After analyzing hospital data, researchers found that the "worst" hospitals—those characterized by low quality and high costs—have double the proportion of elderly black patients as the "best" hospitals, which have high quality and low costs. Similar disparities were found for elderly Hispanic and Medicaid patients.
Hospitals that can simultaneously provide high-quality care and manage their costs well are likely to come out ahead under health reform. That's because the law authorizes the Centers for Medicare and Medicaid Services to make higher payments to hospitals that achieve better performance and cut reimbursements for those that fail to improve. However, it is unclear whether hospitals will be able to achieve both goals. In this Commonwealth Fund–supported study, researchers assigned hospitals to one of four categories. These include the "best" hospitals (high quality/low cost) and the "worst" hospitals (low quality/high cost), as well two categories that straddle those two worlds—high quality/high cost and low quality/low cost.
The study's findings have important implications for Medicare's new value-based purchasing program, through which higher-performing hospitals are poised to benefit financially. "The worst institutions in particular will have to improve on both costs and quality to avoid incurring financial penalties and exacerbating disparities in care," the authors conclude.
The study was drawn from hospital data from various sources, including Medicare, Hospital Compare, the American Hospital Association, and the Hospital Consumer Assessment of Healthcare Providers and Systems. Quality scores were assigned by using process measures (e.g., giving heart attack patients aspirin upon admission to the hospital) for acute myocardial infarction, congestive heart failure, pneumonia, and prevention of surgical complications.
The hospitals that perform worse on both quality and cost measures care for greater numbers of elderly black, elderly Hispanic, and Medicaid patients. These institutions will have to improve on both fronts to achieve parity with other hospitals and to avoid financial penalties.