Do bad report cards have consequences? Impacts of publicly reported provider quality information on the CABG market in Pennsylvania

Separating the wheat from the chaff: How to measure hospital quality in routine data?

OBJECTIVE

To measure hospital quality based on routine data available in many health care systems including the United States, Germany, the United Kingdom, Scandinavia, and Switzerland.

DATA SOURCES AND STUDY SETTING

We use the Swiss Medical Statistics of Hospitals, an administrative hospital dataset of all inpatient stays in acute care hospitals in Switzerland for the years 2017-2019.

STUDY DESIGN

We study hospital quality based on quality indicators used by leading agencies in five countries (the United States, the United Kingdom, Germany, Austria, and Switzerland) for two high-volume elective procedures: inguinal hernia repair and hip replacement surgery. We assess how least absolute shrinkage and selection operator (LASSO), a supervised machine learning technique for variable selection, and Mundlak corrections that account for unobserved heterogeneity between hospitals can be used to improve risk adjustment and correct for imbalances in patient risks across hospitals.

DATA COLLECTION/EXTRACTION METHODS

The Swiss Federal Statistical Office collects annual data on all acute care inpatient stays including basic socio-demographic patient attributes and case-level diagnosis and procedure codes.

PRINCIPAL FINDINGS

We find that LASSO-selected and Mundlak-corrected hospital random effects logit models outperform common practice logistic regression models used for risk adjustment. Besides the more favorable statistical properties, they have superior in- and out-of-sample explanatory power. Moreover, we find that Mundlak-corrected logits and the more complex LASSO-selected models identify the same hospitals as high or low-quality offering public health authorities a valuable alternative to standard logistic regression models. Our analysis shows that hospitals vary considerably in the quality they provide to patients.

CONCLUSION

We find that routine hospital data can be used to measure clinically relevant quality indicators that help patients make informed hospital choices.

The impact of hospital price and quality transparency tools on healthcare spending: a systematic review

BACKGROUND

Global spending on health was continuing to rise over the past 20 years. To reduce the growth rates, alleviate information asymmetry, and improve the efficiency of healthcare markets, global health systems have initiated price and quality transparency tools in the hospital industry in the last two decades. OBJECTIVE : The objective of this review is to synthesize whether, to what extent, and how hospital price and quality transparency tools affected 1) the price of healthcare procedures and services, 2) the payments of consumers, and 3) the premium of health insurance plans bonding with hospital networks.

METHODS

A literature search of EMBASE, Web of Science, Econlit, Scopus, Pubmed, CINAHL, and PsychINFO was conducted, from inception to Oct 31, 2021. Reference lists and tracked citations of retrieved articles were hand-searched. Study characteristics were extracted, and included studies were scored through a risk of bias assessment framework. This systematic review was reported according to the PRISMA guidelines and registered in PROSPERO with registration No. CRD42022319070.

RESULTS

Of 2157 records identified, 18 studies met the inclusion criteria. Near 40 percent of studies focused on hospital quality transparency tools, and more than 90 percent of studies were from the US. Hospital price transparency reduced the price of laboratory and imaging tests except for office-visit services. Hospital quality transparency declined the level or growth rates of healthcare spending, while it adversely and significantly raised the price of healthcare services and consumers' payment in higher-ranked or rated facilities, which was referred to as the reputation premium in the healthcare industry. Hospital quality transparency not only leveraged private insurers bonding with a higher-rated hospital network to increase premiums, but also induced their anticipated pricing behaviors.

CONCLUSION

Hospital price and quality transparency was not effective as expected. Future research should explore the understudied consequences of hospital quality transparency programs, such as the reputation/rating premium and its policy intervention.

Measuring quality effects in equilibrium

Unlike demand studies in other industries, models of provider demand in health care often must omit a price, or any other factor that equilibrates the market such as a waiting time. Estimates of the consumer response to quality may consequently be attenuated, if the limited capacity of individual physicians prevents some consumers from obtaining higher quality. We propose a tractable method to address this problem by adding a congestion effect to standard discrete-choice models. We show analytically how this can improve forecasts of the consumer response to quality. We then apply this method to the market for heart surgery, and find that the attenuation bias in estimated quality effects can be important empirically.

Comparing the Impact of Online Ratings and Report Cards on Patient Choice of Cardiac Surgeon: Large Observational Study

Background

Patients may use two information sources about a health care provider’s quality: online physician reviews, which are written by patients to reflect their subjective experience, and report cards, which are based on objective health outcomes.

Objective

The aim of this study was to examine the impact of online ratings on patient choice of cardiac surgeon compared to that of report cards.

Methods

We obtained ratings from a leading physician review platform, Vitals; report card scores from Pennsylvania Cardiac Surgery Reports; and information about patients’ choices of surgeons from inpatient records on coronary artery bypass graft (CABG) surgeries done in Pennsylvania from 2008 to 2017. We scraped all reviews posted on Vitals for surgeons who performed CABG surgeries in Pennsylvania during our study period. We linked the average overall rating and the most recent report card score at the time of a patient’s surgery to the patient’s record based on the surgeon’s name, focusing on fee-for-service patients to avoid impacts of insurance networks on patient choices. We used random coefficient logit models with surgeon fixed effects to examine the impact of receiving a high online rating and a high report card score on patient choice of surgeon for CABG surgeries.

Results

We found that a high online rating had positive and significant effects on patient utility, with limited variation in preferences across individuals, while the impact of a high report card score on patient choice was trivial and insignificant. About 70.13% of patients considered no information on Vitals better than a low rating; the corresponding figure was 26.66% for report card scores. The findings were robust to alternative choice set definitions and were not explained by surgeon attrition, referral effect, or admission status. Our results also show that the interaction effect of rating information and a time trend was positive and significant for online ratings, but small and insignificant for report cards.

Conclusions

A patient’s choice of surgeon is affected by both types of rating information; however, over the past decade, online ratings have become more influential, while the effect of report cards has remained trivial. Our findings call for information provision strategies that incorporate the advantages of both online ratings and report cards.

Hospital report cards: Quality competition and patient selection

Hospital 'report cards' policies involve governments publishing information about hospital quality. Such policies often aim to improve hospital quality by stimulating competition between hospitals. Previous empirical literature lacks a comprehensive theoretical framework for analysing the effects of report cards. We model a report card policy in a market where two hospitals compete for patients on quality under regulated prices. The report card policy improves the accuracy of the quality signal observed by patients. Hospitals may improve their published quality scores by costly quality improvement or by selecting healthier patients to treat. We show that increasing information through report cards always increases quality and only sometimes induces selection. Report cards are more likely to increase patient welfare when quality scores are well risk-adjusted, where the cost of selecting patients is high, and the cost of increasing quality is low.

Patient selection in the presence of regulatory oversight based on healthcare report cards of providers: the case of organ transplantation

Many healthcare report cards provide information to consumers but do not represent a constraint on the behavior of healthcare providers. This is not the case with the report cards utilized in kidney transplantation. These report cards became more salient and binding, with additional oversight, in 2007 under the Centers for Medicare and Medicaid Services Conditions of Participation. This research investigates whether the additional oversight based on report card outcomes influences patient selection via waiting-list registrations at transplant centers that meet regulatory standards. Using data from a national registry of kidney transplant candidates from 2003 through 2010, we apply a before-and-after estimation strategy that isolates the impact of a binding report card. A sorting equilibrium model is employed to account for center-level heterogeneity and the presence of congestion/agglomeration effects and the results are compared to a conditional logit specification. Our results indicate that patient waiting-list registrations change in response to the quality information similarly on average if there is additional regulation or not. We also find evidence of congestion effects when spatial choice sets are smaller: new patient registrations are less likely to occur at a center with a long waiting list when fewer options are available.

Is great information good enough? Evidence from physicians as patients

We place an upper bound on the degree to which policies aimed at improving the information deficiencies of patients may lead to greater adherence to clinical guidelines and recommended practices. To do so, we compare the degree of adherence attained by a group of patients that should have the best possible information on health care practices-i.e., physicians as patients-with that attained by a comparable group of non-physician patients, taking various steps to account for unobservable differences between the two groups. Our results suggest that physicians, at best, do only slightly better in adhering to both low- and high-value care guidelines than non-physicians.

Going the Extra Mile? How Provider Network Design Increases Consumer Travel Distance, Particularly for Rural Consumers

CONTEXT

The practical accessibility to medical care facilitated by health insurance plans depends not just on the number of providers within their networks but also on distances consumers must travel to reach the providers. Long travel distances inconvenience almost all consumers and may substantially reduce choice and access to providers for some.

METHODS

The authors assess mean and median travel distances to cardiac surgeons and pediatricians for participants in (1) plans offered through Covered California, (2) comparable commercial plans, and (3) unrestricted open-network plans. The authors repeat the analysis for higher-quality providers.

FINDINGS

The authors find that in all areas, but especially in rural areas, Covered California plan subscribers must travel longer than subscribers in the comparable commercial plan; subscribers to either plan must travel substantially longer than consumers in open networks. Analysis of access to higher-quality providers show somewhat larger travel distances. Differences between ACA and commercial plans are generally substantively small.

CONCLUSIONS

While network design adds travel distance for all consumers, this may be particularly challenging for transportation-disadvantaged populations. As distance is relevant to both health outcomes and the cost of obtaining care, this analysis provides the basis for more appropriate measures of network adequacy than those currently in use.

Do-not-resuscitate orders and readmission among elderly patients with heart failure in Pennsylvania: An observational study, 2011 - 2014

BACKGROUND

Readmissions for patients with heart failure (HF) continues to be a target of value-based purchasing initiatives. Do-not-resuscitate (DNR) orders-one part of advance care planning (ACP)-have been shown to be related to other patient outcomes but has not been explored as a risk factor for HF readmission.

OBJECTIVES

Examine the association between DNR and 30-day readmissions among elderly patients with HF admitted to hospitals in Pennsylvania.

METHODS

Data included hospital discharges from 2011 to 2014 of patients 65+ years with a primary diagnosis of HF. Logistic regression was used to model the relationship between DNR and 30-day readmission.

RESULTS

Among 107,806 patients, 20.9% were readmitted within 30 days. After controlling for covariates, patients with HF who had a DNR were less likely to be readmitted to the hospital (OR=0.85, 95% CI: 0.80-0.91, p<0.001).

CONCLUSIONS

Documentation of a DNR may inform efforts to reduce readmissions among elderly patients with HF.

Determinants of nursing home choice: Does reported quality matter?

Quality report cards addressing information asymmetry in the health care market have become a popular strategy used by policymakers to improve the quality of care for older people. Using individual level data from the largest German sickness fund merged with institutional level data, we examine the relationship between reported nursing home quality, as measured by recently introduced report cards, nursing home prices, nursing home's location, and the individual choice of nursing homes. Report cards were stepwise introduced as of 2009, and we use a sample of 2010 that includes both homes that had been evaluated at that time and that had not yet been. Thus, we can distinguish between institutions with above and below average ratings as well as nonrated nursing homes. We find that the probability of choosing a nursing home decreases in distance and price. However, we find no economically significant effect of reported quality on individuals' choice of nursing homes.

The Impact of Public Performance Reporting on Market Share, Mortality, and Patient Mix Outcomes Associated With Coronary Artery Bypass Grafts and Percutaneous Coronary Interventions (2000-2016): A Systematic Review and Meta-Analysis

Supplemental Digital Content is available in the text.

Objective:

Public performance reporting (PPR) of coronary artery bypass graft (CABG) and percutaneous coronary intervention (PCI) outcomes aim to improve the quality of care in hospitals, surgeons and to inform consumer choice. Past CABG and PCI studies have showed mixed effects of PPR on quality and selection. The aim of this study was to undertake a systematic review and meta-analysis of the impact of PPR on market share, mortality, and patient mix outcomes associated with CABG and PCI.

Methods:

Six online databases and 8 previous reviews were searched for the period 2000–2016. Data extraction, quality assessment, systematic critical synthesis, and meta-analysis (where possible) were carried out on included studies.

Results:

In total, 22 relevant articles covering mortality (n=19), patient mix (n=14), and market share (n=6) outcomes were identified. Meta-analyses showed that PPR led to a near but not significant reduction in short-term mortality for both CABG and PCI. PPR on CABG showed a positive effect on market share for hospitals (3 of 6 studies) and low-performing surgeons (2 of 2 studies). Five of 6 PCI studies found that high-risk patients were less likely to be treated in States with PPR.

Conclusions:

There is some evidence that PPR reduces mortality rates in CABG/PCI-treated patients. The significance of there being no strong evidence, in the period 2000–2016, should be considered. There is need for both further development of PPR practice and further research into the intended and unintended consequences of PPR.

Defying public expectations: Publicly reported hospital scores do not always correlate with clinical outcomes

BACKGROUND

Publicly reported hospital scores are used by patients to make health care-related decisions; however, their relationship to clinical outcomes is unknown.

METHODS

Through the use of the New York Statewide Planning and Research Cooperative System database, the association between two commonly used scores (Healthgrades and Centers for Medicare & Medicaid Services Hospital Compare) and four clinical outcomes was evaluated in several surgical fields (general, colorectal, hepatobiliary, foregut, and bariatric).

RESULTS

After adjusting for patient-level factors, patients from facilities with greater Healthgrades scores were less likely to develop any complication after general surgery operations (P = .0013). Also, greater Healthgrades scores were associated with less 30-day readmissions and emergency department visits for general surgery operations only (P = .0061 and P = .0013, respectively). In addition, greater Healthgrades scores were significantly associated with a lesser hospital length of stay for colorectal, foregut, and general surgery operations. Greater Centers for Medicare & Medicaid Services Hospital Compare scores were significantly associated with less 30-day readmissions and lesser hospital length of stay for specific operative groups.

CONCLUSION

Although some specialties demonstrated a correlation, there was no consistent relationship between publicly reported hospital scores and surgical outcomes that contributed to clinically meaningful use for patients or operations.

Quality-based ratings in Medicare and trends in kidney transplantation

OBJECTIVE

To assess the relationship between the 2007 Medicare regulation enforcing quality standards for transplant centers and trends in kidney transplantation.

DATA SOURCES

Transplant centers' biannual reports and the national registry for kidney transplantation from 2003 to 2010.

STUDY DESIGN

Non-compliant (low-performing) centers were compared with centers in compliance with quality standards according to: number of transplants, waiting-list registrations, and rates of graft failures, transfers, and deaths. Multivariate regressions were estimated to evaluate the association between the regulation and transplantation outcomes.

DATA EXTRACTION METHODS

Patient characteristics and outcomes were aggregated to six-month periods and linked to centers' reports.

PRINCIPAL FINDINGS

Relative to average-performing centers, 12 percent of transplants shifted away from low-performing centers and high-performing centers captured 6 percent of this decline. Low-performing centers experienced a 2-percentage point per period decline in 1-year graft failure rates and a 15-percent decrease in registrations post-regulation, whereas high-performing centers incurred a 5-percent decrease in registrations relative to average-performing centers.

CONCLUSIONS

Government oversight in kidney transplantation was associated with a small downward shift in overall kidney transplants. Reductions in graft failure rates at low-performing centers may imply an increase in quality or a decline in transplantation of either marginal organs or riskier patients; whereas reductions in registrations may indicate risk aversion toward high-risk patients. Policy makers should consider making less punitive requirements for programs, which employ new transplantation techniques to expand access.

Hospital Choice for Cataract Treatments: The Winner Takes Most

Background: Transparency in quality of care is an increasingly important issue in healthcare. In many international healthcare systems, transparency in quality is crucial for health insurers when purchasing care on behalf of their consumers, for providers to improve the quality of care (if necessary), and for consumers to choose their provider in case treatment is needed. Conscious consumer choices incentivize healthcare providers to deliver better quality of care. This paper studies the impact of quality on patient volume and hospital choice, and more specifically whether high quality providers are able to attract more patients.

Methods: The dataset covers the period 2006-2011 and includes all patients who underwent a cataract treatment in the Netherlands. We first estimate the impact of quality on volume using a simple ordinary least squares (OLS), second we use a mixed logit to determine how patients make trade-offs between quality, distance and waiting time in provider choice.

Results: At the aggregate-level we find that, a one-point quality increase, on a scale of one to a hundred, raises patient volume for the average hospital by 2-4 percent. This effect is mainly driven by the hospital with the highest quality score: the effect halves after excluding this hospital from the dataset. Also at the individual-level, all else being equal, patients have a stronger preference for the hospital with the highest quality score, and appear indifferent between the remaining hospitals.

Conclusion: Our results suggest that the top performing hospital is able to attract significantly more patients than the remaining hospitals. We find some evidence that a small share of consumers may respond to quality differences, thereby contributing to incentives for providers to invest in quality and for insurers to take quality into account in the purchasing strategy.

Can Urban-Rural Patterns of Hospital Selection Be Changed Using a Report Card Program? A Nationwide Observational Study

Background: Guiding patients to choose high-quality healthcare providers helps ensure that patients receive excellent care and helps reduce health disparities among patients of different socioeconomic backgrounds. The purpose of this study was to examine and compare the effect of implementing a report-card program on the patterns of hospital selection in patients from different socioeconomic subgroups. Patients undergoing total knee replacement (TKR) surgery were used as the sample population. Methods: A patient-level, retrospective, observational and cross-sectional study design was conducted. Taiwan National Health Insurance claims data were used and all patients in this database who had received TKR between April 2007–March 2008 (prior to report-card program implementation) and between April 2009–March 2010 (after program implementation) were included. Those patients who were under 18 years of age or who lacked area-of-residence or National Health Insurance premium information were excluded. Travelling distance to the hospital and level of hospital performance were used to evaluate the effect of the report-card program. Results: A total of 32,821 patients were included in this study. The results showed that patterns of hospital selection varied based on the socioeconomic characteristics of patients. In terms of travelling distance and hospital selection, the performance of urban and higher income patients was shorter and better, respectively, than their rural and lower-income peers both before and after report-card-program implementation. Moreover, although the results of multivariate analysis showed that the urban-rural difference in travelling distance enlarged (by 4.75 km) after implementation of the report-card program, this increase was shown to not be significantly related to this program. Furthermore, the results revealed that implementation of the report-card program did not significantly affect the urban-rural difference in terms of level of hospital performance. Conclusions: A successful report-card program should ensure that patients in all socioeconomic groups obtain comprehensive information. However, the results of this study indicate that those in higher socioeconomic subgroups attained more benefits from the program than their lower-subgroup peers. Ensuring that all have equal opportunity to access high-quality healthcare providers may therefore be the next issue that needs to be addressed and resolved.

Elements of Program Design in Medicare's Value-based and Alternative Payment Models: a Narrative Review

Increasing emphasis on value in health care has spurred the development of value-based and alternative payment models. Inherent in these models are choices around program scope (broad vs. narrow); selecting absolute or relative performance targets; rewarding improvement, achievement, or both; and offering penalties, rewards, or both. We examined and classified current Medicare payment models-the Hospital Readmissions Reduction Program (HRRP), Hospital Value-Based Purchasing Program (HVBP), Hospital-Acquired Conditions Reduction Program (HACRP), Medicare Advantage Quality Star Rating program, Physician Value-Based Payment Modifier (VM) and its successor, the Merit-Based Incentive Payment System (MIPS), and the Medicare Shared Savings Program (MSSP) on these elements of program design and reviewed the literature to place findings in context. We found that current Medicare payment models vary significantly across each parameter of program design examined. For example, in terms of scope, the HRRP focuses exclusively on risk-standardized excess readmissions and the HACRP on patient safety. In contrast, HVBP includes 21 measures in five domains, including both quality and cost measures. Choices regarding penalties versus bonuses are similarly variable: HRRP and HACRP are penalty-only; HVBP, VM, and MIPS are penalty-or-bonus; and the MSSP and MA quality star rating programs are largely bonus-only. Each choice has distinct pros and cons that impact program efficacy. Unfortunately, there are scant data to inform which program design choice is best. While no one approach is clearly superior to another, the variability contained within these programs provides an important opportunity for Medicare and others to learn from these undertakings and to use that knowledge to inform future policymaking.

Reputational concerns with altruistic providers

We study a model of reputational concerns when doctors differ in their degree of altruism and they can signal their altruism by their (observable) quality. When reputational concerns are high, following the introduction or enhancement of public reporting, the less altruistic (bad) doctor mimics the more altruistic (good) doctor. Otherwise, either a separating or a semi-separating equilibrium arises: the bad doctor mimics the good doctor with probability less than one. Pay-for-performance incentive schemes are unlikely to induce crowding out, unless some dimensions of quality are unobservable. Under the pooling equilibrium a purchaser can implement the first-best quality by appropriately choosing a simple payment scheme with a fixed price per unit of quality provided. This is not the case under the separating equilibrium. Therefore, policies that enhance public reporting complement pay-for-performance schemes.

Hospital Compare and Hospital Choice: Public Reporting and Hospital Choice by Hip Replacement Patients in Texas

The Centers for Medicare & Medicaid Services publicizes comparative performance data on Hospital Compare, a website maintained to support consumer decision making. Given the agency’s goal, this study investigates the relationship between public reporting and hospital choices of hip replacement patients in Texas. Estimating individual-level valuations of provider characteristics allowing for heterogeneity across patients, we find consumer selections and hospitals’ displayed performance vary together in time. Comparing associations involving public reporting with those associated with more readily observable hospital attributes, we conclude relationships coinciding with release of comparative performance data are modest, but not inconsequential. Our use of an empirical strategy novel for evaluation of public reporting has methodological implications, while the study’s affirmative result is of potential interest to policy makers and administrators.

Functionality and feedback: a realist synthesis of the collation, interpretation and utilisation of patient-reported outcome measures data to improve patient care

Background

The feedback of patient-reported outcome measures (PROMs) data is intended to support the care of individual patients and to act as a quality improvement (QI) strategy.

Objectives

To (1) identify the ideas and assumptions underlying how individual and aggregated PROMs data are intended to improve patient care, and (2) review the evidence to examine the circumstances in which and processes through which PROMs feedback improves patient care.

Design

Two separate but related realist syntheses: (1) feedback of aggregate PROMs and performance data to improve patient care, and (2) feedback of individual PROMs data to improve patient care.

Interventions

Aggregate – feedback and public reporting of PROMs, patient experience data and performance data to hospital providers and primary care organisations. Individual – feedback of PROMs in oncology, palliative care and the care of people with mental health problems in primary and secondary care settings.

Main outcome measures

Aggregate – providers’ responses, attitudes and experiences of using PROMs and performance data to improve patient care. Individual – providers’ and patients’ experiences of using PROMs data to raise issues with clinicians, change clinicians’ communication practices, change patient management and improve patient well-being.

Data sources

Searches of electronic databases and forwards and backwards citation tracking.

Review methods

Realist synthesis to identify, test and refine programme theories about when, how and why PROMs feedback leads to improvements in patient care.

Results

Providers were more likely to take steps to improve patient care in response to the feedback and public reporting of aggregate PROMs and performance data if they perceived that these data were credible, were aimed at improving patient care, and were timely and provided a clear indication of the source of the problem. However, implementing substantial and sustainable improvement to patient care required system-wide approaches. In the care of individual patients, PROMs function more as a tool to support patients in raising issues with clinicians than they do in substantially changing clinicians’ communication practices with patients. Patients valued both standardised and individualised PROMs as a tool to raise issues, but thought is required as to which patients may benefit and which may not. In settings such as palliative care and psychotherapy, clinicians viewed individualised PROMs as useful to build rapport and support the therapeutic process. PROMs feedback did not substantially shift clinicians’ communication practices or focus discussion on psychosocial issues; this required a shift in clinicians’ perceptions of their remit.

Strengths and limitations

There was a paucity of research examining the feedback of aggregate PROMs data to providers, and we drew on evidence from interventions with similar programme theories (other forms of performance data) to test our theories.

Conclusions

PROMs data act as ‘tin openers’ rather than ‘dials’. Providers need more support and guidance on how to collect their own internal data, how to rule out alternative explanations for their outlier status and how to explore the possible causes of their outlier status. There is also tension between PROMs as a QI strategy versus their use in the care of individual patients; PROMs that clinicians find useful in assessing patients, such as individualised measures, are not useful as indicators of service quality.

Future work

Future research should (1) explore how differently performing providers have responded to aggregate PROMs feedback, and how organisations have collected PROMs data both for individual patient care and to improve service quality; and (2) explore whether or not and how incorporating PROMs into patients’ electronic records allows multiple different clinicians to receive PROMs feedback, discuss it with patients and act on the data to improve patient care.

Study registration

This study is registered as PROSPERO CRD42013005938.

Funding

The National Institute for Health Research Health Services and Delivery Research programme.

Choice of hospital: Which type of quality matters?

The implications of hospital quality competition depend on what type of quality affects choice of hospital. Previous studies of quality and choice of hospitals have used crude measures of quality such as mortality and readmission rates rather than measures of the health gain from specific treatments. We estimate multinomial logit models of hospital choice by patients undergoing hip replacement surgery in the English NHS to test whether hospital demand responds to quality as measured by detailed patient reports of health before and after hip replacement. We find that a one standard deviation increase in average health gain increases demand by up to 10%. The more traditional measures of hospital quality are less important in determining hospital choice.

Location, quality and choice of hospital: Evidence from England 2002-2013

We investigate (a) how patient choice of hospital for elective hip replacement is influenced by distance, quality and waiting times, (b) differences in choices between patients in urban and rural locations, (c) the relationship between hospitals' elasticities of demand to quality and the number of local rivals, and how these changed after relaxation of constraints on hospital choice in England in 2006. Using a data set on over 500,000 elective hip replacement patients over the period 2002 to 2013 we find that patients became more likely to travel to a provider with higher quality or lower waiting times, the proportion of patients bypassing their nearest provider increased from 25% to almost 50%, and hospital elasticity of demand with respect to own quality increased. By 2013 average hospital demand elasticity with respect to readmission rates and waiting times were - 0.2 and - 0.04. Providers facing more rivals had demand that was more elastic with respect to quality and waiting times. Patients from rural areas have smaller disutility from distance.

A framework for guiding efforts to reward value instead of volume

The U.S. healthcare system is in the midst of a major shift from fee-for-service to value-based reimbursement models. To date, these new reimbursement models have been focused on quality-contingent bonuses and cost-of-care risk sharing for providers, both of which have yielded only modest success.An analysis of health policy and business strategy literature was performed to identify the mechanisms of how value is rewarded in other industries and to understand the barriers to those mechanisms operating in the healthcare industry. A framework was developed to organize these findings. Rewarding healthcare providers for delivering value can only be achieved by enabling profitability to increase as value increases relative to competitors. Four variables determine a provider's profitability, each of which is considered as a potential lever to reward value with profit. The lever that offers the greatest potential is quantity (i.e., market share). Ironically, this means rewarding value with volume. The major barriers to value improvements being rewarded with market share are identified, and the profound impact of minimizing or removing those barriers is illustrated using a variety of examples from our healthcare system. Trending reforms that rely on quality-contingent bonuses and cost-of-care risk sharing are limited in the degree of value improvement they will stimulate because they rely on ineffective levers to reward value; instead, reform efforts must focus on removing barriers to rewarding value with market share. The framework presented can be used to predict the impact of any proposed reform.

Using the deductible for patient channeling: did preferred providers gain patient volume?

In market-based health care systems, channeling patients to designated preferred providers can increase payer's bargaining clout, other things being equal. In the unique setting of the new Dutch health care system with regulated competition, this paper evaluates the impact of a 1-year natural experiment with patient channeling on providers' market shares. In 2009 a large regional Dutch health insurer designated preferred providers for two different procedures (cataract surgery and varicose veins treatment) and gave its enrollees a positive financial incentive for choosing them. That is, patients were exempted from paying their deductible when they went to a preferred provider. Using claims data over the period 2007-2009, we apply a difference-in-difference approach to study the impact of this channeling strategy on the allocation of patients across individual providers. Our estimation results show that, in the year of the experiment, preferred providers of varicose veins treatment on average experienced a significant increase in patient volume relative to non-preferred providers. However, for cataract surgery no significant effect is found. Possible explanations for the observed difference between both procedures may be the insurer's selection of preferred providers and the design of the channeling incentive resulting in different expected financial benefits for both patient groups.

Modern Management Practices and Hospital Admissions

We investigate whether the modern management practices and publicly reported performance measures are associated with choice of hospital for patients with acute myocardial infarction (AMI). We define and measure management practices at approximately half of US cardiac care units using a novel survey approach. A patient's choice of a hospital is modeled as a function of the hospital's performance on publicly reported quality measures and the quality of its management. The estimates, based on a grouped conditional logit specification, reveal that higher management scores and better performance on publicly reported quality measures are positively associated with hospital choice. Management practices appear to have a direct correlation with admissions for AMI--potentially through reputational effects--and indirect association, through better performance on publicly reported measures. Overall, a one standard deviation change in management practice scores is associated with an 8% increase in AMI admissions.

Public reporting and the evolution of diabetes quality

We address three questions related to public reports of diabetes quality. First, does clinic quality evolve over time? Second, does the quality of reporting clinics converge to a common standard? Third, how persistent are provider quality rankings across time? Since current methods of public reporting rely on historic data, measures of clinic quality are most informative if relative clinic performance is persistent across time. We use data from the Minnesota Community Measurement spanning 2007-2012. We employ seemingly-unrelated regression to measure quality improvement conditional upon cohort effects and changes in quality metrics. Basic autoregressive models are used to measure quality persistence. There were striking differences in initial quality across cohorts of clinics and early-reporting cohorts maintained higher quality in all years. This suggests that consumers can infer, on average, that non-reporting clinics have poorer quality than reporting clinics. Average quality, however, improves slowly in all cohorts and quality dispersion declines over time both within and across cohorts. Relative clinic quality is highly persistent year-to-year, suggesting that publicly-reported measures can inform consumers in choice of clinics, even though they represent measured quality for a previous time period. Finally, definition changes in measures can make it difficult to draw appropriate inferences from longitudinal public reports data.

The nature of surgeon human capital depreciation

To test how practice interruptions affect worker productivity, we estimate how temporal breaks affect surgeons' performance of coronary artery bypass grafting (CABG). Examining 188 surgeons who performed 56,315 CABG surgeries in Pennsylvania between 2006 and 2010, we find that a surgeon's additional day away from the operating room raised patients' inpatient mortality by up to 0.067 percentage points (2.4% relative effect) but reduced total hospitalization costs by up to 0.59 percentage points. Among emergent patients treated by high-volume providers, where temporal distance is most plausibly exogenous, an additional day away raised mortality risk by 0.398 percentage points (11.4% relative effect) but reduced cost by up to 1.4 percentage points. This is consistent with the hypothesis that as temporal distance increases, surgeons are less likely to recognize and address life-threatening complications. Our estimates imply additional intraprocedural treatment intensity has a cost per life-year preserved of $7871-18,500, well within conventional cost-effectiveness cutoffs.

Comparative performance information plays no role in the referral behaviour of GPs

Background

Comparative performance information (CPI) about the quality of hospital care is information used to identify high-quality hospitals and providers. As the gatekeeper to secondary care, the general practitioner (GP) can use CPI to reflect on the pros and cons of the available options with the patient and choose a provider best fitted to the patient’s needs. We investigated how GPs view their role in using CPI to choose providers and support patients.

Method

We used a mixed-method, sequential, exploratory design to conduct explorative interviews with 15 GPs about their referral routines, methods of referral consideration, patient involvement, and the role of CPI. Then we quantified the qualitative results by sending a survey questionnaire to 81 GPs affiliated with a representative national research network.

Results

Seventy GPs (86% response rate) filled out the questionnaire. Most GPs did not know where to find CPI (87%) and had never searched for it (94%). The GPs reported that they were not motivated to use CPI due to doubts about its role as support information, uncertainty about the effect of using CPI, lack of faith in better outcomes, and uncertainty about CPI content and validity. Nonetheless, most GPs believed that patients would like to be informed about quality-of-care differences (62%), and about half the GPs discussed quality-of-care differences with their patients (46%), though these discussions were not based on CPI.

Conclusion

Decisions about referrals to hospital care are not based on CPI exchanges during GP consultations. As a gatekeeper, the GP is in a good position to guide patients through the enormous amount of quality information that is available. Nevertheless, it is unclear how and whether the GP’s role in using information about quality of care in the referral process can grow, as patients hardly ever initiate a discussion based on CPI, though they seem to be increasingly more critical about differences in quality of care. Future research should address the conditions needed to support GPs’ ability and willingness to use CPI to guide their patients in the referral process.

The impact of tiered physician networks on patient choices

OBJECTIVE

To assess whether patient choice of physician or health plan was affected by physician tier-rankings.

DATA SOURCES

Administrative claims and enrollment data on 171,581 nonelderly beneficiaries enrolled in Massachusetts Group Insurance Commission health plans that include a tiered physician network and who had an office visit with a tiered physician.

STUDY DESIGN

We estimate the impact of tier-rankings on physician market share within a plan of new patients and on the percent of a physician's patients who switch to other physicians with fixed effects regression models. The effect of tiering on consumer plan choice is estimated using logistic regression and a pre-post study design.

PRINCIPAL FINDINGS

Physicians in the bottom (least-preferred) tier, particularly certain specialist physicians, had lower market share of new patient visits than physicians with higher tier-rankings. Patients whose physician was in the bottom tier were more likely to switch health plans. There was no effect of tier-ranking on patients switching away from physicians whom they have seen previously.

CONCLUSIONS

The effect of tiering appears to be among patients who choose new physicians and at the lower end of the distribution of tiered physicians, rather than moving patients to the "best" performers. These findings suggest strong loyalty of patients to physicians more likely to be considered their personal doctor.

Competition and the impact of online hospital report cards

Information on the quality of healthcare gives providers an incentive to improve care, and this incentive should be stronger in more competitive markets. We examine this hypothesis by studying Pennsylvanian hospitals during the years 1995-2004 to see whether those hospitals located in more competitive markets increased the quality of the care provided to Medicare patients after report cards rating the quality of their Coronary Artery Bypass Graft programs went online in 1998. We find that after the report cards went online, hospitals in more competitive markets used more resources per patient, and achieved lower mortality among more severely ill patients.

Who is watching the watchmen: Is quality reporting ever harmful?

BACKGROUND

Quality reporting is increasingly used as a tool to encourage health systems, hospitals, and their practitioners to deliver the greatest health benefit. However, quality reporting systems may have unintended negative consequences, such as inadvertently encouraging "cherry-picking" by inadequately adjusting for patients who are challenging to take care of, or underpowering to reliably detect meaningful differences in care. There have been no reports seeking to identify a minimum level of accuracy that ought to be viewed as a prerequisite for quality reporting.

METHOD

Using a decision analytic model, we seek to delineate minimal standards for quality measures to meet, using the simplest assumptions to illustrate what those standards may be.

RESULTS

We find that even under assumptions regarding optimal performance of the quality reporting system (sensitivity and specificity of 1), we can identify a minimal level of accuracy required for the quality reporting system to "do no harm": the increase in health-related quality of life from a higher rather than lower quality practitioner must be greater than the number of practitioners per patient divided by the proportion of patients willing to switch from a lower to a higher quality provider.

CONCLUSION

Quality measurement systems that have not been demonstrated to improve health outcomes should be held to a specific standard of measurement accuracy.

The impact of profitability of hospital admissions on mortality

BACKGROUND

Fiscal constraints faced by Medicare are leading to policies designed to reduce expenditures. Evidence of the effect of reduced reimbursement on the mortality of Medicare patients discharged from all major hospital service lines is limited.

METHODS

We modeled risk-adjusted 30-day mortality of patients discharged from 21 hospital service lines as a function of service line profitability, service line time trends, and hospital service line and year-fixed effects. We simulated the effect of alternative revenue-neutral reimbursement policies on mortality. Our sample included all Medicare discharges from PPS-eligible hospitals (1997, 2001, and 2005).

RESULTS

The results reveal a statistically significant inverse relationship between changes in profitability and mortality. A $0.19 average reduction in profit per $1.00 of costs led to a 0.010-0.020 percentage-point increase in mortality rates (p < .001). Mortality in newly unprofitable service lines is significantly more sensitive to reduced payment generosity than in service lines that remain profitable. Policy simulations that target service line inequities in payment generosity result in lower mortality rates, roughly 700-13,000 fewer deaths nationally.

CONCLUSIONS

The policy simulations raise questions about the trade-offs implicit in universal reductions in reimbursement. The effect of reduced payment generosity on mortality could be mitigated by targeting highly profitable services only for lower reimbursement.

Do patients choose hospitals with high quality ratings? Empirical evidence from the market for angioplasty in the Netherlands

A necessary condition for competition to promote quality in hospital markets is that patients are sensitive to differences in hospital quality. In this paper we examine the relationship between hospital quality, as measured by publicly available quality ratings, and patient hospital choice for angioplasty using individual claims data from a large health insurer. We find that Dutch patients have a high propensity to choose hospitals with a good reputation, both overall and for cardiology, and a low readmission rate after treatment for heart failure. Relative to a mean readmission rate of 8.5% we find that a 1%-point lower readmission rate is associated with a 12% increase in hospital demand. Since readmission rates are not adjusted for case-mix they may not provide a correct signal of hospital quality. Insofar patients base their hospital choice on such imperfect quality information, this may result in suboptimal choices and risk selection by hospitals.