Laggards no more: Productivity analysis puts hospitals on plus side

Hospitals may have a reputation for being less than efficient, but an analysis of Medicare patients treated for MI, heart failure and pneumonia challenges that notion. Productivity in hospitals actually has grown in recent years, researchers report in Health Affairs.

John A. Romley, PhD, and colleagues at the Leonard D. Schaeffer Center for Health Policy and Economics at the University of California in Los Angeles evaluated hospital productivity between 2002 and 2011, adjusting for patient severity and outcomes at 30 days. They selected MI, heart failure and pneumonia in Medicare beneficiaries because the conditions are leading causes of death in the U.S., have high hospital readmission rates and are included in Medicare quality metrics.

Based on Medicare data, they identified more than 400,000 patient stays at 3,315 acute hospitals for MI and more than 900,000 patient stays at 3,612 hospitals for heart failure over the study period. Unadjusted analyses, with output defined as the number of patient stays, showed negative productivity growth for all three conditions.

When they adjusted for patient severity, productivity growth shifted positive for pneumonia. It remained negative for MI and heart failure, although heart failure showed improvement. With output defined as patient stays with 30-day readmission-free survival, productivity turned positive for all three conditions.

MI and heart failure made substantial gains when the time frame was extended to one year. MI productivity posted a gain of 1.8 percent and heart failure was just short of 1.5 percent.

Romley et al pointed out that the Affordable Care Act adjusted the reimbursement policy for hospitals with a formula that ties annual payment updates with productivity growth in the broader economy. The approach has raised concerns that hospitals may not be able to keep up, which might affect the quality of care.

“Our study suggests that concerns about linking provider payment to economywide productivity growth may be overstated, at least in the inpatient setting,” they wrote. “U.S. hospitals have been able to improve patient outcomes (as measured by survival and readmission, which [the Centers for Medicare & Medicaid Services] tracks for the conditions studied here) in relation to hospital resource (and patient severity) levels.”

The study was published online Feb. 11.