Hospitals that do more—more tests, more procedures—when a critically ill patient arrives in the emergency room cost more (price being equal). They may also get better results, according to a newly published working paper for the National Bureau of Economic Research.
Maybe it's worth it: The benefits of high-cost hospitals
The results add to studies trying to pinpoint whether high-cost hospitals get better outcomes or simply waste money. It's a question with a pressing demand for an answer as rising healthcare costs continue to strain household, business and government budgets, yet millions remain uninsured.
The paper, authored by Joseph Doyle, John Graves, Jonathan Gruber and Samuel Kleiner, examined 2002 through 2008 data for Medicare patients who arrived in the emergency room with any of 29 conditions for which you do not delay treatment.
They found that the mortality rate drops 4% from the baseline for the first year after a hospital visit, when costs climb 10%. The baseline mortality rate is 37%. The data also suggest that the amount of healthcare services provided was behind the better results at high-cost hospitals.
The authors also tried a new approach to weed out one factor that may bias estimates: High-cost hospitals may care for highly ill patients, said Doyle, an associate professor of economics at the Massachusetts Institute of Technology.
To do so, they selected a population of Medicare patients who arrived at the hospital by ambulance.
Why? Ambulance companies are dispatched to patients by rotation or proximity, according to results of a survey of 30 cities the authors conducted. This means that the ambulance that arrives in an emergency is pretty much random. But the hospital to which an ambulance rushes is not, according to the results. Ambulances tend to prefer one hospital over another, the analysis found.
After some statistical analysis, the net result is that where patients end up is pretty much random, which limits the risk that highly ill are treated at the high-cost hospitals, the authors said.
The researchers also looked at outcomes for neighbors in New York, where ambulances operate in state-designated territory. With state data for neighbors who live in different ambulance zones, the analysis found lower mortality for those who live in ambulance zones with high-cost hospitals.
Prior studies, notably the Dartmouth Atlas of Health Care, have identified significant geographic variation in healthcare spending, with some evidence that high cost does not lead to better results, the researchers noted. Other studies of hospital spending and outcomes have shown some returns from more costly treatment.
More recently, a study of heart failure, hip fracture and colon cancer patients in Canada found patients treated at high-spending hospitals were less likely to die or make a repeat visit to the hospital.
You can follow Melanie Evans on Twitter: @MHmevans.
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