Better Patient Care At High-Quality Hospitals May Save Medicare Money And Bolster Episode-Based Payment Models.
US policy makers are making efforts to simultaneously improve the quality of and reduce spending on health care through alternative payment models such as bundled payment. Bundled payment models are predicated on the theory that aligning financial incentives for all providers across an episode of care will lower health care spending while improving quality. Whether this is true remains unknown. Using national Medicare fee-for-service claims for the period 2011-12 and data on hospital quality, we evaluated how thirty- and ninety-day episode-based spending were related to two validated measures of surgical quality-patient satisfaction and surgical mortality. We found that patients who had major surgery at high-quality hospitals cost Medicare less than those who had surgery at low-quality institutions, for both thirty- and ninety-day periods. The difference in Medicare spending between low- and high-quality hospitals was driven primarily by postacute care, which accounted for 59.5 percent of the difference in thirty-day episode spending, and readmissions, which accounted for 19.9 percent. These findings suggest that efforts to achieve value through bundled payment should focus on improving care at low-quality hospitals and reducing unnecessary use of postacute care.
Thomas C. Tsai is a research associate in the Department of Health Policy and Management at the Harvard T. H. Chan School of Public Health and a general surgery resident in the Department of Surgery at Brigham and Women's Hospital, both in Boston, Massachusetts.
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Felix Greaves is an honorary clinical senior lecturer in the Department of Primary Care and Public Health, Imperial College London, and deputy director for science and strategic information at Public Health England, in London.
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Jie Zheng is a senior statistician at the Harvard T. H. Chan School of Public Health.
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E. John Orav is an associate professor of biostatistics at the Harvard T. H. Chan School of Public Health.
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Michael J. Zinner is CEO of Miami Cancer Institute, at Baptist Health South Florida, in Miami.
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Ashish K. Jha (ajha@hsph.harvard.edu) is the K. T. Li Professor of International Health at the Harvard T. H. Chan School of Public Health and director of the Harvard Global Health Institute, in Cambridge, Massachusetts.
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D017046:Cost Savings; D016208:Databases, Factual; D003695:Delivery of Health Care / Q000191:economics; D017050:Episode of Care; D018588:Fee-for-Service Plans; D005260:Female; D006291:Health Policy / Q000191:economics; D061847:Hospitals, High-Volume / Q000706:statistics & numerical data*; D006801:Humans; D007345:Insurance Claim Review; D008297:Male; D006278:Medicare / Q000191:economics*; D018803:Models, Economic; D005791:Patient Care / Q000191:economics*; D011785:Quality Assurance, Health Care; D012189:Retrospective Studies; D014481:United States
Cost of Health Care; Health Reform; Health Spending; Quality Of Care