Heart Bypass Study Challenges Quality Assumptions

A report published by the Pennsylvania State Health Care Cost Containment Council examined the average cost for heart bypass procedures and quality outcomes, comparing hospitals in the Philadelphia area. Notably, the report concluded that higher costs are not associated with the best patient outcomes.

One important note highlighted by the State agency’s analysis is the significant difference in average costs received by different hospitals for the identical procedure. Already some of the higher paid facilities are balking at the quoted rates.

Another significant variation was the amount paid by different insurers. There was even some variability in payments from Medicare to the different hospitals. This is noteworthy, as the federal program generally sets rates for given procedures.

This is the first time such payment and quality information has been published and available to the public. At it’s face, it appears that costs and quality are not correlated.

Implications in light of the increasing attention on healthcare through political coverage, may be far reaching. This could be starting point for an evaluation into cost differentiation.

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June 15, 2007 Related topics: Finance, Corporate Financials, Pricing

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