Study shows hospital productivity is improving

Hospitals may actually be able to deliver on the assumption in the Patient Protection and Affordable Care Act that they can provider better quality care for less, according to a recent study in Health Affairs.

Despite previous studies, this effort shows that hospital productivity growth — the increase in output produced for the input of labor and capital — has actually improved in recent years, proving hospitals may not be suffering from the so-called "cost disease," in which a heavy reliance on human labor, rather than productivity-enhancing technologies, stunts productivity growth. Education, by this same theory, suffers from a cost disease, due to its heavy reliance on human labor.

In this study, researchers examined hundreds of thousands of Medicare patient stays between 2002 and 2011 for each of three cohorts: heart attacks, heart failure and pneumonia. Initially their analysis revealed negative productivity growth for hospitals for each cohort. However, after researchers adjusted for patient severity and outcomes achieved after hospitalization, productivity growth appeared to be increasing for each diagnosis. The productivity growth rate increased 0.78 percent annually for heart attack, 0.62 percent annually for heart failure and 1.9 percent annually for pneumonia, when adjusted.

These results suggest productivity growth in U.S. hospitals is actually better than we think.  


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