Unbiased Analysis of Today's Healthcare Issues

Why is end-of-life spending so high?

Written By: Jason Shafrin - Apr• 25•12

The answer is because using more intensive services does reduce mortality.

This is the finding of a recent JAMA paper. After controlling for patient case mix, the authors examine variation in hospital spending in the last year of a patient’s life. The authors note that “Higher-spending hospitals differed in many ways, such as greater use of evidence-based care, skilled nursing and critical care staff, more intensive inpatient specialist services, and high technology, all of which are more expensive.” Higher spending hospitals (on a per patient basis) tend to be hospitals with a larger volume of patients. They are also more likely to “be located in urban areas; be associated with regional cancer centers; have on-site computed tomography and magnetic resonance imaging scanners, cardiac catheterization laboratories, and cardiac surgery capability; and be early adopters of critical care response teams.”

Higher spending hospitals had overall reduced mortality rates for four disease considered. “In the highest- vs lowest-spending hospitals, respectively, the age- and sex-adjusted 30-day mortality rate was 12.7% vs 12.8% for AMI, 10.2% vs 12.4% for CHF, 7.7% vs 9.7% for hip fracture, and 3.3% vs 3.9% for colon cancer.”

One reason for these differences could be that high-spending areas could be located in richer areas where mortality rates are lower for a variety of reasons. Although unobserved heterogeneity in patient case mix is a problem with any study, the authors do stratify their results based on neighborhood income and find similar results.

The relevance of this study to the United States, however, is hard to determine. Although high spending hospitals decrease mortality in Canada, almost all hospitals in the U.S. would be considered high spending by Canadian standards. Thus, it is unclear that marginal returns to additional spending in the U.S. would be similar to what was observed in this study. In fact, studies in the United States by Barnato et al. and Goodman et al. show “…a positive association between spending and outcomes among low-intensity hospitals or regions but no association at average or higher intensity levels.”

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3 Comments

  1. Well, duh.

    Providing people with weekly doctor visits would probably also reduce mortality.

    The implicit conclusion of this article seems to be “Since we CAN reduce mortality by providing more intense (and expensive) hospital services, therefore we should.”

    This article simply documents that there is marginal benefit to more intense hospital services.

    Without examining and weighing the marginal cost, the conclusion is meaningless.

    Admittedly this is easier said than done, particularly when grandma or granddaughter won’t have to foot the bill for those extra hospital services.

  2. [...] from Jason Shafrin’s post in the Healthcare Economist. [...]

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