Hospital productivity better than previously thought

Despite previous research that claims otherwise, productivity at U.S. hospitals grew significantly between 2002 and 2011, according to a study published online in Health Affairs.

Researchers, led by John Romley of the Leonard D. Schaeffer Center for Health Policy and Economics, sought to improve on previous studies indicating hospital productivity had lagged behind that of other industries. These studies, they wrote, did not adjust for quality of care or severity of patient illness. To factor in these aspects, Romley and his team analyzed productivity growth among hospitals for treatment of Medicare patients with pneumonia, heart failure and heart attack between 2002 and 2011.

The researchers' analysis found annual productivity growth of 0.78 percent for heart attacks, 0.62 percent for heart failure and 1.9 percent for pneumonia, rates that all appear negative before adjustment, according to the study. Pre-adjustment, the rates were -0.64 for heart attacks, -0.91 percent for heart failure and 0.39 percent for pneumonia. The authors attribute these negative trends to rising treatment costs during the study period, and found a more positive productivity trend over time, possibly due to lower growth in healthcare spending in the latter part of the study period.

"The pattern of growth documented here suggests that in recent years, hospitals have not suffered from a so-called cost disease, where heavy reliance on labor limits opportunities for efficiencies stemming from technological improvement," the authors wrote. "Our study finds that concerns about linking provider payment to economy-wide productivity growth may be overstated."

The findings also indicate fears about the Affordable Care Act's effect on Medicare payment policy may be overblown, the authors write.

A January study, also published in Health Affairs, found that staff makeup also plays a major role in hospital productivity, with providers that employ more non-physician staff seeing improved productivity, FierceHealthcare previously reported. This mix of staffers is far more common among rural providers, the study found.

To learn more:
- read the study abstract