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Surgery at High-Quality Hospitals Less Expensive for Medicare

September 12, 2016

Harvard TH Chan School of Public Health researchers discovered that patients who had major surgery at high-quality hospitals in the US cost Medicare less than patients who had surgery at low-quality hospitals.

“In much of health care, better care costs more money but surgery may be one situation in which getting care at a high-quality hospital not only saves lives, but also saves money,” Ashish Jha, MD, MPH, senior author of the study, said in a press release. “And that is a win for everyone.”

The researchers examined costs and outcomes data from the national Medicare program from 2011 to 2012, for five major surgical procedures, including: coronary artery bypass grafting, pulmonary lobectomy, endovascular repair of abdominal aortic aneurysm, colectomy, and hip replacement. The costs of the procedures and post-surgical care were calculated at both 30- and 90-day periods among 110,625 and 93,864 Medicare beneficiaries, respectively. High-quality hospitals were identified using two common measures of surgical quality: 30-day surgical mortality rates and patient-reported experience with care.


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Study results showed that on average for initial hospitalization for major surgery and the first 30 days of follow-up care Medicare spending was $32,000. Comparatively, for patients who were treated at a high-quality hospital, Medicare spending was $2700 less in the first 30 days compared to spending for patients at low-quality hospitals. Furthermore, after 90 days Medicare spent roughly $2200 less at high-quality hospitals.

According to the findings, roughly two thirds of Medicare’s savings at high-quality hospitals were driven by less use of post-acute care services, such as staying in a rehabilitation facility or care from home health aides, compared with low-quality hospitals.

“Of course, it is worth remembering that the goal of health care is not to save money, but to save lives,” Dr Jha concluded. “These high-quality hospitals, which had lower spending, had mortality rates that were less than half of what we saw at the low-quality hospitals. The findings should provide real impetus for policymakers to help patients choose high-quality hospitals.” —Julie Gould



Tsai TC, Greaves F, Zheng J, et al. Better Patient Care At High-Quality Hospitals May Save Medicare Money And Bolster Episode-Based Payment Models [published only September 2016]. Health Aff. 2016;35(9):1681-1689. doi: 10.1377/hlthaff.2016.0361.

Harvard T.H. Chan. Surgery at high-quality hospitals costs Medicare less than at low-quality hospitals [press release]. Published September 7, 2016. Accessed September 12, 2016.


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