Pay more, get the same—or less. A new study in Health Affairs finds that health care, unlike practically every other sector of our economy, is the one area where price and quality are totally uncorrelated. According to the WSJ, the study authors paired newly released data on hospital prices with quality metrics. The result throws the dysfunction of our system into sharp relief:
However, more qualitative, albeit rudimentary data, did not show expensive hospitals excelling. They performed worse than low-priced hospitals in keeping patients from being readmitted within a month and for avoiding blood clots and death in surgical patients. They also did no better in keeping heart attack and pneumonia patients alive than did low-price hospitals, although they were more successful in averting death for heart failure patients. Their overall ratings among patients were not significantly different than low-price hospitals.
The good news is that we have started some experiments to improve this situation. The bad news is that these experiments haven’t been as successful as we need them to be. The Affordable Care Act, for example, set up what are know as Accountable Care Organizations, or ACOs. ACOs are provider groups that make a deal with the government: when they save money on Medicare patients relative to certain cost targets, they get to keep half the savings for themselves, while the government keeps the other half. When we last covered ACOs on The Feed, we mentioned that the data for their success was mixed, with only nine out of 32 ACOs in the Obamacare pilot program having saved a significant amount of money. New results on a wider sample, however, are slightly better: Nearly half of 114 new ACOs under Obamacare have saved Medicare some money.Yet even these new results are not all that encouraging. Only 29 of the 114 saved enough to spilt proceeds with the government. We need new experiments of this kind yielding better outcomes, and we need them quickly.