Higher hospital spending leads to increased survival rates

Healthcare reformers who support the patient-centered medical home and accountable care organization concepts have been pushing the idea that it's possible to cut healthcare spending and get better outcomes for patients. But a new study in the Annals of Internal Medicine suggests that the opposite is true for select life-threatening conditions: More spending on healthcare improves patient outcomes.

The study concludes that hospitals that spend more have lower inpatient death rates for six common medical conditions. The research team focused on life-threatening conditions that require hospitalization: heart attack, congestive heart failure, acute stroke, GI hemorrhage, hip fracture and pneumonia.

"We were struck by our results," said John Romley, lead author and an economist with the Schaeffer Center for Health Policy and Economics at USC.

Dr. Anthony Cardillo, an emergency medicine and internal medicine specialist who was not part of the research team, said the study results "make complete sense." Better staffing whether with more physicians or more secretaries and lab technicians can speed consultations or lab test turnaround time.

And expedited patient care can lead to better outcomes, he said. More money spent on research on new protocols, procedures and medication may improve patient survival at a higher-spending hospital compared to a lower-spending hospital that may skip such investments.

Researchers discovered the trend after analyzing 2.5 million records of patients admitted to 208 California hospitals between 1999 and 2008, USC Annenberg reports.

An earlier seminal Annals of Internal Medicine article from 2003 did not find a correlation between higher spending and better health.

To learn more:
- read the abstract from the Annals of Internal Medicine
- read the article from USC Annenberg
- here's the 2003 article abstract from the Annals of Internal Medicine

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