The Trade-off Between Hospital Cost and Quality of Care

Morey, Richard C.; Fine, David J.; Loree, Stephen W.; Retzlaff-Roberts, Donna; Tsubakitani, Shigeru

doi:10.1097/00005650-199208000-00002

Cited by 79 publications

(42 citation statements)

References 10 publications

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“…5,21 Fewer studies have examined the empirical relationship between costs and quality of care. [22][23][24][25][26][27][28] These studies shed light on whether higher costs are, on average, associated with better quality of care and whether hospitals' efforts to reduce costs may have adverse effects on quality. In each of these studies, the measures of quality and costs are averaged across patients within each hospital, which precludes consideration of the relationship between costs and quality for specific hospitals.…”

Section: The Correlation Between Outcomes and Costsmentioning

confidence: 99%

Variations in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected data

Street

Gutacker

Bojke

et al. 2014

Health Services and Delivery Research

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BackgroundIt is important that NHS resources are used to their full extent, but efforts to reduce costs may have an adverse effect on patient outcomes. Our research is designed to provide a better understanding of the inter-relationship between costs and health outcomes among NHS providers (hospitals) for common surgical procedures.ObjectivesIn England, patient-reported outcomes measures (PROMs) are collected from patients undergoing one of four elective procedures: unilateral hip replacement, unilateral knee replacement, groin hernia repair and varicose vein surgery. We identify variation in patient-reported outcomes (PROs) across hospitals, assess the relationship between the cost and outcomes among NHS hospitals for these procedures, and determine the extent to which variations in outcomes and costs are due to differences in hospital performance.Data sourcesWe link Hospital Episode Statistics (HES) data with reference cost data and PROM data for patients having the four treatments between April 2009 and March 2010.MethodsThe first part of the empirical analysis focuses on variation in different dimensions of self-reported health status. We argue that each of the EuroQol-5D questionnaire (EQ-5D; European Quality of Life-5 Dimensions) dimensions should be assessed separately. Our graphical summary of the differential impact that hospitals have on PROs indicates the probability of reporting a given health outcome and shows how these probabilities vary across EQ–5D dimensions and hospitals. The second part of the empirical analysis focuses on the performance of hospitals and the inter-relationship between PROs and resource use.ResultsWe find that poorer post-treatment health status is associated with lower initial health status, higher weighted Charlson score, more diagnoses and lower socioeconomic status. We find significantly unexplained variation among hospitals in outcomes for patients undergoing hip replacement, knee replacement or varicose vein surgery, but not for hernia patients. For all four treatments we find significant unexplained variation in resource use among hospitals, whether measured by cost of treatment or length of stay. This suggests that hospitals can improve their utilisation of resources.LimitationsOur analyses are based on the HES. If data are missing from the medical record, or extracted and coded inaccurately, HES will contain errors. Hospitals should minimise these errors. Our study suffers from a large number of missing data, mainly because some hospitals were better than others at administering the baseline survey.ConclusionsThere is no general evidence that hospitals with lower resource use have worse health outcomes. There is a significant positive correlation for varicose veins, but this is sensitive to the choice of resource use and PRO measures. For hip and knee replacement the correlation is either insignificant or negative (depending on the resource use and PRO measures), implying that promoting health outcomes and controlling costs are not contradictory objectives. Indeed, we are able to identify hospitals with better than expected outcomes where resource use is below average. Future research should address how to handle missing data, evaluate hospital performance within the broader health economy, communicate PROMs to prospective patients, evaluate the impact of PROMs on patient choice and provider behaviour and evaluate PROMs for people with chronic conditions.FundingThe National Institute for Health Research Health Service and Delivery Research programme.

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Section: The Correlation Between Outcomes and Costsmentioning

confidence: 99%

Variations in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected data

Street

Gutacker

Bojke

et al. 2014

Health Services and Delivery Research

View full text Add to dashboard Cite

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“…McClellan and Staiger (2000) also suggest that the growing difference in mortality rates of the elderly AMI patients between for-profit and not-for-profit hospitals may be attributed to various factors, including location. Hospitals compete by providing better quality even though improving quality can be very costly (Morey et al, 1992). Fournier and Mitchell (1992) and Robinson and Luft (1985) suggest that increased competition is usually associated with increased cost.…”

Section: Literature Reviewmentioning

confidence: 99%

Hospital treatment rates and spillover effects: Does ownership matter?

Baltagi

Yen

2014

Regional Science and Urban Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may

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“…Morey et al [9] took a similar approach, using data for 300 hospitals in 1983 to study how mortality outcomes were related to efficient costs, as identified by Data Envelopment Analysis. The results indicated that a 1% increase in the ratio of observed to predicted deaths resulted in a 1.34% increase in efficient cost.…”

Section: Previous Researchmentioning

confidence: 99%

Cost inefficiency and mortality rates in Florida hospitals

Deily

McKay

2006

Health Econ.

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This study examines the relationship between health outcomes and cost inefficiency in Florida hospitals over the period 1999-2001, with health outcomes measured by risk-adjusted in-hospital mortality rates. Previous research has come to conflicting conclusions regarding the relationship between costs and health outcomes. We hypothesize that these seemingly conflicting findings are due to the fact that total cost has two components--cost that reflects the best use of resources under current circumstances and cost associated with waste or inefficiency. By isolating costs due to inefficiency, we can examine directly their relationship, if any, to hospital mortality rates, and begin to assess whether policies that create incentives for hospitals to increase efficiency have adverse effects on health outcomes. We regress an in-hospital mortality index for each hospital on a measure of the hospital's cost inefficiency, obtained from a stochastic cost frontier estimation, as well as on predicted mortality and a set of variables linked to mortality performance. Our results indicate a positive and significant relationship between a hospital's mortality performance and its inefficiency: on average, a one percentage point reduction in cost inefficiency would be associated with one fewer in-hospital death per 10,000 discharges, holding patient risk and other factors constant.

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The Trade-off Between Hospital Cost and Quality of Care

Cited by 79 publications

References 10 publications

Variations in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected data

Variations in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected data

Hospital treatment rates and spillover effects: Does ownership matter?

Cost inefficiency and mortality rates in Florida hospitals

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