More Hospitalist Spending Does Not Mean Better Outcomes

Marcia Frellick

March 13, 2017

Higher spending by individual hospitalists, in terms of more expensive tests or procedures, does not result in better patient outcomes, a new study shows.

Yusuke Tsugawa, MD, MPH, PhD, from the Harvard T. H. Chan School of Public Health in Boston, Massachusetts, and coauthors also found that healthcare spending varied more among physicians in the same hospitals than between hospitals.

Although other studies have examined regional variations and differences across hospitals, this study, published online March 13 in JAMA Internal Medicine, is one of the first to look at individual physician spending in the context of patient outcomes, according to the authors.

They conclude that directing efforts to reduce waste to both hospitals and individual physicians, who make the clinical decisions, may be more effective than targeting hospitals alone.

Traditionally, federal efforts have focused on measures such as hospital value-based purchasing and penalties for 30-day readmissions, "implicitly assuming that hospitals can shape individual physician behavior," they note.

40% Spending Variation

Dr Tsugawa and colleagues analyzed a 20% random sample of Medicare fee-for-service beneficiaries who were at least 65 years old and hospitalized with a nonelective condition between 2011 and 2014.

The analysis included 485,016 hospitalizations treated by 21,963 hospitalists in 2837 hospitals and 839,512 hospitalizations treated by 50,079 general internists at 3195 hospitals. Among hospitalists, spending variation was 8.4% across physicians vs 7.0% across hospitals. For general internists, the variation was 10.5% across physicians vs 6.2% across hospitals.

Specifically, Dr Tsugawa and colleagues found that hospitalists in the top quartile spent 40% more than those in the lowest ($1055 vs $743 per hospitalization in adjusted Medicare Part B spending).

However, physicians' spending levels had no bearing on patients' 30-day mortality (adjusted odds ratio [aOR] for additional $100 in physician spending, 1.00; 95% confidence interval [CI], 0.98 - 1.01; P = .47) or readmission rates (aOR, 1.00; 95% CI, 0.99 - 1.01; P = .54) for hospitalists within the same hospital. They observed similar results among general internists. The authors adjusted for patient characteristics, illness severity, and hospital fixed effects.

These relationships did not change after adjusting for physician characteristics including age, sex, medical school, and whether the physician had allopathic or osteopathic training.

The findings suggest that physicians may be able to use fewer resources without compromising outcomes and that incentives that reward that within hospitals are needed.

"Policy interventions that target physicians within hospitals (eg, physician-level pay-for-performance programs and reporting of how resource use of each physician compares with other physicians within the same hospital) should be developed and evaluated," they write.

Some changes under the Medicare Access and Children's Health Insurance Program (CHIP) Reauthorization Act (MACRA) will address that point, as most physicians will be measured on the value of their care.

Study Adjusted for Patient Severity

In an accompanying editor's note, Gregory Curfman, MD, from Harvard Medical School in Boston, Massachusetts, noted that the split-sample design of the study helped reduce the bias of a physician treating more complex patients in 1 year, and therefore having higher spending and worse outcomes.

To adjust for that, he notes, the researchers used Part B spending per hospitalization for 2011 and 2012, and then clinical outcomes (30-day readmission and 30-day mortality rates) for 2013 and 2014.

"From this study, we can conclude that differences in the utilization of health care services among hospitalists are not associated with differences in clinical outcomes, adding to the growing body of fascinating research on the complex relationship between spending and health," Dr Curfman concludes.

A limitation of the study is that analysis included only hospitalized Medicare patients, so the results may not be generalizable to non-Medicare populations or those with surgical conditions or in outpatient care.

This research was supported by the National Institutes of Health and the Japan Foundation Center for Global Partnership. One study coauthor reports being a director of Aetna. Another reports receiving consulting fees unrelated to this work from Pfizer, Hill Rom Services, Bristol-Myers Squibb, Novartis Pharmaceuticals, Vertex Pharmaceuticals, and Precision Health Economics, a company providing consulting services to the life sciences industry. The other authors and Dr Curfman have disclosed no relevant financial relationships.

JAMA Intern Med. Published online March 13, 2017. Article full text, Editorial full text

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