New study assesses quality and cost of care at nation’s hospitals

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Higher spending on end-of-life care reduces overall quality

Costly care isn’t necessarily better care at the nation’s hospitals.  New research conducted by a team including Harvard Kennedy School Professor Amitabh Chandra represents one of the first nationwide analyses of quality and spending at the level of individual hospitals in the United States.  The study is published on the Health Affairs Web site.  

The study examines care given to Medicare beneficiaries for three common conditions: acute myocardial infarction, or heart attack; pneumonia; and congestive heart failure.

Looking at hospitals of all types across the country, the study found a statistically significant negative relationship between hospitals’ end-of-life (EOL) spending and overall quality, meaning that hospitals that spent more actually performed worse on overall quality measures than lower-spending hospitals. When the analysis was limited to academic medical centers, there was no positive association between quality and spending. Here, the only statistically significant finding was a negative relationship between EOL spending and the quality of treatment for heart attacks.

Previous studies had found that higher spending does not lead to better care on a regional level. However, because efforts to improve the quality of care and decrease unnecessary spending are likely to start at the level of individual hospitals, which provide the organizational context in which patients receive most of their care, it is important to ascertain the relationship between spending and quality at the hospital level.

“The fact that some hospitals in the same region are able to provide exemplary care at lower costs points to the need for better reporting of both costs and quality, and for a greater understanding of what processes lead to this improvement in performance,” said Chandra.

Chandra is professor of public policy and a research fellow at the National Bureau of Economic Research (NBER) in Cambridge, Mass. His current research focuses on productivity and expenditure growth in health care, racial disparities in health care, and the economics of neonatal health and cardiovascular care.

The study, co-authored by Laura Yasaitis, Elliot Fisher, and Jonathan Skinner of Dartmouth College, was funded by the National Institute on Aging.