Study: Teaching hospitals are no more expensive than nonteaching ones
Wednesday, June 19, 2019
While the perception may be otherwise, the facts tell us something different: Major teaching hospitals are less expensive compared with nonteaching hospitals over the course of an entire episode of care and the costs incurred at 30 days, researchers found. This the major finding after researchers analyzed 1.2 million Medicare hospitalizations for common medical and surgical conditions.
But what we think we know as common knowledge is not necessarily the truth. Indeed, it’s anything but in this case.
In the world of teaching hospitals, major and minor differed little in regard to cost; similarly, nonteaching hospitals are not any less expensive, either. In fact, the costs of each are similar.
Researchers said that when they expanded the "time window" to 90 days into the episode of care for a surgical procedure and subsequent treatment, spending at major teaching hospitals was actually lower on post-acute care and readmissions than nonteaching hospitals. Initial hospitalizations were more expensive, however.
Many think that Hollywood dramatized teaching hospitals as the most expensive option, and this perception has led to efforts to curb these costs, including through legislative oversight and policymakers pushing for reform.
According to the study published in JAMA Network Open: Researchers argued the findings are important because "little empirical work has been performed on whether teaching hospitals are more expensive when considering total costs of care for an acute care episode."
The analysis of more than 1.2 million hospitalizations among Medicare beneficiaries age 65 years or older showed that adjusted total 30-day standardized costs were $18,605 at major teaching hospitals versus $18,873 at nonteaching hospitals.
"These findings are surprising," senior author Ashish Jha, director of the Harvard Global Health Institute and K.T. Li professor of global health at Harvard T.H. Chan School of Public Health, said in a press release. "We always assumed that we had to trade-off the better outcomes at teaching hospitals with higher costs. It appears that, at least as far as Medicare is concerned, their payments for care are actually a bit less when patients go to a teaching hospital."
Compared to nonteaching hospitals, major teaching hospitals spent an average of $245 and $244 less on post-acute care and readmission services, respectively, during a 30-day episode, researchers reported.
The study authors said that more research is needed to better understand the link between the lower-than-expected costs versus the perception otherwise.
The researchers, include those who are affiliated with the Harvard T.H. Chan School of Public Health and Beth Israel Deaconess Medical Center, were "surprised to find lower readmission costs for patients treated at teaching hospitals."
"Prior work suggests that mortality rates are lower at teaching hospitals; therefore, some of the sickest patients who might have died at other hospitals are likely surviving at teaching institutions. Thus, one would expect that their readmission costs would be higher," the study said.
There are more than 1,000 teaching hospitals in the U.S., according to the American Hospital Association. These hospitals train and educate healthcare professionals.
"These findings support efforts that might shift payments away from individual services toward clinical episodes across the entire care spectrum," the study said.
The study was funded by the Association of American Medical Colleges.
"These findings support the idea that to truly understand variation in healthcare costs, it's important to look not at just what happens in the hospital but on total spending for an acute episode," stated first author Laura Burke, assistant professor of emergency medicine at Harvard Medical School and Beth Israel Deaconess Medical Center and instructor in the Department of Health Policy and Management at Harvard Chan School.
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