Big name, expensive hospitals don't necessarily provide best care

Hospitals' reputations and prices have little bearing on their care quality, according to a new study published in Health Affairs.

For the study, researchers analyzed almost 25,000 insurance claims from current and retired autoworkers in 10 metropolitan areas: Cleveland; Detroit; Indianapolis; Kansas City; St. Louis; Flint, Mich.; Warren, Mich.; Toledo, Ohio; Youngstown, Ohio and Buffalo, N.Y. The workers visited 110 hospitals, divided into three categories:

  • Thirty "low-price" hospitals, where prices were at least 10 percent below average;

  • Fifty "medium-price" hospitals, which were not defined in the study; and 

  • Thirty "high-price" hospitals, where prices were 10 percent or more above average.

High-priced hospitals were twice the size of low-priced ones, and had three times their market share, according to the researchers, led by Chapin White of the RAND Corporation. The expensive hospitals were also much more likely to be included in U.S. News & World Report's national hospital rankings. Twenty-five percent of high-priced hospitals appeared in the U.S. News rankings, while none of the low-priced ones appeared on any of the publication's lists, according to the study.

More qualitative data, however, painted a somewhat different picture, according to the researchers. For example, high-priced hospitals did no better than their lower-priced counterparts in keeping pneumonia and heart attack patients alive. However, low-priced hospitals did better in other areas--such as 30-day readmissions and preventing blood clots or death among surgical patients, according to the study.

White and his team noted that while more expensive hospitals might provide higher-quality specialized care, existing quality measures focus on routine patient experience. At the surface level, expensive hospitals' prices seemed justified, according to researchers. They were more likely to treat sicker, lower-income patients and offer specialized services, and operated at an average loss of 2.8 percent, compared to a 1.5 percent profit margin for lower-priced ones. However, when researchers factored in other income sources, such as investments and donations, there was no significant difference in operating margins.

U.S. News recently announced it will alter its methodology for hospital rankings, placing more emphasis on patient safety and less on hospital reputation, FierceHealthcare previously reported.

To learn more:
- here's the study abstract

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