Study: Hospital productivity better than expected

Evidence suggests that hospital productivity has lagged behind other industries, but a study published in Health Affairs concludes that the opposite is true.

Researchers at the Leonard D. Schaeffer Center for Health Policy and Economics analyzed productivity growth among U.S. hospitals in treating Medicare patients with heart attack, heart failure and pneumonia during 2002-2011. They did not adjust for trends in the severity of patients’ conditions or outcomes achieved after hospitalization.

Based on hospitals’ estimated treatment costs, growth appeared to be negative, with annual rates of -0.64 percent, -0.91 percent, and -0.39 percent for heart attack, heart failure, and pneumonia, respectively. But when patient severity and patient outcomes were accounted for, measured rates of productivity growth were positive for all study conditions, according to the authors.

Overall, rates of annual productivity growth were .78 percent for heart attack, .62 percent for heart failure and 1.9 percent for pneumonia. 

“In terms of the productivity of U.S. healthcare, the pattern of growth documented here suggests that at least in recent years—despite the concerns by observers noted above—hospitals have not suffered from what has been called a cost disease, in which a heavy reliance on labor limits opportunities for efficiencies stemming from technological improvement,” wrote lead author John A. Romley, economic at the Leonard D. Schaeffer Center, and colleagues.

They suggested further studies on productivity in sectors such as skilled nursing care or in accountable care organizations.

Health Affairs study

 

 

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