Hospital quality and intensity of spending: is there an association?

Abstract

Numerous studies in the United States have examined the association between quality and spending at the regional level. In this paper we evaluate this relationship at the level of individual hospitals, which are a more natural unit of analysis for reporting on and improving accountability. For all of the quality indicators studied, the association with spending is either nil or negative. The absence of positive correlations suggests that some institutions achieve exemplary performance on quality measures in settings that feature lower intensity of care. This finding highlights the need for reporting information on both quality and spending.

EXHIBIT 2. Percentile Of Quality, By Quintile Of Spending, All Hospitals, 2004–2007

SOURCE: Authors’ analysis (see text for complete details). NOTES: Spending is measured as total end-of-life spending on chronically ill Medicare decedents in their last two ears of life, adjusted for prices. AMI is acute myocardial infarction. **** p < 0.001

EXHIBIT 3. Percentile Of Quality, By Quintile Of Spending, Academic Medical Centers, 2004–2007

SOURCE: Authors’ analysis (see text for complete details). NOTES: Spending is measured as total end-of-life spending on chronically ill Medicare decedents in their last two years of life, adjusted for prices. AMI is acute myocardial infarction. * p < 0.10 *** p < 0.01

EXHIBIT 4. Performance Across Quintiles Of Spending, Adjusting For Hospital Referral Regions (HRRs), 2004–2007

SOURCE: Authors’ analysis (see text for complete details). NOTES: Spending is measured as total end-of-life spending on chronically ill Medicare decedents in their last two years of life, adjusted for prices. AMI is acute myocardial infarction. ** p < 0.05 **** p < 0.001

EXHIBIT 5. Percentile Ranking And Spending For Individual Hospitals In New York (Manhattan And The Bronx) And Los Angeles, 2004–2007

SOURCE: Authors’ analysis (see text for complete details). NOTE: Spending is measured as total end-of-life spending on chronically ill Medicare decedents in their last two years of life, adjusted for prices.