The effect of cuts in medicare reimbursement on hospital mortality

Declining Medicare reimbursement in spinal imaging: a 15-year review

OBJECTIVE

To analyze and quantify the change in United States of America Medicare reimbursement rates for the 30 most commonly performed spinal imaging procedures.

MATERIALS AND METHODS

The Physician Fee Schedule Look-Up Tool from the Centers for Medicare & Medicaid Services was utilized to find and extract the 28 most billed spinal imaging procedures. All data was adjusted for inflation and listed in 2020 US dollars. Percent change in reimbursement and Relative Value Units between 2005 and 2020, both unadjusted and adjusted, were calculated and compared. Additionally, percent change per year and compound annual growth rate were calculated and compared.

RESULTS

After adjusting for inflation, the average reimbursement for all analyzed spinal imaging procedures between the years 2005 and 2020 decreased by 45.9%. The adjusted reimbursement rate for all procedures decreased at an average 4.3% per year and experienced an average compound annual growth rate (CAGR) of - 4.4%. Magnetic resonance imaging (MRI) had the most substantial adjusted decline of all imaging modalities at - 72.6%, whereas x-ray imaging had the smallest decline at - 27.33%. The average total RVUs per procedure decreased by 50.1%, from 7.96 to 3.97.

CONCLUSION

From the years 2005 to 2020, Medicare reimbursement significantly decreased for all advanced imaging modalities involving the most common spinal imaging procedures. Among all practices, imaging procedures may be experiencing some of the largest decreases from Medicare reimbursement cutbacks.

Healthcare Disparities Among Homeless Patients Hospitalized With Gastrointestinal Bleeding: A Propensity-Matched, State-Level Analysis

GOALS

Examine outcomes among homeless patients admitted with gastrointestinal (GI) bleeding, including all-cause mortality and endoscopic intervention rates.

BACKGROUND

Hospitalizations among homeless individuals have increased steadily since at least 2007 but little is known about GI outcomes in these patients.

STUDY

The 2010-2014 Healthcare Utilization Project (HCUP) State Inpatient Databases from New York and Florida were used to identify adults admitted with a primary diagnosis of acute upper or lower GI bleed. Homeless patients were 1:3 matched with nonhomeless patients using a propensity-score greedy-matched algorithm. The primary outcome (all-cause in-hospital mortality) and secondary outcomes (30-day readmission rates, endoscopy utilization, length of stay, and total hospitalization costs) were compared.

RESULTS

We matched 4074 homeless patients with 12,222 nonhomeless patients. Most hospitalizations for homeless individuals were concentrated in 113 (26.4%) of 428 hospitals. Homeless adults were more likely to be younger, male, African American or Hispanic, and on Medicaid. They experienced significantly higher odds of all-cause inpatient mortality compared with nonhomeless patients admitted with GI bleeding (OR 1.37, 95% CI 1.11-1.69). Endoscopy utilization rates were also lower for both upper (OR 0.62, 95% CI 0.55-0.71) and lower (OR 0.76, 95% CI 0.68-0.85) GI bleeding, though upper endoscopy rates within the first 24 hours were comparable (OR 1.11, 95% CI 1.00-1.23). Total hospitalization costs were lower ($9,715 vs. $12,173, P <0.001) while 30-day all-cause readmission rates were significantly higher in the homeless group (14.9% vs. 18.4%, P <0.001).

CONCLUSIONS

Homeless patients hospitalized for GI bleeding face disparities, including higher mortality rates and lower endoscopy utilization.

Charting Trends in Medicare Reimbursement for Lower Extremity Imaging

Background

Medicare reimbursement is rapidly declining in many specialties. An in-depth analysis of Medicare reimbursement for routinely performed diagnostic imaging procedures in the United States is warranted.

Purpose/Hypothesis

The purpose of this study was to evaluate Medicare reimbursement trends for the 20 most common lower extremity imaging procedures performed between 2005 and 2020, including radiographs, computed tomography (CT), and magnetic resonance imaging (MRI). We hypothesized that Medicare reimbursement for imaging procedures would decline substantially over the studied period.

Study Design

Cohort study.

Methods

The Physician Fee Schedule Look-up Tool from the Centers for Medicare and Medicaid Services was analyzed for reimbursement rates and relative value units associated with the top 20 most utilized Current Procedural Terminology (CPT) codes in lower extremity imaging from 2005 to 2020. Reimbursement rates were adjusted for inflation and listed in 2020 US dollars using the US Consumer Price Index. To compare year-to-year changes, the percentage change per year and compound annual growth rate were calculated. A 2-tailed t test was used to compare the unadjusted and adjusted percentage change over the 15-year period.

Results

After adjusting for inflation, mean reimbursement for all procedures decreased by 32.41% (P = .013). The mean adjusted percentage change per year was -2.82%, and the mean compound annual growth rate was -1.03%. Compensation for the professional and technical components for all CPT codes decreased by 33.02% and 85.78%, respectively. Mean compensation for the professional component decreased by 36.46% for radiography, 37.02% for CT, and 24.73% for MRI. Mean compensation for the technical component decreased by 7.76% for radiography, 127.66% for CT, and 207.88% for MRI. Mean total relative value units decreased by 38.7%. The commonly billed imaging procedure CPT 73720 (MRI lower extremity, other than joint, with and without contrast) had the greatest adjusted decrease of 69.89%.

Conclusion

Medicare reimbursement for the most billed lower extremity imaging studies decreased by 32.41% between 2005 and 2020. The greatest decreases were noted in the technical component. Of the modalities, MRI had the largest decrease, followed by CT and then radiography.

Determinants of Commercial Prices for Common Radiation Therapy Procedures

PURPOSE

Using hospital-reported price data, we analyzed whether various market factors including radiation oncology practice consolidation were associated with higher commercial prices for radiation therapy (RT).

METHODS AND MATERIALS

We evaluated commercial prices paid by private insurers for 4 common RT procedures-intensity modulated RT (IMRT) planning, IMRT delivery, 3-dimensional RT (3D-RT) planning, and 3D-RT delivery-reported among the 2096 hospitals in the United States that deliver RT according to the Medicare Provider of Service file. To assess price variation within hospitals, we evaluated the ratio of the 90th percentile price to the 10th percentile price among different private insurers. To assess regional variation, we similarly compared median commercial prices at the 90th and 10th percentile hospitals in each Hospital Referral Region. We generated multivariable models to test the association of various hospital, health system, regional, and market factors on median hospital commercial prices.

RESULTS

A total of 1004 hospitals (47.9%) reported at least 1 commercial price for any of the 4 RT procedures considered in this study. National median commercial prices for IMRT planning and IMRT delivery were $4073 (interquartile ratio [IQR], $2242-$6305) and $1666 (IQR, $1014-$2619), respectively. Prices for 3D-RT planning and 3D-RT delivery were $2824 (IQR, $1339-$4738) and $616 (IQR, $419-877), respectively. Within hospitals, the 90th percentile price paid by a private insurer was 2.3 to 2.5 times higher on average than the 10th percentile price, depending on the procedure. Within each Hospital Referral Region, the median price at the 90th percentile hospital was between 2.4 and 3.2 times higher than at the 10th percentile hospital. On multivariable analysis, higher prices were generally observed at hospitals with for-profit ownership, teaching status, and affiliation with large health systems. Levels of radiation oncology practice consolidation were not significantly associated with any prices.

CONCLUSIONS

Commercial prices for common RT procedures vary by more than a factor of 2 depending on a patient's private insurer and hospital of choice. Higher prices were more likely to be found at for-profit hospitals, teaching hospitals, and hospitals affiliated with large health systems.

Neighborhood-level Socioeconomic Status Predicts Extended Length of Stay Following Elective Anterior Cervical Spine Surgery

BACKGROUND

A significant portion of healthcare spending is driven by a small percentage of the overall population. Understanding risk factors predisposing patients to disproportionate utilization of healthcare resources is critical. Our objective was to identify risk factors leading to a prolonged length of stay (LOS) following cervical spine surgery.

METHODS

A single center cohort analysis was performed on patients who underwent elective anterior spine surgery from 2015-2021. Multivariate logistic regression evaluated the effects of sociodemographic factors including Area of Deprivation Index (quantifies income, education, employment, and housing quality), procedural, and discharge characteristics on postoperative LOS. Extended LOS was defined as greater than the 90^th percentile in midnights for the study population (greater than or equal to three midnights).

RESULTS

There were 686 patients included in the study, with a mean age of 57 years (range 26-92), median of 1 level (1-4) fused, and median LOS of 1 midnight (IQR 1,2). After adjusting for confounders, patients had increased odds of extended LOS if they were highly disadvantaged on the Area of Deprivation Index (ADI, OR=2.24, 95% CI=1.04 - 4.82; p=.039); had surgery on Thursday or Friday (OR=1.94; 1.01 - 3.72; p=.046); had a corpectomy performed (OR=2.81; 1.26 - 6.28; p=.012); or discharged not to home (OR=8.24; 2.88 - 23.56; p<.001). Patients with extended LOS were more likely to present to the emergency department or be re-admitted within 30 days after discharge (p=.024).

CONCLUSION

After adjusting for potential cofounders, patients most disadvantaged on ADI were more likely to have an extended LOS.

Quality and Cost of Care by Hospital Teaching Status: What Are the Differences?

Policy Points In two respects, quality of care tends to be higher at major teaching hospitals: process of care and long-term survival of cancer patients following initial diagnosis. There is also evidence that short-term (30-day) mortality is lower on average at such hospitals, although the quality of evidence is somewhat lower. Quality of care is mulitdimensional. Empirical evidence by teaching status on dimensions other than survival is mixed. Higher Medicare payments for care provided by major teaching hospitals are partially offset by lower payments to nonhospital providers. Nevertheless, the payment differences between major teaching and nonteaching hospitals for hospital stays, especially for complex cases, potentially increase prices other insurers pay for hospital care.

CONTEXT

The relative performance of teaching hospitals has been discussed for decades. For private and public insurers with provider networks, an issue is whether having a major teaching hospital in the network is a "must." For traditional fee-for-service Medicare, there is an issue of adequacy of payment of hospitals with various attributes, including graduate medical education (GME) provision. Much empirical evidence on relative quality and cost has been published. This paper aims to (1) evaluate empirical evidence on relative quality and cost of teaching hospitals and (2) assess what the findings indicate for public and private insurer policy.

METHODS

Complementary approaches were used to select studies for review. (1) Relevant studies highly cited in Web of Science were selected. (2) This search led to studies cited by these studies as well as studies that cited these studies. (3) Several literature reviews were helpful in locating pertinent studies. Some policy-oriented papers were found in Google under topics to which the policy applied. (4) Several papers were added based on suggestions of reviewers.

FINDINGS

Quality of care as measured in process of care studies and in longitudinal studies of long-term survival of cancer patients tends to be higher at major teaching hospitals. Evidence on survival at 30 days post admission for common conditions and procedures also tends to favor such hospitals. Findings on other dimensions of relative quality are mixed. Hospitals with a substantial commitment to graduate medical education, major teaching hospitals, are about 10% to 20% more costly than nonteaching hospitals. Private insurers pay a differential to major teaching hospitals at this range's lower end. Inclusive of subsidies, Medicare pays major teaching hospitals substantially more than 20% extra, especially for complex surgical procedures.

CONCLUSIONS

Based on the evidence on quality, there is reason for patients to be willing to pay more for inclusion of major teaching hospitals in private insurer networks at least for some services. Medicare payment for GME has long been a controversial policy issue. The actual indirect cost of GME is likely to be far less than the amount Medicare is currently paying hospitals.

Association of VA Payment Reform for Dialysis with Spending, Access to Care, and Outcomes for Veterans with ESKD

BACKGROUND AND OBJECTIVES

Because of the limited capacity of its own dialysis facilities, the Department of Veterans Affairs (VA) Veterans Health Administration routinely outsources dialysis care to community providers. Prior to 2011-when the VA implemented a process of standardizing payments and establishing national contracts for community-based dialysis care-payments to community providers were largely unregulated. This study examined the association of changes in the Department of Veterans Affairs payment policy for community dialysis with temporal trends in VA spending and veterans' access to dialysis care and mortality.

DESIGN, SETTING, PARTICIPANTS, & MEASUREMENTS

An interrupted time series design and VA, Medicare, and US Renal Data System data were used to identify veterans who received VA-financed dialysis in community-based dialysis facilities before (2006-2008), during (2009-2010), and after the enactment of VA policies to standardize dialysis payments (2011-2016). We used multivariable, differential trend/intercept shift regression models to examine trends in average reimbursement for community-based dialysis, access to quality care (veterans' distance to community dialysis, number of community dialysis providers, and dialysis facility quality indicators), and 1-year mortality over this time period.

RESULTS

Before payment reform, the unadjusted average per-treatment reimbursement for non-VA dialysis care varied widely ($47-$1575). After payment reform, there was a 44% reduction ($44-$250) in the adjusted price per dialysis session (P<0.001) and less variation in payments for dialysis ($73-$663). Over the same time period, there was an increase in the number of community dialysis facilities contracting with VA to deliver care to veterans with ESKD from 19 to 37 facilities (per VA hospital), and there were no changes in either the quality of community dialysis facilities or crude 1-year mortality rate of veterans (12% versus 11%).

CONCLUSIONS

VA policies to standardize payment and establish national dialysis contracts increased the value of VA-financed community dialysis care by reducing reimbursement without compromising access to care or survival.

Hospital responses to price shocks under the prospective payment system

Under the prospective payment system (PPS), hospitals receive a bundled payment for an entire episode of treatment based on diagnosis-related groups (DRG). Although there is ample evidence regarding the impact of the introduction of the PPS, there is little research on the effects of the ensuing changes in payment levels under the PPS. In 2005, the Medicare PPS changed its definition of payment areas from the Metropolitan Statistical Areas to the Core-Based Statistical Areas, generating substantial area-specific price shocks. Using these exogenous price variations, this study examines hospital responses to price changes under the PPS. The results demonstrate that, while the average payment amount significantly increases in the affected areas, no parallel trend is observed in admission volume, treatment intensity, and quality of services. Conversely, hospitals facing a price increase are more liable to the perverse incentives that the PPS is known to encourage, namely, selecting or shifting patients into higher-paying DRGs. These results suggest that paying a higher price for a given service may not induce hospitals to offer services of better quality, but can rather prompt even higher payments through other behavioral responses.

Price Changes in Regulated Healthcare Markets: Do Public Hospitals Respond and How?

This paper examines the behaviour of public hospitals in response to the average payment incentives created by price changes for patients classified in different diagnosis-related groups (DRGs). Using panel data on public hospitals located within the Italian region of Emilia-Romagna, we test whether a 1-year increase in DRG prices induced public hospitals to increase their volume of activity and whether a potential response is associated with changes in waiting times and/or length of stay. We find that public hospitals reacted to the policy change by increasing the number of patients with surgical treatments. This effect was smaller in the 2 years after the policy change than in later years, and for providers with a lower excess capacity in the pre-policy period, whereas it did not vary significantly across hospitals according to their degree of financial and administrative autonomy. For patients with medical DRGs, instead, there appeared to be no effect on inpatient volumes. Our estimates also suggest that an increase in DRG prices had no impact on the proportion of patients waiting more than 6 months. Finally, we find no evidence of a significant effect on patients' average length of stay. Copyright © 2016 John Wiley & Sons, Ltd.

Comparison of Long-run Trends in 30-day Readmission by Degrees of Medicare Payment Cuts

BACKGROUND AND OBJECTIVE

The Affordable Care Act enacted significant Medicare payment reductions to providers, yet long-term effects of such major reductions on patient outcomes remain uncertain. Using the 1997 Balanced Budget Act (BBA) as an experiment, we compare long-run trends in 30-day readmission across hospitals with different amount of payment cuts.

RESEARCH DESIGN, SUBJECTS, AND MEASURES

Using 100% Medicare claims between 1995 and 2011 and instrumental variable hospital fixed-effects regression models, we compared changes in 30-day readmission trends for 5 leading Medicare conditions between urban hospitals facing small, moderate, and large BBA payment reductions across 4 periods [1995-1997 (pre-BBA period), 1998-2000, 2001-2005, 2006-2001]. Patient sample includes Medicare patients who were admitted to general, acute, urban, short-stay hospitals in the United States 1995-2011. Sample size ranges from 1.4 million patients for acute myocardial infarction to 3 million for pneumonia.

RESULTS

We found that 30-day readmission trends diverged post-BBA (2001-2005) between hospitals facing small and large payment cuts, where large-cut hospitals experience slower improvement in readmission rates relative to small-cut hospitals. The gap between small-cut and large-cut hospitals readmission trend was 6% for acute myocardial infarction, 4% for congestive heart failure and pneumonia (all P<0.01) in the 2001-2005 period. The gaps between hospitals were eliminated by the 2006-2011 period as the effect of BBA naturally dissipated over time.

CONCLUSIONS

Although payment-cut differences are associated with widening gaps in readmission rates across hospitals, the negative association appears to dissipate in the long run.

Remuneración a los proveedores de servicios de salud en Bogotá

Objetivo Revisar los conceptos, desarrollos y efectos de los mecanismos de pago utilizados en diversos países, con el fin de proponer una metodología de pago aplicable para los hospitales de Bogotá.Método Se efectuó una revisión bibliográfica de tres aspectos de interés: conceptos esenciales, desarrollos alcanzados y efectos derivados de los mecanismos de pago utilizados en diversos países. Luego se efectuaron sesiones de trabajo entre los autores y con diversos grupos y equipos de la secretaria de salud de Bogotá, los hospitales, la academia y las autoridades nacionales en salud, para el diseño metodológico de un esquema de pago aplicable a los hospitales de la red adscrita de salud en Bogotá.Resultados La revisión bibliográfica permitió establecer los ejes de trabajo para un esquema de pago prospectivo por red con incentivos de desempeño, basado en optimización de la eficiencia técnica (provisión de servicios de salud a menor costo) y locativa (optimización de la mezcla de los servicios de salud) y en mejores resultados de atención.Discusión El esquema de reconocimiento planteado debe ser un factor integrador del proceso de atención al paciente y redundar en una mejor operación del aseguramiento, la prestación de servicios y la gobernanza de la atención en salud, al tiempo que optimiza el flujo de recursos y la sostenibilidad local del sistema.

How do Hospitals Respond to Price Changes? Evidence from Norway

Many publicly funded health systems use activity-based financing to increase hospital production and efficiency. The aim of this study is to investigate whether price changes for different treatments affect the number of patients treated and the mix of activity provided by hospitals. We exploit the variations in prices created by the changes in the national average treatment cost per diagnosis-related group (DRG) offered to Norwegian hospitals over a period of 5 years (2003-2007). We use the data from Norwegian Patient Register, containing individual-level information on age, gender, type of treatment, diagnosis, number of co-morbidities and the national average treatment costs per DRG. We employ fixed-effect models to examine the changes in the number of patients treated within the DRGs over time. The results suggest that a 10% increase in price leads to about 0.8-1.3% increase in the number of patients treated for DRGs, which are medical (for both emergency and elective patients). In contrast, we find no price effect for DRGs that are surgical (for both emergency and elective patients). Moreover, we find evidence of upcoding. A 10% increase in the ratio of prices between patients with and without complications increases the proportion of patients coded with complications by 0.3-0.4 percentage points.

Can Payers Use Prices to Improve Quality? Evidence from English Hospitals

In most activity-based financing systems, payers set prices reactively based on historical averages of hospital reported costs. If hospitals respond to prices, payers might set prices proactively to affect the volume of particular treatments or clinical practice. We evaluate the effects of a unique initiative in England in which the price offered to hospitals for discharging patients on the same day as a particular procedure was increased by 24%, while the price for inpatient treatment remained unchanged. Using national hospital records for 205,784 patients admitted for the incentivised procedure and 838,369 patients admitted for a range of non-incentivised procedures between 1 December 2007 and 31 March 2011, we consider whether this price change had the intended effect and/or produced unintended effects. We find that the price change led to an almost six percentage point increase in the daycase rate and an 11 percentage point increase in the planned daycase rate. Patients benefited from a lower proportion of procedures reverted to open surgery during a planned laparoscopic procedure and from a reduction in long stays. There was no evidence that readmission and death rates were affected. The results suggest that payers can set prices proactively to incentivise hospitals to improve quality.

How Do Hospitals Respond to Market Entry? Evidence from a Deregulated Market for Cardiac Revascularization

Regulatory entry barriers to hospital service markets, namely Certificate of Need (CON) regulations, are enforced in many US states. Policy makers in other states are considering reinstating CON policies in tandem with service expansions mandated under the Affordable Care Act. Although previous studies examined the volume effects of CON, demand responses to actual entry into local hospital markets are not well understood. In this paper, we empirically examine the demand-augmenting, demand-redistribution, and risk-allocation effects of hospital entry by studying the cardiac revascularization markets in Pennsylvania, a state in which dynamic market entry occurred after repeal of CON in 1996. Results from interrupted time-series analyses indicate demand-augmenting effects for coronary artery bypass graft (CABG) and business-stealing effects for percutaneous coronary intervention (PCI) procedures: high entrant market share mitigated the declining incidence of CABG, but it had no significant effect on the rising trend in PCI use, among patients with coronary artery disease. We further find evidence that entry by new cardiac surgery centers tended to sort high-severity patients into the more invasive CABG procedure and low-severity patients into the less invasive PCI procedures. These findings underscore the importance of considering market-level strategic responses by hospitals when regulatory barriers are rescinded.

Bend the healthcare cost curve without pain? The health outcome after the Medicare reimbursement cut in 1997

OBJECTIVE

This study examines whether the hospital-acquired infection (HAI) rates in hospitals in Pennsylvania of the USA have increased after reimbursement reductions, based on the Balance Budget Act of 1997.

METHODS

This study used patient discharge data from 1994 to 2002 from the Pennsylvania Health Care Cost Containment Council and analyzed the pre-post changes of the HAI rates in a hospital group, which had received a high level of reimbursement cuts, comparing this with a control group, using ordinary least squares regression analysis.

RESULTS

Seven hundred six hospital-year records from 89 different hospitals in Pennsylvania during 1994-2002 were examined. No statistically significant changes in the difference of the HAI rates were found between the hospital groups with high and low levels of financial impacts from the reimbursement cut in the short or long run.

CONCLUSIONS

After the implementation of the Medicare reimbursement cut by the Balance Budget Act of 1997, the HAI rates among hospitals in Pennsylvanian in the USA did not statistically significantly increase. The results suggest that, in cost-saving healthcare reform, hospitals may not operate a simple cost-quality trade-off.

Hospitalization costs for acute myocardial infarction patients treated with percutaneous coronary intervention in the United States are substantially higher than Medicare payments

BACKGROUND

Acute coronary syndromes account for half of all deaths secondary to cardiovascular disease and represent a significant economic burden in the United States. Therefore, assessing hospitalization costs relative to Medicare reimbursement for these patients is important in understanding the impact of these patients on hospitals. We hypothesized that hospitalization costs for acute myocardial infarction patients treated with percutaneous coronary intervention (PCI) were higher than their associated Medicare payments.

METHODS

Using the Nationwide Inpatient Sample, we evaluated hospitalization costs for patients treated with PCI from 2001 through 2009 by multiplying hospital charges by the group average cost-to-charge ratio for each patient's hospitalization. Primary end points examined were total hospital costs and trends over time, which were correlated with clinical outcomes and insurance payments. Costs were inflation adjusted with 2009 as the reference year.

RESULTS

Median hospitalization costs of PCI increased from $15 889 (interquartile range [IQR] = $12 057-$21 204) in 2001 to $19 349 (IQR = $14 660-$26 282) in 2009. From 2004 to 2009, inflation-adjusted costs for PCI decreased at a rate of 0.3% per year. In 2009, a total of 265,531 patients received PCI for acute myocardial infarction. Of these, 143 654 were <65 years old, and 121 876 were ≥65 years old. Average 2009 Medicare payments ranged from $9303 to $17 500 depending on the Medicare Severity-Diagnosis Related Groups (MS-DRG) billed, leaving hospitals at a loss of anywhere from $4493 to $7940 per patient when comparing costs and reimbursements across all included MS-DRG codes.

CONCLUSIONS

Hospitalization costs for patients treated with PCI have been stabilizing over the last few years; however, there still remains a significant disparity between Medicare reimbursements and hospitalization costs, which has potential implications on patient outcomes, quality of care, and hospital sustainability.

The effectiveness-efficiency trade-off in health care: The case of hospitals in Lombardy, Italy

We study the presence and the magnitudes of trade-offs between health outcomes and hospitals' efficiency using a data set from Lombardy, Italy, for the period 2008-2011. Our goal is to analyze whether the pressures for cost containment may affect hospital performance in terms of population health status. Unlike previous work in this area, we analyze hospitals at the ward level so comparisons can be made across more homogeneous treatments. We focus on two different health outcomes: mortality and readmission rates. We find that there is a trade-off between mortality rates and efficiency, as more efficient hospitals have higher mortality rates. We also find, however, that more efficient hospitals have lower readmission rates. Moreover, we show that focusing the analysis at the ward level is essential, since there is evidence of higher mortality rates in general medicine and surgery, while in oncology mortality is lower in more efficient hospitals. Furthermore, we find that consideration of spatial processes is important since mortality rates are higher for hospitals subject to high degree of horizontal competition, but lower for those hospitals having strong competition but high efficiency. This implies that the interplay of efficient resource allocation and hospital competition is important for the sustainability and effectiveness of regional health care systems.

Long-term impact of medicare payment reductions on patient outcomes

OBJECTIVE

To examine the long-term impact of Medicare payment reductions on patient outcomes for Medicare acute myocardial infarction (AMI) patients.

DATA SOURCES

Analysis of secondary data compiled from 100 percent Medicare Provider Analysis and Review between 1995 and 2005, Medicare hospital cost reports, Inpatient Prospective Payment System Payment Impact Files, American Hospital Association annual surveys, InterStudy, Area Resource Files, and County Business Patterns.

STUDY DESIGN

We used a natural experiment-the Balanced Budget Act (BBA) of 1997-as an instrument to predict cumulative Medicare revenue loss due solely to the BBA, and basing on the predicted loss categorized hospitals into small, moderate, or large payment-cut groups and followed Medicare AMI patient outcomes in these hospitals over an 11-year panel between 1995 and 2005.

PRINCIPAL FINDINGS

We found that while Medicare AMI mortality trends remained similar across hospitals between pre-BBA and initial-BBA periods, hospitals facing large payment cuts saw smaller improvement in mortality rates relative to that of hospitals facing small cuts in the post-BBA period. Part of the relatively higher AMI mortalities among large-cut hospitals might be related to reductions in staffing levels and operating costs, and a small part might be due to patient selection.

CONCLUSIONS

We found evidence that hospitals facing large Medicare payment cuts as a result of BBA of 1997 were associated with deteriorating patient outcomes in the long run. Medicare payment reductions may have an unintended consequence of widening the gap in quality across hospitals.

Did budget cuts in Medicaid disproportionate share hospital payment affect hospital quality of care?

BACKGROUND

Medicaid Disproportionate Share Hospital (DSH) payments are one of the major sources of financial support for hospitals providing care to low-income patients. However, Medicaid DSH payments will be redirected from hospitals to subsidize individual health insurance purchase through US national health reform.

OBJECTIVES

The purpose of this study is to examine the association between Medicaid DSH payment reductions and nursing-sensitive and birth-related quality of care among Medicaid/uninsured and privately insured patients.

METHODS

Economic theory of hospital behavior was used as a conceptual framework, and longitudinal data for California hospitals from 1996 to 2003 were examined. Hospital-fixed effects regression models were estimated. The unit of analysis is at the hospital level, examining 2 aggregated measures based on the payer category of discharged patients (ie, Medicaid/uninsured and privately insured).

PRINCIPAL FINDINGS

The overall study findings provide at best weak evidence of an association between net Medicaid DSH payments and hospital quality of care for either Medicaid/uninsured or the privately insured patients. The magnitudes of the effects are small and only a few have significant DSH effects.

CONCLUSIONS

Although this study does not find evidence suggesting that reducing Medicaid DSH payments had a strong negative impact on hospital quality of care for Medicaid/uninsured or privately insured patients, the results are not necessarily predictive of the impact national health care reform will have. Research is necessary to monitor hospital quality of care as this reform is implemented.

Impacts of health insurance benefit design on percutaneous coronary intervention use and inpatient costs among patients with acute myocardial infarction in Shanghai, China

BACKGROUND

Currently, the most popular hospital payment method in China is fee-for-service (FFS) with a global budget cap. As of December 2009, a policy change means that heart stents are covered by public health insurance, whereas previously they were not. This policy change provides us an opportunity to study how a change in insurance benefit affected the quantity and quality of hospital services. The new policy introduced incentives for both patients and providers: it encourages patient demand for percutaneous coronary intervention (PCI) services and stent use (moral hazard effect), and discourages hospital supply due to the financial pressures of the global cap (provider gaming effect). If the provider's gaming effect dominates the moral hazard effect, actual utilisation and costs might go down, and vice versa. Our hypothesis is that patients in the higher reimbursement groups will have fewer PCIs and lower inpatient costs.

OBJECTIVE

We aimed to examine the impact of health insurance benefit design on PCI and stent use, and on inpatient costs and out-of-pocket expenses for patients with acute myocardial infarction (AMI) in Shanghai.

METHODS

We included 720 patients with AMI (467 before the benefit change and 253 after) from a large teaching tertiary hospital in Shanghai. Data were collected via review of hospital medical charts, and from the hospital billing database. Patient information collected included demographic characteristics, medical history and procedure information. All patients were categorised into four groups according to their actual reimbursement ratio: high (90-100 %), moderate (80-90 %), low (0-80 %) and none (self-paid patients). Multiple regression and difference-in-difference (DID) models were used to investigate the impacts of the health insurance benefit design on PCI and stent use, and on total hospital costs and patients' out-of-pocket expenses.

RESULTS

After the change in insurance benefit policy, compared with the self-paid group, PCI rates for the moderate and low reimbursement groups increased by 22.2 and 20.3 %, respectively, and decreased by 48.7 % for the high reimbursement group. The change in insurance benefit policy had no impact on the number of stents used. The high reimbursement group had the lowest hospital costs, and the low reimbursement group had the highest hospital costs, regardless of benefit policy change. The general linear regression results showed that the high reimbursement group had higher total hospital costs than the self-paid group, but were the lowest among all reimbursement groups after the benefit policy change (DIDh = 1,202.21, P = 0.0096). There were no significant changes in the other two groups, and there were no differences in the out-of-pocket costs across any of the insured groups.

CONCLUSIONS

Our results suggest that the benefit policy change did not impact life-saving procedures or reduce patients' burden of disease among AMI patients. The effect of 'provider gaming' was the strongest for the high reimbursement group as a result of the global budget cap pressure. The current FFS with a global budget cap is of low efficiency for cost containment and equity improvement. Payment method reforms with alignment of financial incentives to improve provider behaviour in practicing evidence-based medicine are needed in China.

Based on key measures, care quality for Medicare enrollees at safety-net and non-safety-net hospitals was almost equal

Safety-net hospitals, which include urban hospitals serving large numbers of low-income, uninsured, and otherwise vulnerable populations, have historically faced greater financial strains than hospitals that serve more affluent populations. These strains can affect hospitals' quality of care, perhaps resulting in worse outcomes that are commonly used as indicators of care quality-mortality and readmission rates. We compared risk-standardized rates of both of these clinical outcomes among fee-for-service Medicare beneficiaries admitted for acute myocardial infarction, heart failure, or pneumonia. These beneficiaries were admitted to urban hospitals within Metropolitan Statistical Areas that contained at least one safety-net and at least one non-safety-net hospital. We found that outcomes varied across the urban areas for both safety-net and non-safety-net hospitals for all three conditions. However, mortality and readmission rates were broadly similar, with non-safety-net hospitals outperforming safety-net hospitals on average by less than one percentage point across most conditions. For heart failure mortality, there was no difference between safety-net and non-safety-net hospitals. These findings suggest that safety-net hospitals are performing better than many would have expected.

A longitudinal analysis of the impact of hospital service line profitability on the likelihood of readmission

Quality of care may be linked to the profitability of admissions in addition to level of reimbursement. Prior policy reforms reduced payments that differentially affected the average profitability of various admission types. The authors estimated a Cox competing risks model, controlling for the simultaneous risk of mortality post discharge, to determine whether the average profitability of hospital service lines to which a patient was admitted was associated with the likelihood of readmission within 30 days. The sample included 12,705,933 Medicare Fee for Service discharges from 2,438 general acute care hospitals during 1997, 2001, and 2005. There was no evidence of an association between changes in average service line profitability and changes in readmission risk, even when controlling for risk of mortality. These findings are reassuring in that the profitability of patients' admissions did not affect readmission rates, and together with other evidence may suggest that readmissions are not an unambiguous quality indicator for in-hospital care.

Impact of cuts in reimbursement on outcome of acute myocardial infarction and use of percutaneous coronary intervention: a nationwide population-based study over the period 1997 to 2008

BACKGROUND

The impact of cuts in reimbursement, such as the Balanced Budget Act in the United States or global budgeting, on the quality of patient care is an important issue in health-care reform. Limited information is available regarding whether reimbursement cuts are associated with processes and outcomes of acute myocardial infarction (AMI) care.

OBJECTIVES

We used nationwide longitudinal population-based data to examine how 30-day mortality and percutaneous coronary intervention (PCI) use for AMI patients changed in accordance with the degree of financial strain induced by the implementation of hospital global budgeting since July 2002 in Taiwan.

METHODS

We analyzed all 102,520 AMI patients admitted to general acute care hospitals in Taiwan over the period 1997 to 2008 through Taiwan's National Health Insurance Research Database. Multilevel logistic regression analysis was performed after adjustment for patient, physician, and hospital characteristics to test the association of reimbursement cuts with 30-day mortality and PCI use.

RESULTS

The mean magnitude of payment reduction on overall hospital revenues was highest (10.02%) during the period 2004 to 2005. Large reimbursement cuts were associated with higher adjusted 30-day mortality. There was no statistically significant correlation between reimbursement cuts and PCI use.

CONCLUSIONS

The mortality of AMI patients increases under increased financial strain from cuts in reimbursement. Nevertheless, the use of PCI is not affected throughout the study period. Reductions in the quantity or quality of services with a negative contribution margin or high cost, such as nurse staffing, may explain the association between reimbursement cuts and AMI outcome.

The Effect of Cuts in Reimbursement on Stroke Outcome

Background and Purpose— As healthcare costs keep rising, cuts in reimbursement such as the Balanced Budget Act in the United States or global budgeting have become the key to healthcare reform efforts. Limited information is available, however, concerning whether reimbursement cuts are associated with changes in stroke outcomes. The objective of this study is to determine whether 30-day mortality rates for patients with ischemic stroke changed under increased financial strain from global budgeting in Taiwan.

Methods— We analyzed all 258 167 patients with ischemic stroke admitted to general acute care hospitals in Taiwan over the period 1998 to 2007 through Taiwan’s National Health Insurance Research Database. Multilevel logistic regression analysis was used to examine whether 30-day stroke mortality rates varied after the implementation of hospital global budgeting since July 2002 adjusted for patient, physician, and hospital characteristics.

Results— The magnitude of payment reduction on overall hospital net revenues was between 4.3% and 10.0%. The 30-day mortality rates for patients with ischemic stroke in Taiwan increased after the implementation of hospital global budgeting after adjustment for patient gender and age, comorbidities, surgery, physician age and volume, specialty, hospital volume, ownership, accreditation level, bed size, geographic location, competition, and trend.

Conclusions— The mortality rate of patients with stroke rose under increased financial strain from cuts in reimbursement. Therefore, stroke outcomes are more likely to be affected by hospital financial pressures. It is imperative to monitor stroke outcomes and develop strategies to maintain levels of stroke care as cuts in reimbursement are adopted.

Trends in hospital discharge disposition for elderly patients with infective endocarditis: 1993 to 2003

OBJECTIVES

To examine hospital discharges of elderly patients hospitalized with infective endocarditis (IE).

DESIGN

A retrospective analysis of hospital discharges from 1993 to 2003.

SETTING

The Nationwide Inpatient Sample (NIS), which approximates a 20% sample of all U.S. acute care hospitals.

PARTICIPANTS

All patients aged 65 and older with a primary or secondary International Classification of Diseases, Ninth Revision, diagnosis code for IE were included.

MEASUREMENTS

The main outcome measures were in-hospital mortality and, for survivors, discharge disposition: to home (with home health care) or to a facility.

RESULTS

Hospitalizations for IE increased 26.0% over the 10-year period, from 3.19 per 10,000 elderly patients in 1993 to 3.95 per 10,000 in 2003. Over the study period, a trend toward increasing discharge to nursing home and decreasing discharge to home and home health care was evident. Discharge to home for survivors decreased from 57.7% to 35.0% over the study period, whereas discharge to nursing facilities increased from 27.7% to 44.3%. Over the 10-year study period, elderly patients hospitalized with IE were 2.3 times as likely to be discharged to a facility as to home.

CONCLUSION

Hospital discharge dispositions have changed for elderly patients admitted with IE. Changes in the patient's age, severity of illness, or comorbidities do not explain these trends. Financial incentives are the most likely factor influencing the substitution in discharge dispositions for elderly patients with IE.

Cost inefficiency and hospital health outcomes

This study explores the association between cost inefficiency and health outcomes in a national sample of acute-care hospitals in the US over the period 1999-2001, with health outcomes being measured by both mortality and complications rates. The empirical analysis examines health outcomes as a function of cost inefficiency and other determinants of outcomes, using stochastic frontier analysis to obtain hospital cost inefficiency scores. The results showed no systematic pattern of association between cost inefficiency and hospital health outcomes; the basic results were unchanged regardless of whether cost inefficiency was measured with or without using instrumental variables. The analysis also indicated, however, that the association between cost inefficiency and health outcomes may vary substantially across geographical regions. The study highlights the importance of distinguishing between 'good' costs that reflect the efficient use of resources and 'bad' costs that stem from waste and other forms of inefficiency. In particular, the study's results suggest that hospital programs focused on reducing cost inefficiency are unlikely to be associated with worsened hospital-level mortality or complications rates, while, on the other hand, across-the-board reductions in cost could well have adverse consequences on health outcomes by reducing efficient as well as inefficient costs.

Does the Patient's Payer Matter in Hospital Patient Safety?

BACKGROUND

Previous studies have documented that hospitals decrease costs in response to reimbursement cutbacks. However, research concerning how this may affect quality of care has produced mixed results. Until recently, the ability to study changes in patient safety and payment has been limited.

OBJECTIVE

The objective of the study was to determine whether changes in 4 hospital patient safety indicator (PSI) rates are related to changes in the generosity of payers over time.

DATA AND METHODS

Study data are drawn from 1995-2000 hospital discharges in 11 states in the Agency for Healthcare Research and Quality Healthcare Cost and Utilization Project State Inpatient Database. Following the same organizations over time, we estimate hospital fixed-effects regression models of the association of payer-specific time and post Balanced Budget Act (BBA) payment changes with risk-adjusted hospital PSI rates controlling for patient, organizational, and market characteristics. Four PSIs relevant to a large number of patients and hospitals that reflect general care processes are studied.

RESULTS

The time trend during 1995-2000 is consistently significantly positive for private and Medicare hospital PSI rates. Thus, after controlling for patient characteristics and organizational and market factors, performance worsened. The trend is less consistent for Medicaid and does not exist for self-pay hospital PSI rates. After adjusting for multiple comparisons, we also find that the Medicare trend is fairly consistently higher than that of the other payers. In contrast, there is a less consistent BBA effect, especially for Medicare.