Effects of Admission to a Teaching Hospital on the Cost and Quality of Care for Medicare Beneficiaries

Abstract

BACKGROUND AND METHODS: We studied the effects of admission to a teaching hospital on the cost and quality of care for patients covered by Medicare (age, 65 years old or older). We used data from the National Long Term Care Survey and merged them with Medicare claims data. We selected the first hospitalization for hip fracture (802 patients), stroke (793), coronary heart disease (1007), or congestive heart failure (604) occurring between January 1, 1984 and December 31, 1994, and calculated all Medicare payments for inpatient and outpatient care during the six-month period after admission. Survival was assessed through 1995. Hospitals were classified as major or minor teaching hospitals (with minor hospitals defined as those in which the number of residents per bed was less than the median number for all teaching hospitals) or as private nonprofit, government (i.e., public), or private for-profit hospitals. RESULTS: Medicare payments for the six-month period after hospitalization were highest for patients initially admitted to teaching hospitals for the treatment of hip fracture, stroke, or coronary heart disease and for patients initially admitted to for-profit hospitals for the treatment of congestive heart failure. As compared with payments to for-profit hospitals, payments to major teaching hospitals for hip fracture were significantly higher, payments to government hospitals for coronary heart disease were lower, and payments to government and nonprofit hospitals for congestive heart failure were lower. After adjustment for patients' characteristics and social subsidies, major teaching hospitals had the lowest mortality rates (hazard ratio for death, 0.75, as compared with for-profit hospitals; 95 percent confidence interval, 0.62 to 0.91). For individual conditions, the only significant survival advantage associated with admission to major teaching hospitals was for hip fractures (hazard ratio, 0.54, as compared with for-profit hospitals; 95 percent confidence interval, 0.37 to 0.79). CONCLUSIONS: Although admission to a major teaching hospital may be associated with increased costs to the Medicare program, overall survival for patients with the common conditions we studied was better at these hospitals, especially for patients with hip fractures.