Tag Archives: NBGH

High-value hospitals in Italy and the United States

The Wall Street Journal today looks at hospitals in Italy’s Lombardy region. In this region, competition between public and private hospitals has resulted not only in reduced costs but also in improved quality. Here is an excerpt from the article:

In much of the country, regions have continued to use the standards of care and reimbursement rates recommended by Rome. Some also give preferential treatment to public hospitals, making it more difficult for private hospitals to qualify for public funds.

Lombardy, by contrast, has increased its quality standards, set its own reimbursement rates and, most important, put public and private hospitals on an equal footing by making each equally eligible for public funds. If a hospital meets the quality standards and charges the accepted reimbursement rate, it qualifies. Patients are free to choose between state-run and publicly funded private hospitals at no extra cost. Their co-pay is the same in either case. As a result, public and many private hospitals in Lombardy compete directly for patients and funds.

There are also regions in the United States that have exhibited higher value than others. Recent Milliman analysis looks at this dynamic. While the Wall Street Journal has correlated hospital improvement in Lombardy to increased private/public competition, the causal drivers behind the most efficient regions in the United States are less clear.  Here is an excerpt from that study:

We were surprised to find that the 16 [highest-value] cities have little in common when it comes to what we thought were key drivers, such as:

  • Hospital market concentration
  • Commercial payer market concentration
  • Wage index
  • Ratio of primary care to specialty care
  • Hospital Care Intensity index, a measure of the intensity of services provided in a locale

Prominent among our findings are the lack of consistent association of these characteristics among our set of high value cities. Our analysis was not designed to test for such associations for the entire nation. The authors hypothesize that hospitals can meet financial goals through controlling costs (strong management of resources) or by attempting to maximize revenue (high charges to private payers).

We note there may be some other factors common among the cities that are high value for hospital care, and finding those factors would be a great public service.

See the full analysis of high-value U.S. hospitals here.

Is your city high value?

A recent study seeks out locations where hospitals are able to provide high value care to both Medicare and commercial patients. Here is an excerpt:

Many private payers are concerned that current government (Medicare and Medicaid) provider payments get translated into higher provider charges to commercial payers, which increases private payer premiums and claims costs for self-insured plans. This study was commissioned to look at actual data from commercial insurers to help answer this question:“Are cities that are high value for Medicare inpatient care also high value for private payers, or do they look better because private payers were charged more to enhance inpatient revenue?”

There are important policy implications, depending on which part of the question above is correct. It is important to reframe the high value definition as those cities  and hospitals that provide the best inpatient hospital value for all payers, consumers and the community as a whole.

So where are the high value cities? Here is the list:

  • Tucson, Ariz.
  • Albuquerque, N.M.
  • Sarasota, Fla.
  • Akron, Ohio
  • Honolulu, Hawaii
  • Medford, Ore.
  • Boise, Idaho
  • Portland, Ore.
  • Portland, Maine
  • Pittsburgh, Pa.
  • Grand Rapids, Mich.
  • Knoxville, Tenn.
  • Asheville, N.C.
  • Newport News, Va.
  • Fargo, N.D./Moorhead, Minn.
  • Spokane, Wash.

More on hospital value

A new article in Health Leaders looks at the recent Milliman study commissioned by the National Business Group on Health, which identifies cities where hospitals are able to provide value on both Medicare and commercial business. In this article, Elliot Fisher of the Dartmouth Atlas weighs in:

Elliott S. Fisher, MD, director of Population Health and Policy for the Dartmouth Institute, said research focuses on reducing unnecessary hospital stays.

“This important study from NBGH confirms that communities that are able to care for Medicare patients with fewer hospitalizations are able to do the same for their under-65 population. But to slow the growth of spending, we also need to address the problem of prices.”