Dive Brief:
- Patients who undergo surgeries in higher-quality hospitals incur lower thirty- and ninety-day spending vs. patients who undergo surgeries at lower-quality hospitals, according to a recent study led by the Harvard T.H. Chan School of Public Health.
- The difference in the study was primarily caused by the higher cost of care in the weeks after surgery for patients at lower-quality hospitals, which accounted for 59.5% of the difference in thirty-day episode spending, as well as re-admissions, which accounted for 19.9%.
- For patients at high-quality hospitals, Medicare saved about $2,700 during the first 30 days compared to patients at low-quality hospitals, and about $2,200 at 90 days after controlling for the differences in patient characteristics across high and low quality hospitals.
Dive Insight:
The study's results indicate that at least as far as major surgery is concerned, reducing spending while improving quality is a viable possibility.
By investing in high-quality care up front, savings may be seen downstream; better techniques and postoperative care may reduce complications, re-admissions, and visits for postacute care. "If this is the case, there would be substantial policy implications for Medicare and other payers," the study states.
The authors suggest this could provide an impetus for payers to strengthen incentives to either direct patients to higher-quality hospitals, or to drive the lower-quality hospitals to improve and reduce unnecessary use of post-acute care
"Our findings should offer assurance that an opportunity for achieving value in surgical care exists," the study states.
The findings bolster arguments in support of the alternative payment models ushered in since the Affordable Care Act, such as episode-based bundled payment. The authors argue that whether savings and quality improvement are actually realized under such models will depend largely on whether there are sufficient financial incentives for hospitals to improve their quality their coordination of post-acute care.