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Variations in Hospital Resource Use for Medicare and Privately Insured Populations in California

Laurence Baker of Stanford University, Elliott Fisher and John Wennberg of Dartmouth

This Health Affairs article by Baker, Fisher, and Wennberg on a study of variations across California hospitals in hospital resource use for chronically ill patients covered by Medicare HMOs and private insurers found substantial variation in all of the coverage groups studied.

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February 2008

The large variation among hospitals in the intensity of treatment provided to Medicare fee-for-service beneficiaries often parallels other patient populations. In a CHCF-sponsored study of California hospitals published as a Health Affairs Web exclusive, researchers found those hospitals that admit many Medicare fee-for-service patients for end-of-life treatment also often admit other patients at high rates.

"Earlier research has established that some hospitals provide significantly more resource-intensive treatment to Medicare fee-for-service beneficiaries than others, and that on average, higher-intensity hospitals do not achieve better outcomes," notes study lead author Laurence Baker, professor of health research and policy at Stanford University. "In this study, we find similar variations in different age groups and for private insurers in addition to Medicare. Across different age groups and insurers, patients at some hospitals spent many more days in the hospital in their last two years of life than similar patients at other hospitals. This means that important savings could come from improving health care delivery for a range of populations."

Using data collected by the California government, Baker and coauthors Elliott Fisher and John Wennberg of Dartmouth Medical School examined records of all patients who died in the state between January 1, 1999, and December 31, 2003, and who had at least one stay in a general acute-care hospital during their last two years of life. To measure treatment intensity, the researchers examined the total number of inpatient days for which patients were hospitalized in their last two years of life. They studied patients covered by Medicare fee-for-service, Medicare HMOs, private preferred provider organizations, fee-for-service insurers, and private HMOs.

The work clarifies the role that hospitals and health plans play in driving treatment patterns. "The marked differences in admission rates across hospitals and the finding that those with high admission rates for Medicare fee-for-service patients also have high rates for other payers suggest that both private and public payers could benefit from efforts to align incentives for more efficient use of the hospital as a site of care," the authors conclude.

The complete article is available free of charge on the Health Affairs site through the External Link below. A prior study is available through the Related CHCF Pages.