Health care quality and value: What’s cost got to do with it?

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Do patients get better quality care from more expensive hospitals?  A report published last Wednesday in the journal Health Affairs examined 25,000 insurance claims from auto workers in 10 metro markets. The outtake: Hospitals charging the most tended to be larger, have bigger market shares, and to be mentioned in magazine rankings. But on some measures, including readmission rates and outcomes in surgical, heart attack and pneumonia patients, they fared no better.

“There are big differences in the prices that are being paid, as much as 60 percent higher for the same thing in a local market. The bigger hospitals with the higher levels of technology are the ones getting the higher prices,” says Chapin White, Senior Policy Researcher at the Rand Corporation and a co-author of the study.

The most expensive hospitals were also far more likely to be listed in U.S. News & World Report‘s list of best hospitals in the U.S. While reasons why aren’t clear, it seems likely the result is a change in perception from doctors and patients.

“To a casual observer, it’s still clear that hospitals are advertising directly to consumers using these ratings systems, and are spending a fair amount of money on advertising. In the old days, people went where their doctor told them to go.  Today, it’s a more complicated mix of reputation-building,” White says.

Measuring Quality in Pharmacy

Quality measures have been evolving over every facet of healthcare, including pharmacy; a vital factor as most chronic diseases in the U.S. are treated with medication.

Patient involvement is critical to value, says Samuel Stolpe, Associate Director of Quality Initiatives for the Pharmacy Quality Alliance (PQA), Inc.

“Traditionally, quality improvement has been centered on streamlining dispensing processes and making sure they’re safe and appropriate. As ideas evolve around this new health care system, they have changed to be more encompassing of population management,” Stolpe says.

That means medication adherence, which on its own can be a cost-saver. A review by the Congressional Budget Office of Medicare’s Part D program found that increasing adherence by 1% could lead to a reduction of health care costs by one-fifth of 1% – a small percentage yet billions in savings.

Value is also measured by balancing cost and effectiveness; for example, taking medications for hypertension has clear benefits versus suffering a myocardial infarction.  Where the area gets grayer, Stolpe says, is in specialty medications, where costs can run into the tens of thousands per month.

Here, it’s harder for consumers to contribute because of a lack of cost transparency.

“I’m sure you’ve heard this analogy about how healthcare in structured in this country: ‘You pay an entrance fee, and you go into a grocery store and grab whatever you want.’  We don’t know what the prices are for things,” Stolpe says.

When and how does pricing make a difference in value, and how can we track this? What does “quality care” mean to administrators, doctors and patients? And what’s the moral borderline between higher-priced specialty care for a few versus population-wide interventions? Join us as we discuss  these questions and more in a live online Google+ Hangout this Thursday at 2pmET.  Participants include:

Chapin White, Senior Policy Researcher, Rand Corporation

Samuel Stolpe, Associate Director of Quality Initiatives, Pharmacy Quality Alliance, Inc.

Jeanne Pinder, Founder and CEO, Clear Health Costs

Donna Cryer, JD, CEO, CryerHealth

Tweet questions to #GreatChallenges – we’ll answer as many as we can on air. Click here to find out more and to watch the Hangout.