Abstract

ObjectivesTo measure value in the delivery of inpatient care and to quantify its variation across U.S. regions.Data sources / Study settingA random (20%) sample of 33,713 elderly fee-for-service Medicare beneficiaries treated in 2,232 hospitals for a heart attack in 2013.Study designWe estimate a production function for inpatient care, defining output as stays with favorable patient outcomes in terms of survival and readmission. The regression model includes hospital inputs measured by treatment costs, as well as patient characteristics. Region-level effects in the production function are used to estimate the productivity and value of the care delivered by hospitals within regions.Data collection / Extraction methodsMedicare claims and enrollment files, linked to the Dartmouth Atlas of Health Care and Inpatient Prospective Payment System Impact Files.Principal findingsHospitals in the hospital referral region at the 90th percentile of the value distribution delivered 54% more high-quality stays than hospitals at the 10th percentile could have delivered, after adjusting for treatment costs and patient severity.ConclusionsVariation in the delivery of high-value inpatient care points to opportunities for better quality and lower costs.

Highlights

  • IntroductionThe Centers for Medicare and Medicaid Services implemented its Hospital-Value Based Purchasing and Hospital Readmissions Reduction Programs in 2013, and has recently been rolling out Advanced Alternative Payment Models.[3]

  • The Institute of Medicine has taken the position that “the only sensible way to restrain costs is to enhance the value of the health care system.”[1]

  • In studying inpatient treatment of heart attack in 2013, we focus on the value of care delivered within areas defined by hospital referral regions (HRRs) from the Dartmouth Atlas of Health Care.[33]

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Summary

Introduction

The Centers for Medicare and Medicaid Services implemented its Hospital-Value Based Purchasing and Hospital Readmissions Reduction Programs in 2013, and has recently been rolling out Advanced Alternative Payment Models.[3]. This growing emphasis on value has outpaced the development of practical metrics of value performance.[4] For therapeutic drugs, cost-effectiveness has long been the standard to evaluate treatments. The measurement of value is still more unsettled in other settings, such as hospital care, even as reimbursement has been tied to indicators of quality and cost

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