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Good Hospital Care Benefits Insurers

MANAGED CARE February 2011. © MediMedia USA
News and Commentary

Good Hospital Care Benefits Insurers

MANAGED CARE February 2011. ©MediMedia USA

That one region spends more on medical care than another doesn’t always translate into better health outcomes. What does make a difference is how those dollars are used, especially when it comes to hospital spending and care, according to a recent study in the Annals of Internal Medicine.

“A managed care executive, who helps build a plan’s provider network and member benefits may be reluctant to include higher cost providers in preferred tiers,” says John Romley, PhD, an author of the study and an economist at the Schaeffer Center for Health Policy and Economics at the University of Southern California.

“Our findings suggest that while regions spending more on health care generally produce no better care, specific types of medical spending, such as acute-care hospital spending, may save lives,” he says.

When hospitalized for a major acute condition — like heart attack, stroke, or pneumonia — patients were less likely to die in high-spending hospitals.

“At least for hospital care, from a managed care standpoint, there is some value, some bang for the buck,” says Romley.

He adds, however, that “we haven’t shown, with the data that we collected, that it’s the most cost-effective place to put your money. One shouldn’t assume that higher spending providers aren’t providing any value.”

Researchers reviewed discharge records for more than 2.5 million patients admitted to 208 California hospitals from 1999 to 2008 with 1 of 6 major medical conditions: heart attack, congestive heart failure, acute stroke, gastrointestinal hemorrhage, hip fracture, or pneumonia.

They found that as hospital spending went up, the risk of dying in the hospital from the condition that caused hospitalization went down.

For example, from 2004 to 2008, the researchers found that patients admitted for heart attack to the top-spending hospitals were 19 percent less likely to die than patients admitted to the lowest-spending hospitals.

From 1999 to 2003, patients admitted for heart attack were 9 percent less likely to die at the highest-spending hospitals than at the lowest-spending hospitals.