Hospitals with more privately insured patients have better care quality, study finds

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Researchers at Evanston, Ill.-based Northwestern University's Kellogg School of Management found that hospitals with higher rates of privately insured patients consistently provided better-quality care than those with more publicly insured patients, according to an article published on the school's website.

The researchers estimated that the mortality rate increased by 1.5 percent with every standard-deviation increase in a hospital's non-private patient share, the article said.

Researchers posited that hospitals with more high-paying privately insured patients made more investments in quality initiatives to differentiate themselves from the competition and demonstrate their worth in private insurance networks.

"Consistently what we see is that places that have more opportunity to earn money from quality make costly investments in quality," said Craig Garthwaite, PhD, who co-authored a report on the findings.

Dr. Garthwaite, along with Amanda Starc, PhD, and Christopher Ody, PhD, analyzed data related to ZIP code demographics near hospitals as well as data involving hospital quality measures to draw their conclusions.

"I don't think that our paper says that we shouldn't have 'Medicare for all,'" Dr. Garthwaite said. "But it does suggest that as part of the conversation about regulated prices, we should be talking about this quality trade-off more than I think is currently happening in the policy debate."

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