Research Article: Geographic variation in the delivery of high-value inpatient care

Date Published: March 25, 2019

Publisher: Public Library of Science

Author(s): John Romley, Erin Trish, Dana Goldman, Melinda Beeuwkes Buntin, Yulei He, Paul Ginsburg, Ravishankar Jayadevappa.


To measure value in the delivery of inpatient care and to quantify its variation across U.S. regions.

A random (20%) sample of 33,713 elderly fee-for-service Medicare beneficiaries treated in 2,232 hospitals for a heart attack in 2013.

We estimate a production function for inpatient care, defining output as stays with favorable patient outcomes in terms of survival and readmission. The regression model includes hospital inputs measured by treatment costs, as well as patient characteristics. Region-level effects in the production function are used to estimate the productivity and value of the care delivered by hospitals within regions.

Medicare claims and enrollment files, linked to the Dartmouth Atlas of Health Care and Inpatient Prospective Payment System Impact Files.

Hospitals in the hospital referral region at the 90th percentile of the value distribution delivered 54% more high-quality stays than hospitals at the 10th percentile could have delivered, after adjusting for treatment costs and patient severity.

Variation in the delivery of high-value inpatient care points to opportunities for better quality and lower costs.

Partial Text

The Institute of Medicine has taken the position that “the only sensible way to restrain costs is to enhance the value of the health care system.”[1] Value is an elusive term in health care, but good value tends to mean high quality in relation to cost [2], and an array of initiatives in the private and public sectors seek to improve quality while containing costs. For example, the Centers for Medicare and Medicaid Services implemented its Hospital-Value Based Purchasing and Hospital Readmissions Reduction Programs in 2013, and has recently been rolling out Advanced Alternative Payment Models.[3]

Providers deliver high-value care by producing good quality in relation to their costs.[2] Accordingly, we specify and analyze a production function for inpatient care; the output and inputs of our production function are detailed below. This analytical framework, and the closely related framework for cost functions, have been applied extensively to hospitals.[9–23]

In our 2013 sample, 33,713 elderly fee-for-service beneficiaries were admitted with a heart attack to 2,232 hospitals in 304 hospital referral regions (HRRs) with at least 11 heart-attack stays in our database of Medicare claims. Fifty-one percent of these patients were female, and the average age was 80 years. The cost of these hospital stays averaged $14,900 in 2014 dollars. In terms of outcomes, 87% of patients survived at least 30 days beyond the admission, while 86% of these survivors avoided an unplanned readmission within 30 days of discharge. The overall rate of high-quality hospital stays (survival without readmission) was 74%.

This study has used a framework for the production of high-quality health care to develop and implement a measure of the value of inpatient care among Medicare beneficiaries with heart attacks in 2013. Defining high-quality hospital stays by survival at least thirty days beyond the admission and avoidance of an unplanned readmission within thirty days of discharge, we documented substantial variation in the value of the care that was delivered. In a key finding, hospitals located in the hospital referral region (HRR) at the 90th percentile of the value distribution delivered 54% more high-quality stays than hospitals located in the HRR at the 10th percentile would have been expected to produce if their treatment costs and patient severity had been the same. Our findings were robust to a number of alternative approaches to value measurement.




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