The relationship
p of hospital
p
quality
q
y
and cost per case in Hawaii
JJack
k Ashby
A hb and
d Deb
D b Juarez
J r
Hawaii Medical Service Association
(Blue Cross of Hawaii)
Academyy Health Annual Research Meeting
g
June 29, 2010
Hynes Veterans Memorial Convention Center, Boston
Introduction
 Assumption that high quality care leads to lower
g
manyy policy
p y initiatives
health care costs undergirds
 Value-based purchasing
 Bundled payment
 Accountable care organizations
 Evidence linking high quality to low costs limited
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2
Previous research
 High quality correlated to low per capita costs
(State-level study by CMS’s Steve Jencks, 2003)
 High quality linked to low per case costs for the
specific
p
diagnoses
g
covered byy quality
q
y measures
(Report on Premier’s P4P demo, 2008)
 Previous research does not link overall hospital
quality and cost per case
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3
Objective
Immediate:
. . . to determine whether overall quality of inpatient
care is correlated with average cost per case
at the hospital level
Longer term:
. . . to determine whether change in quality is
correlated with change in cost per case
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4
Tools needed to assess relationship of
hospital quality and cost per case
 Measure of hospitals’ costs that can be applied
g hospitals
p
across widelyy differing
 Broad measure of hospital quality
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5
Methods and data for standardized cost
per case
 Covers all payers
p
care onlyy
 Acute inpatient
 2008 data from Medicare cost reports and state
data consortium
 Standardized for factors thought to be beyond
hospitals’ control
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6
Standardization process
 Cost adjustments:
 Case mix and severity of illness (MS-DRGs)
 Teaching intensity
p
y
 Children’s specialty
 Teaching and childrens’ based on regression model:
 Data
D t ffor allll acute
t care h
hospitals
it l iin CA
CA, WA,
WA and
d HI
 Teaching--residents-per-bed; childrens’--dichotomous
 Model did not support adjustment for low-income share
or Medicare share of discharges
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7
Methods and data for quality scores
 Composite measure--46 indicators in 5 dimensions
 Weighting of dimensions follows the design of
HMSA’s pay-for-performance system:
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CMS core measures
23 6%
23.6%
Get With The Guidelines
(stroke and CAD)
14.6%
HCAHPS
23.6%
Surgical and maternity complications
23.6%
Internal quality initiatives
15.1%
8
Correlation matrix for quality dimensions
Internal
quality
initiatives
CMS core
measures
Complications
Get With
The
Guidelines
Internal quality
initiatives
1.0
CMS core
measures
0.15
1.0
Complications
p
0.11
0.20
1.0
Get With The
Guidelines
0.30
0.78
-0.22
1.0
HCAHPS
-0.24
0.74
0.36
0.45
Note Yellow shaded indicates statistically significant at p<0
Note:
p<0.05
05
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HCAHPS
1.0
Correlation of quality dimensions to
standardized cost per case
0
-0.1
Coeffic
cient
-0.2
0 2
-0.3
-0.4
-0.5
-0.6
-0.7
-0.8
Overall
IQI
GWTG
Comp.
Core
HCAHPS
N t Yellow
Note:
Y ll iindicates
di t statistically
t ti ti ll significant
ig ifi
t att p < .05
05 or b
better
tt
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Relationship of composite quality score and
standardized cost per case
Cost per cas
se
1.6
High cost
Low quality
1.4
1.2
1.0
0.8
Low cost
High quality
06
0.6
0.4
07
0.7
08
0.8
09
0.9
10
1.0
11
1.1
12
1.2
13
1.3
Quality as represented by P4P measures
Note: Statistically significant at p = 0.011
0 011
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Limitations
 Small sample size (13 hospitals)
 Data constraints resulted in:
 Three acute care facilities excluded (DoD, Kaiser,
childrens’)
 Limited geographic representation for regression
analysis
 Composite quality measure missing some aspects of
patient safety
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Research and policy implications
 Only 1 of 5 dimensions significantly correlated
with costs implies a broad composite needed to
adequately
d
t l representt quality
lit off care
g association between q
qualityy and cost per
p
 Strong
case supports further investment in quality
improvement
 Next step: measure relationship of change in
quality and change in cost per case
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13