Study: Costly Health Care Not Necessarily Best

A new study says paying less for hospital care doesn't necessarily mean you get lower-quality care. The study's lead author, Dr. Lena Chen, a clinical lecturer at the University of Michigan Health System, says they would like to understand why there is a "huge range" in costs between hospitals.

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ROBERT SIEGEL, host:

Does paying less for hospital care mean that you get lower quality care? Well, according to a new study in the archives of internal medicine the answer is not necessarily. Dr. Lena Chen is a clinical lecturer at the University of Michigan Health System in Ann Arbor. She was the lead author of that study and she joins us now from member station WUOM. Dr. Chen, welcome to the program.

Dr. LENA CHEN (Clinical Lecturer, University of Michigan Health System): Hi.

SIEGEL: Your study examines the records of care for congestive heart failure patients - all of them Medicare patients - in more than 3,000 hospitals. Tell us what you found.

Dr. CHEN: Well, we found that the cost of caring for a patient does not necessarily correlate with the quality of care delivered. So, for same conditions such as congestive heart failure, higher-cost hospitals provided higher quality care. But for other conditions such as pneumonia, the converse was true.

SIEGEL: You mean, that actually lower cost hospitals for some conditions in the end provided better care than higher cost hospitals.

Dr. CHEN: Yes. Although the differences were very small in terms of quality differences between the high and the low cost hospitals.

SIEGEL: Some of the ranges in price for treating the same ailment are pretty stunning here. For example, for congestive heart failure, you have a range of what was the cheapest and what was the most expensive?

Dr. CHEN: For congestive heart failure, the cheapest was $1,522, and the highest was $18,927.

SIEGEL: Eighteen thousand?

Dr. CHEN: Yes, it's definitely a huge range and we'd like to understand why there is such a range between hospitals.

SIEGEL: But what's driving that difference? Is it how many days you spend in the hospital? Is it how many people are checking up on you, medication, what's doing it?

Dr. CHEN: In part, it is probably the length of stay so - we found that the higher cost hospitals did have longer length of stay meaning the patient was in the hospital for a longer period of time. But beyond that we were unable to identify the specific reasons why high-cost hospitals cost more. Some of the reasons could be what you mention, such as different testing patterns.

SIEGEL: Does part of the country figure in it? I mean, are there just places where medical care is much more expensive because of, you know, real estate or utilities cost for the hospital?

Dr. CHEN: We did try to factor in the wages of a particular area. So, for example, a hospital in New York City versus a hospital in a small town, their wages might be slightly different. So, we adjusted for that in our in defining what was a high-cost hospital.

SIEGEL: But the range that you just cited to us for the cost of congestive heart failure, I mean, you'd have to find the highest labor market in the world versus a very, very cheap one to account for that.

Dr. CHEN: That's true. Definitely, it's in part driven by what the hospital does. But we don't have an answer as to what that is. Some of it may also be driven by differences in patients seen by different hospitals. We did try to adjust for that. But there maybe some residual differences that we could not account for.

SIEGEL: When we say that the outcomes at hospitals that cost less, that charge less are no different or essentially no different than at the more expensive ones per hundred patients, I mean, how many more have a really bad outcome at the loser in that comparison?

Dr. CHEN: Yeah, I mean the mortality rates for congestive heart failure in the lowest cost hospital was 10.8 percent and in the highest-cost hospital it was 9.8 percent.

SIEGEL: So you're saying the ranges, whether 10 people or 11 people did not make it through treatment - which does sound pretty small - and the range of cost can be what you described as eight or nine fold in terms of cost?

Dr. CHEN: Right, there's a much bigger difference in dollars.

SIEGEL: So, if people are prone to think that, you know, some hospital must be good because people pay a lot to go there and be treated, that would be misguided, and to think that because that hospital is cheap doesn't mean you're going to some low-rent medical facility.

Dr. CHEN: That is true. And I think that when you're going to a hospital, if you have the luxury of looking at the cost that it would be important to look at their quality measures as well, not just cost as a predictor of the type of care you're going to get.

SIEGEL: Dr. Lena Chen, clinical lecturer in the University of Michigan Health System in Ann Arbor, thank you very much for talking with us.

Dr. CHEN: Thank you very much.

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