Is Cheap Medicine - Good Medicine?

Cost is a fairly reliable, but certainly not an infallible indication of quality. If you take two comparable products, the cost of manufacturing one is high and the other is low, you expect “high cost” product to be also of higher quality. If someone buys a pair of shoes, you expect it to be better in many respects than a pair of shoes costing half as much. If a child is enrolled into a school where the tuition fees are higher, it is a reasonable expectation that the quality of teaching is a better than in an institution in the same area with lower tuition fees.

It used to be somewhat similar in medicine. A few decades ago, if you were admitted to an institution of high reputation (albeit of higher quality) and you were operated by a well established surgeon, you expected to receive higher quality medical care as well as a higher medical bill, compared to what you would have paid in a hospital of less prominence and operated on by a novice. This situation has, in healthcare anyhow, changed considerably. If you review hospital costs (i. e. monies spent by the institution to cover the expenses of care) and consequently charges (the bill submitted for the same services) it shows a random variation, rather than reflecting the “value” of services. Or is this variation really random?

Let us take coronary bypass surgery, one of the most common, and I may say one of the most expensive reasons for hospitalization. One may find that, for the same procedure, costs vary widely. Naturally, there may be many reasons for this difference: Clinical risk factors of the patient population, money-saving efforts of hospital administration and the medical staff, differences in labor costs in various localities, the volume of patients operated on, etc. Despite the fact that these may play an important part, by and large, the occurrence of these variables in major hospitals are surprisingly comparable. However, if you take hospital costs of cardiac surgical service in one hospital, and compare it with another institution with a similar patient population, you may find a most significant difference in the average cost, i. e. the total cost of the service divided by the number of patients operated. It is most significant that such a cost difference may exist in institutions of comparable size, patient characteristics, patient volume and similar location. How could this be explained? When you inquire why an institution has a higher than usual cost per patient, you usually get a standard answer: “We are dealing with sicker patients, older patients, more acute cases: in general, patients with significant pre-operative risk factors.” Such pre-operative risk factors indeed influence hospital costs, but there is no linear or even direct relationship between pre-operative variables and the average costs (the total) of hospitalization. Instead of that, there is a direct relationship between the occurrence of the number and the severity of post-operative complications and the average hospital costs. Because, at the same time, the patients with post-operative complications also prove themselves to have increased numbers of risk factors. There is a seeming controversy in the fact that without post-operative complications hospital care carries a uniformly low cost in most, if not all institutions, whereas patients with significant (especially multiple) post-operative complications have a uniformly high cost of hospitalization. Looking further into the matter, however, it also becomes evident that the share of patients with post-operative complications differs widely among various institutions, in spite of the fact that the clinical characteristics (pre-operative variables) seem to be comparable.

The cat is out of the bag! Taking into consideration that: hospital costs of coronary bypass surgery largely depend an presence of post-operative complications, and that most patients with post-operative complications also have significant pre-operative risk factors, such as advanced age, poor or less left ventricular and renal function, peripheral vascular disease, etc., the difference in hospital costs of the average patient can be explained only if one hospital (surgeon, surgical group) can achieve a smooth post-operative course in the higher number of high-risk patients than the other can. Evidently, institutions providing average or even somewhat lower than average but still “acceptable” clinical care can achieve low costs in the “good risk” patients but only institutions (surgeons, surgical groups) of excellence can achieve a low post-operative complication rate in high risk patients thus low hospitalization costs!

Based on the above considerations, we stipulate that presence of pre-operative risk factors is certainly not without significance in hospital costs calculations; their importance, however, is overvalued and is often used as an excuse to justify not only high hospital costs but also poor surgical results. High quality surgical management is one of the most, if not the most important factor in determining costs of coronary bypass surgery. It appears, therefore, logical that cost saving efforts using patient stratification trying to exclude patients at higher than usual but still acceptable risk, should be directed toward improvement of level surgical care.