Healthcare News & Insights

Do lower costs = lower quality of care?

It’s a question of utmost importance as the country debates what the health care system should look like: Do hospitals that spend less do so at the risk of providing poorer care?

According to a new study by University of Michigan researchers, the answer is: Probably not.

The researchers observed more than 3,000 patients for 30 days after they were discharged. All the patients were diagnosed with either congestive heart failure (CHF) or pneumonia.

The study found wide variances between what the lowest-cost and highest-cost hospitals typically spent per patient. Lowest cost hospitals spent just $1,522 on CHF patients and $1,897 on pneumonia patients. Their high-cost peers spent $18,927 and $15,829 respectively.

But the higher costs didn’t necessarily equate to higher quality of care scores, lower readmission rates or lower mortality.

Among the CHF patients:

  • Those at low-cost hospitals had a readmission rate of 24.7% vs. 22.0% for high-cost hospitals.
  • Quality of care scores for low-cost and high-cost hospitals were 85.5% and 89.9% respectively.
  • Mortality rates were 10.8% at low-cost hospitals and 9.8% at high-cost facilities.

Among the pneumonia patients:

  • Readmission rates were 17.9% at low-cost hospitals, and 17.3% high-cost ones.
  • Quality of care scores at low-cost facilities were 86.6% compared to 85.5% at high-cost hospitals.

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  1. “Incidence and Prevalence
    According to the American Heart Association, nearly 5 million people experience heart failure and about 550,000 new cases are diagnosed each year in the United States. ”

    Throw these numbers in your percentages and see if a lower cost hospital still make sense…