Comparison of Costs of Care for Medicare Patients Hospitalized in Teaching and Nonteaching Hospitals

Abstract

Little empirical work has been performed on whether teaching hospitals are more expensive when considering total costs of care for an acute care episode. To compare total standardized costs at 30 days by hospital teaching status for common conditions. This cross-sectional study assessed the costs of hospitalizations among US Medicare beneficiaries 65 years and older at major, minor, and nonteaching hospitals from January 1, 2014, to November 30, 2015, for 15 medical conditions and 6 surgical procedures. Data analysis was performed from February 26, 2019, to April 16, 2019. Hospital teaching status (major, minor, and nonteaching hospitals). The primary outcome was 30-day total standardized costs to Medicare for hospitalizations for all 21 conditions in aggregate as well as stratified by medical and surgical condition categories. Secondary outcomes included 30-day spending for individual components of care (index hospitalization, physician services, readmission, and outpatient and post-acute care services) as well as total standardized costs at 90 days. The sample consisted of 1 249 006 hospitalizations at 3064 hospitals (232 [7.6%] major teaching, 837 [27.3%] minor teaching, and 1995 [65.1%] nonteaching hospitals). Treatment at a major teaching hospital was associated with lower total 30-day adjusted standardized costs ($18 605 vs $18 793 at minor teaching hospitals and $18 873 at nonteaching hospitals; difference between major and nonteaching hospitals: -$268; 95% CI, -$456 to -$80; P = .005). Treatment at a major teaching hospital was associated with higher spending for the index hospitalization ($8529 vs $8370 at minor teaching hospitals and $8180 at nonteaching hospitals; difference between major and nonteaching hospitals: $349; 95% CI, $308-$390; P < .001) but lower physician costs ($677 vs $725 at minor teaching hospitals and $728 at nonteaching hospitals; difference: -$50; 95% CI, -$60 to -$41; P < .001). Furthermore, post-acute care costs at 30 days were lowest at major teaching hospitals ($6015 vs $6239 for minor teaching hospitals and $6260 for nonteaching hospitals; difference: -$245; 95% CI, -$375 to -$115; P < .001). Thirty-day total costs were lower at major teaching hospitals compared with nonteaching hospitals for 12 of the 21 individual conditions examined. There was no difference in costs by teaching status at 90 days ($24 982 at major teaching hospitals vs $24 959 at minor teaching hospitals vs $25 044 at nonteaching hospitals; difference: -$61; 95% CI, -$310 to $188; P = .63). Medicare patients treated at major teaching hospitals had lower Medicare spending at 30 days and similar costs at 90 days compared with Medicare patients at nonteaching hospitals. These findings appear to raise doubts that care at teaching hospitals is necessarily more expensive than care at nonteaching hospitals.