High-Quality Care May Cost Medicare Less Than Low-Quality Care

High-quality hospitals cost Medicare $2700 less within 30 days of a patient’s major surgery.

A recent study found that Medicare beneficiaries who had surgery at a high-quality hospital cost less than beneficiaries who had surgery at a low-quality hospital.

The discrepancy discovered was primarily due to post-operative costs of care.

“In much of healthcare, better care costs more money but surgery may be 1 situation in which getting care at a high-quality hospital not only saves lives, but also saves money,” said senior study author Ashish Jha, MD, MPH. “And that is a win for everyone.”

In the study, published in Health Affairs, investigators analyzed Medicare costs and outcome data from 2011 to 2012 for major surgical procedures, such as coronary artery bypass grafting, pulmonary lobectomy, endovascular repair of abdominal aortic aneurysm, colectomy, and hip replacement.

Costs of the procedures were calculated prior to the surgery for 110,625 beneficiaries, and after the surgery for 93,864 beneficiaries. Costs were calculated at 30- and 90-day periods.

The investigators determined the quality of the hospital through 30-day surgical mortality rates and patient-reported experiences. They discovered that initial hospitalization and the first 30 days of care cost Medicare an average of $32,000, but the cost varied for each hospital and procedure.

Medicare spent $2700 less within the first 30 days when patients underwent surgery at a high-quality hospital, and $2200 less at 90 days, compared with costs from a low-quality hospital. Lower use of post-acute care services, such as rehabilitation facility use and home health aides, drove the cost down by approximately two-thirds for patients who received care at a high-quality hospital compared with those using a low-quality hospital, according to the study.

Both surgery and prescription drugs cost more in the United States than any other country. Choosing care at a higher-quality hospital may present Medicare with an opportunity to save money, while providing better care for patients.

“Of course, it is worth remembering that the goal of healthcare is not to save money, but to save lives,” Dr Jha concluded. “These high-quality hospitals, which had lower spending, had mortality rates that were less than half of what we saw at the low-quality hospitals. The findings should provide real impetus for policymakers to help patients choose high-quality hospitals.”

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