The effect of hospital discharge price increases on publicly reported measures of quality

OBJECTIVE: To determine if increases in hospital discharge prices are associated with improvements in clinical quality or patient experience. DATA SOURCES: This study used Medicare cost report data and publicly available Medicare.gov Care Compare quality measures for approximately 3000 short‐term care general hospitals between 2011 and 2018. STUDY DESIGN: We separately regressed quality measure scores on a lag of case mix adjusted discharge price, hospital fixed effects, and year indicators. Clinical quality measures included 30‐day readmission rates for acute myocardial infarction, chronic obstructive pulmonary disease, heart failure, hip and knee replacement, and pneumonia; risk‐adjusted 30‐day mortality rates for acute myocardial infarction, chronic obstructive pulmonary disease, heart failure, and stroke; and 90‐day complication rate for hip and knee replacement. Patient experience measures included the summary star rating and 10 domain measures reported through the Hospital Consumer Assessment of Healthcare Providers and Systems survey. We tested for heterogeneous effects by hospital ownership, number of beds, the commercial share of overall discharges, and market concentration. DATA COLLECTION/EXTRACTION METHODS: We linked hospitals identified in Medicare cost reports to Medicare.gov Care Compare quality measures. We excluded hospitals for which we could not identify a discharge price or that had an unrealistic price. PRINCIPAL FINDINGS: There was no positive association between lagged discharge price and any clinical quality measure. For patient experience measures, a 2% increase in discharge price was not associated with overall patient satisfaction but was associated with small, statistically significant increases ranging from 0.01% to 0.02% (relative to mean scores) for seven of ten domain measures. There was a positive association for five of ten patient experience measures in competitive markets and one measure in both moderately concentrated and heavily concentrated markets. CONCLUSIONS: We found no evidence that hospitals use higher prices to make investments in clinical quality; patient experience improved, but only negligibly.