9 Statistics on High vs. Low-Cost Hospitals & Quality

A study published in Health Affairs examining the relationship between hospital prices and value indicators found better quality measures may not be associated with high-cost hospitals.

While the high-cost hospitals fared better on reputation-based quality measurements, (none of the low-cost hospitals were nationally ranked), their performance on outcome-based quality measures was not consistently better.

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High-cost hospitals had a higher CMS excess readmission rate (1.04) than low-cost hospitals (1.02). High-cost hospitals also performed worse on patient safety indicators. For example, the rate of inpatient surgical deaths for high-cost hospitals was 112 per 1,000, compared to 103 per 1,000 for low-cost hospitals.  

However, high-cost hospitals performed better on 30-day mortality rates for Medicare heart failure patients (10.0) compared to low-cost hospitals (11.1).

Authors suggest three reasons for the study's findings. First, they suggest high-cost hospitals may provide higher-quality care, but their patients are sicker and are socioeconomically disadvantaged, increasing their likelihood of negative outcomes. They also suggest high-cost hospitals are seen as reputable by physicians, but the positive reputation is not deserved. Finally, the authors suggest high-cost hospitals have positive reputations in specialty and tertiary care, but their routine inpatient care is not as good.

Here are six more key findings from the study.

1. Serious blood clots in surgical discharges were at a rate of 5.36 per 1,000 discharges for high-cost hospitals versus 4.31 per 1,000 for low-cost hospitals.

2. High-cost hospitals have an average of 474 beds, while low-cost hospitals have an average of about 220 beds.

3. Forty-seven percent of higher-priced hospitals are major teaching hospitals, compared to only 17 percent of low-cost hospitals.

4. In a survey of 110 short-term general hospitals in the 2011 Annual Survey of Hospitals of the American Hospital Association, the next closest hospital was more than five miles away for 53 low-cost hospitals. This was true for 17 high-cost hospitals.

5. The standardized cost for a Medicare discharge for high-cost hospitals was $7,557, compared to $6,176 for low-cost hospitals.

6. High-cost hospitals had a -2.8 percent operating margin. Low-cost hospitals had a 1.5 percent operating margin.

For full coverage of the study, please click here.

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