Study Finds Treatment Costs at Major Teaching Hospitals Lower Than at Non-Teaching Hospitals

Treatment at a major teaching hospital was associated with lower costs at 30 days and similar costs at 90 days compared with treatment at nonteaching hospitals among Medicare beneficiaries hospitalized for common medical conditions and surgical procedures, according to new study findings.

The study – Comparison of Costs of Care for Medicare Patients Hospitalized in Teaching and Nonteaching Hospitals – published in JAMA, sought to compare total standardized costs at 30 days by hospital teaching status for common conditions. The study assessed the costs of hospitalizations among US Medicare beneficiaries 65 years and older at major, minor, and nonteaching hospitals from January 1, 2014, to November 30, 2015, for 15 medical conditions and 6 surgical procedures. The study assessed 1,249,006 hospitalizations among Medicare beneficiaries at 3,064 hospitals.

The study found that among Medicare beneficiaries hospitalized for common medical and surgical conditions, those hospitalized at a major teaching hospital had lower total standardized costs at 30 days compared with those at minor teaching hospitals and nonteaching hospitals. These differences persisted up to 90 days for surgical procedures, whereas costs of care were similar for medical conditions. Although initial hospitalization costs were higher at major teaching hospitals, in part owing to higher outlier payments for the sickest patients, spending on readmissions and post–acute care services was lower, leading to lower overall spending at 30 days. The lower readmission and post–acute care spending was associated with lower odds of having any readmission or post–acute care services use and lower mean costs among those who used these services. This pattern was largely consistent across individual medical and surgical conditions. When including IME payments, which are designed to pay for extra costs associated with training the next generation of physicians, major teaching hospitals had higher total spending at 30 and 90 days.

The association between treatment at a major teaching hospital and similar or lower total spending may seem unexpected given a general consensus that teaching hospitals are more expensive and that the involvement of trainees in patient care is relatively inefficient. This study suggests that although costs are somewhat higher for the initial hospitalization at major teaching hospitals, spending after hospital discharge, particularly on post–acute care services, is generally lower.

Read more:

• Comparison of Costs of Care for Medicare Patients Hospitalized in Teaching and Nonteaching Hospitals. JAMA. June 7 2019