By Jane Norman, CQ HealthBeat Associate Editor
October 6, 2011 -- The nation's worst hospitals care for double the share of elderly black patients as the best ones, as well as a larger proportion of elderly Hispanic and Medicaid patients, a recent report said.
The worst hospitals are far more likely to be small or public hospitals in the South, with the best hospitals usually urban teaching hospitals.
The finding has broad implications as the Medicare system moves toward a value-based purchasing approach in which lower-quality, high-cost hospitals are penalized financially. Some hospitals may be put at risk of failure—thereby reducing access for poor and minority patients—if their profit margins are affected, the authors said.
The study, by Ashish K. Jha and Arnold M. Epstein of the Harvard School of Public Health and E. John Orav of Harvard Medical School, was published in the October issue of the journal Health Affairs and funded by the Commonwealth Fund.
They wrote that the health care law (PL 111-148, PL 111-152) authorizes the Center for Medicare and Medicaid Services to make higher payments to hospitals that demonstrate better-quality performance and to reduce reimbursements to those that don't improve. The best outcome for hospitals will be to increase quality and reduce costs, but whether they can achieve both is unclear, they said.
Using data from the government and the American Hospital Association, they grouped 3,229 U.S. hospitals into categories of high quality and low cost, or "best"; high quality and high cost; low quality and low cost; and low quality and high cost, or "worst." The hospitals were not identified by name.
Of them, 122 ranked as the "best" and 178 as the "worst." The best hospitals were more likely to be located in the Northeast, to be nonprofit and to have a cardiac intensive care unit. They were "significantly" more likely to be major teaching hospitals, be in urban areas and have higher nurse-to-patient ratios.
The authors said 6.8 percent of those discharged from the best hospitals were elderly black patients, compared to almost 15 percent of such patients discharged from the worst hospitals. There were similar findings for Medicaid patients.
Outcomes also were different between categories of hospitals for patients admitted with acute myocardial infarction or pneumonia. Patients admitted to low-cost, low-quality hospitals had a 12 percent to 19 percent higher likelihood of death compared to those admitted to the best hospitals.
"Our findings have important implications" for the value-based purchasing program, the authors said. The program now focuses on quality, but Congress also wants Medicare to pay closer attention to costs per case when it comes to payments, and that likely will become a key feature of future payment changes, they said. Even if costs aren't counted, reduced payments to hospitals in the future will mean hospitals have to focus more on efficiency, they said.
It's also possible that hospitals that perform poorly could catch up, and that happened in a Centers for Medicare and Medicaid Services demonstration program, they said.
"It is unclear why some hospitals are able to provide high-quality care at comparatively low cost, while other hospitals struggle to do so," they added. "It is tempting to assume that high-cost, low-quality hospitals are mismanaged, and this may be true. Whether having a greater proportion of minority and Medicaid patients puts these hospitals at a disadvantage is unclear."
Nonetheless, ensuring lower-performing hospitals provide high-quality care is critical if the nation is to make headway in reducing disparities, they said. The 1 percent of Medicare reimbursements at risk might seem modest, but given that many hospitals are running at zero or negative margins, "even losing a portion of that one percent may put some hospitals at risk of financial failure," they said.
In a separate report also published in Health Affairs, the Center for Studying Health System Change reported that it might be just as important to educate Hispanic patients about how to take charge of their own care as expanding access to care. The report, funded by the Robert Wood Johnson Foundation, said that active participation by patients, or how confident, skillful and knowledgeable they feel about improving their health care, is important.
"The findings in this study suggest that lower patient activation may be an important reason for greater unmet medical need, particularly among Hispanics," wrote the authors—Peter J. Cunningham, of the center; Judith Hibbard, of the University of Oregon; and Claire B. Gibbons of the Robert Wood Johnson Foundation.
"Historically, health policy makers have focused on improving the functioning of various components of the delivery system and on addressing gaps in coverage," they said. "Yet evidence is mounting that policymakers also need to focus on enabling and supporting consumers so they can be effective participants in the system."