Healthcare Spending: Higher Prices Don’t Mean Better Care

Ordering  more tests and follow up examinations of a more expensive nature doesn’t ensure better health outcomes, in fact hospitalized patients who carry out such strategies are equally likely to be readmitted or to die as patients treated by physicians, doctors and other health experts who carry out fewer or more economically feasible tests.

The scientists did not find any correlation between lower- and higher-spending doctors based on patient mortality over a course of 30 days, nor did they see any variation in readmission rate. Both of these factors are considered as major influencers of quality of care evaluation.

This revelation comes according to study, published in JAMA Internal Medicine on March 13.

According to the scientists, this is the first study of its kind to investigate the link between an individual’s healthcare spending habits in the realm of medicine and health outcomes.

The Ruth L. Newhouse Associate Professor of Health Care Policy at Harvard Medical School, and the senior author of the study, Anupam B. Jena had this to say regarding the study’s findings, “If you spend more money on a car or a TV, you tend to get a nicer car or a better TV. Our findings show that’s not the case when it comes to medical care. Spending more doesn’t always mean you get better health.”

The scientists do admit that past researches on topics such as health outcomes and the link between between geographic locations and between healthcare facilities has prdouced unreliable results, but a greater proportion of the evidence shows that higher spending on healthcare rarely translates to better health outcomes.

The scientists highlighted previous studies lacked a crucial part of the mystery, which is how individual doctors spending within the same hospital means for a patient’s health outcome. This is crucial because doctors set the charge for how a person’s money is going to be spent as the consulting doctor orders tests and examinations etc.

Before they reached their conclusions, the scientists assessed the patterns on partcipants who were 65 years of age or older and were Medicare fee-for-service patients, treated from 2011 to 2014.

What was surprising was the fact that according to the scientists’ data healthcare expenditure differed more within a hospital than across other healthcare facilities, despite eliminating covariables within the hospital and patient settings.

A little over than 8 percent of the dissimilarity in healthcare expenditure could be due to the difference in a doctor’s behaviors whereas the difference in hospitals accounted for 7 percent of the difference in healthcare spending.

Despite the results showing that more is not necessarily better, many healthcare experts advise not to save money on healthcare expenses in order to improve a patient’s healthcare outcome.

Jena said, “Say you have two painters. One usually takes two hours to paint a room, and one takes six hours. You can ask the slow painter to hurry up, but you might end up with a room that’s sloppily painted, or with one of the walls the wrong color. That’s obviously a situation we want to avoid in health care.”

Overall though the difference between the doctor’s way of conducting his business can have more of an impact on a patient’s health outcome than previously thought. Moreover most doctors consider the possible consequences of their actions.

The researchers believe that most doctors don’t keep in mind the costs while ordering tests. In order to mitigate such irresponsible behavior, healthcare policymakers and governing bodies could design policies that address these issues by creating rewards to minimize excessive spending.

Jena also believes that not all doctors are thrifty spenders, some are just more effective at their jobs than others, which is why they could diagnose patients’ conditions at an earlier stage, without ordering extra tests, thus reducing costs. Which is why some doctors may need to order extra tests and require help of medical facilities to reach a proper diagnosis or an effective treatment course.

What’s clear from the study is that even at a small scale, patient’s health can be impacted indirectly, while also highlighting the impact of decisions made by individual doctors on health care spending.

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