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Patients fare better when hospitals spend more upfront on their care, according to a new study comparing that to greater use of skilled nursing facilities after discharge.
The report, "Uncovering waste in U.S. healthcare: Evidence from ambulance referral patterns," was published recently in the Journal of Health Economics. MIT economists determined that greater spending on initial care following patient emergencies leads to better outcomes than hospitals that spend less at the beginning and then have more extensive use of long-term care.
The authors note that allocating a higher percentage of overall healthcare expenses to inpatient treatment is linked to lower mortality rates among Medicare recipients.
"We find that patients who go to hospitals that rely more on skilled nursing facilities after discharge, as opposed to getting them healthy enough to return home, are substantially less likely to survive over the following year," explained co-author Joseph Doyle, PhD, the Erwin H. Schell Professor of Management at the MIT Sloan School of Management.
On the other hand, "What types of hospitals are low-cost and have good outcomes? They spend a lot when you're there, initially, but a lot less [after] you leave the hospital,” Doyle added.
In designing the study, researchers took advantage of ambulance company practices which, in essence, randomized which hospitals received patients. The data set included about 2,500 ambulance companies and 3,000 hospitals.
The focus was on Medicare claims data for hospital admissions from 2002 to 2011, involving about 1.6 million patients. One-year mortality statistics were followed for the group.
Results indicate that, with the average 90-day spending on patients in the study at nearly $27,500, every additional increase in spending of about $8,500 reduced mortality risk about 2%. Furthermore, study authors note about a 5% increase in mortality at hospitals that have relatively high rates of spending on nursing facilities after discharge.
"We see this as a potentially novel quality measure for hospitals," Doyle said. "Hospitals that have that profile where they send patients to skilled nursing facilities have higher spending downstream, and they have worse outcomes."
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