03/22/2013 05:27 pm ET Updated Dec 06, 2017

Why Hospital Choice Matters

As our health care system moves from compensating providers on the basis of quantity of care to quality of care, it's very important to measure hospital performance. But a key limitation for that measurement is patient selection.

A large body of research suggests that it doesn't matter where patients go for treatment. Teaching hospitals, for example, have been found to achieve modestly better health outcomes. Unfortunately, patients in worse health tend to choose or are referred to hospitals based on the facilities' capabilities. So hospitals with higher levels of treatment intensity -- meaning teaching hospitals or hospitals that perform the latest procedures -- could appear to have poorer grades on health care report cards because they are treating the sickest patients.

My research shows not only that it matters where you go for emergency treatment, but that it could actually lead to a 30 percent better survival rate.

To address the issue of patient selection, my colleagues and I developed a framework using ambulance transport decisions across the country based on Medicare data. We focused on more critically-ill patients who required the same advanced level of ambulance capability, but who were effectively randomly assigned ambulance companies for transport to nearby hospitals.

In a second framework, we studied patients who lived on opposite sides of ambulance service area boundaries in New York. To the extent that the neighbors were similar to each other, the boundary created an exogenous variation in the hospitals to which patients were transported.

Both frameworks showed that hospital choice matters for health outcomes. According to the Medicare data study, teaching hospitals have a 15 percent lower mortality rate than non-teaching hospitals. And within teaching hospitals, facilities with a higher intensity of care have higher survival rates. Overall, hospitals with a 50 percent increase in treatment intensity are associated with a 30 percent reduction in mortality.

Looking at the New York data, patients taken to high treatment intensity or teaching hospitals had a 20 percent lower mortality rate.

We also studied all of the hospitals' quality characteristics to determine if some indicated better outcomes than others. The data suggests that teaching hospitals, hospitals that are early adopters of new technologies, and hospitals that score well on best-practice measures have lower mortality rates when using exogenous variation in hospital assignment. In a horse race of hospital characteristics, hospitals with higher treatment intensity levels continue to have lower mortality.

It would be wonderful if cutting back on health care spending wouldn't cause any harm. But our study suggests that some caution is warranted in achieving that free lunch when it comes to emergency care. The results also suggest a new result: Hospital choice can make a big difference in survival rates.

Prof. Joseph Doyle is the coauthor of "Measuring Returns to Hospital Care: Evidence from Ambulance Referral Patterns." To read the full paper, please click here.

For more by Joseph Doyle, click here.

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