protocols.

Access to the full report is available here.


More articles on healthcare finance:

Recondo Technology names chief product officer: 3 things to know
Texas health system taps Streamline Health for bill coding analysis
44 Massachusetts acute hospitals reported operating surpluses in FY 2017, 4 other findings

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars