Hospitals that spend more on emergency care, inpatient care yield better outcomes

Hospitals see better outcomes when they invest more on inpatient care and rely less on downstream providers after discharge. (MIT)

An MIT study suggests hospitals get more bang for their buck when they spend money on emergency care versus long-term care.

The study, which was published in the current issue of Journal of Health Economics, compared data on outcomes between hospitals that make a substantial upfront investment in inpatient care after a patient experiences an emergency with those that rely more heavily upon skilled nursing facilities and other long-term care options postdischarge.

“We find that patients who go to hospitals that rely more on skilled nursing facilities after discharge, as opposed to getting them healthy enough to return home, are substantially less likely to survive over the following year,” says Joseph Doyle, Erwin H. Schell Professor of Management at the MIT Sloan School of Management, in an article posted on MIT’s news site.

The study sought to weed out inefficiencies in hospital spending that contribute to the higher per capita cost of healthcare in the United States compared to the rest of the world. Statistics from the Organisation for Economic Co-operation and Development peg spending in the United States at 40% higher than the next-highest spender, which MIT notes has led to questions about “significant inefficiencies” in terms of where all that money gets spent.

When the high costs of care get passed along to patients, they can cause a ripple effect in terms of overall population health. In one survey, as many as one in four Americans said they chose to forgo medical care because of prohibitive costs.

The MIT study found that hospitals that spent approximately $8,500 above the average 90-day spend of $27,500 per patient saw a two-percentage-point decrease in their patients’ mortality risk. That compares to findings of a five-percentage-point increase in mortality when hospitals focus their spending on postdischarge nursing facilities.

Doyle suggests these results could form the basis of a new quality metric looking at hospitals with worse outcomes and a higher proportion of downstream spending.