Higher Physician Spending Does Not Equal Better Patient Outcomes

March 16th 2017
Lauren Santye, Assistant Editor
Lauren Santye, Assistant Editor

Policies targeting both physicians and hospitals could reduce wasteful health care spending.

Higher physician spending is not associated with better outcomes for hospitalized patients, a new study found.

In a retrospective data analysis published inJAMA Internal Medicine, investigators sought to examine variation in spending across physicians and its association with patient outcomes.

For thestudy, investigators analyzed a 20% random sample of Medicare fee-for-service beneficiaries 65 years and older who were hospitalized with a nonelective medical condition and treated by a general internist between January 1, 2011, and December 31, 2014.

The investigators quantified the proportion of variation in Medicare Part B spending attributable to hospitals, physicians, and patients. Next, they examined the association between physician spending and patient outcomes, adjusting for patient and physician characteristics and hospital fixed effects.

The primary focus of the analysis was on hospitalist physicians, whose patients are plausibly quasirandomzied within a hospital-based physician work schedule. The secondary analysis focused on general internists overall.

To ensure that patient illness severity did not directly impact physician spending estimates, the investigators calculated physicians’ spending levels in 2011 through 2012 and examined the outcomes of their patients in 2013 and 2014.

The results of the study showed that there was more variation in health care spending across individual physicians within a single hospital than across hospitals, even after accounting for differences between hospitals and patient populations.

Overall, 8.4% of the total variation in spending was attributed to differences between individual physicians, compared with 7% explained by differences between hospitals.

After examining the link between physician spending and patient outcomes, the investigators found no difference in 30-day patient mortality, or readmissions for hospitalists within the same hospital. Similar patterns were observed among general internists.

“Before now, most of the research and efforts aimed at cutting spending and improving the value of care have been aimed at hospitals, health systems, and groups of doctors,” said lead author Yusuke Tsugawa. “The differences between hospitals and regions are more important, but they’re only part of the puzzle. Our findings show how important it is to consider the differences between individual doctors in any effort to improve health care.”

Jena, a physician at Massachusetts General Hospital, warned that it’s too soon to determine whether the results mean that higher-spending physicians could spend less with no ill effects for patients.

“Say you have 2 painters,” Jena said. “One usually takes 2 hours to paint a room, and 1 takes 6 hours. You can ask the slow painter to hurry up, but you might end up with a room that’s sloppily painted, or with 1 of the walls the wrong color. That’s obviously a situation we want to avoid in health care.”

Jena noted that the findings underscore the impact of decisions made by individual physicians on health care spending.

“Health care spending varies more across individual physicians than across hospitals,” the authors wrote. “However, higher physician spending is not associated with better outcomes of hospitalized patients. Our findings suggest policies targeting both physicians and hospitals may be more effective in reducing wasteful spending than policies focusing solely on hospitals.”

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