The American Journal of Surgery (2015) 209, 457-462
Midwest Surgical Association
Doing well by doing good: linking access with quality Victor Chang, B.A., Paul C. Kuo, M.D., M.B.A., F.A.C.S., Philip Y. Wai, M.D., F.A.C.S.* Department of Surgery, Loyola University Medical Center, Stritch School of Medicine, 2160 South First Avenue, Maywood, IL 60153, USA KEYWORDS: Altruism; Quality; Access; Surgery; Outcomes
Abstract BACKGROUND: We hypothesize that medical centers that prioritize altruism can also deliver superior quality care. METHODS: Data were obtained from California’s Office of Statewide Health Planning and Development, Medicare Hospital Compare, and the Joint Commission US Census Bureau’s American Community Survey. Outcomes were measured using summary statistics, regression analysis, and quality indices. Total discounted revenue/total revenue (TDR/TR) served as a proxy for altruistic care. RESULTS: In nonprofit hospitals, TDR/TR positively correlated with 5 quality indices including pneumonia (P , .001), heart failure (P 5 .05), and overall surgical process of care (P 5 .009). Hospital size predicted higher quality surgical process (P 5 .06, 201 to 300 beds; P 5 .01, .301 beds), hospital teaching status demonstrated positive correlation (b 5 .048, P 5 .69), and poverty was negatively correlated (b 5 2.00072, P 5 .89). Positive TDR/TR did not adversely affect mortality or readmission rates (P 5 .52). CONCLUSIONS: TDR/TR predicts quality in nonprofit hospitals without increasing mortality and readmission. Altruistic motivation may be associated with the delivery of higher quality surgical care. Ó 2015 Elsevier Inc. All rights reserved.
The decision to pursue a career in medicine is often portrayed as a calling with the goal of providing compassionate care, often in service, to those patients who are destitute, disadvantaged, and deprived of access. The consideration to forego more lucrative and self-serving professions for a career that allows physicians to ‘‘do well by doing good’’1 represents a deliberate if not romanticized decision to provide equity toward social justice. However,
The authors declare no conflicts of interest. * Corresponding author. Tel.: 11-708-327-2539; fax: 11-708-2166003. E-mail address: [email protected] Manuscript received July 20, 2014; revised manuscript October 15, 2014 0002-9610/$ - see front matter Ó 2015 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.amjsurg.2014.10.016
the definitions of doing ‘‘well’’ and ‘‘good’’ are imprecise at best and represent moving targets in this current economically challenged climate where fiscal accountability has assumed a strong priority in the healthcare industry. Although ‘‘doing good’’ as best practice has been described as a ‘‘social obligation,’’ this remains a difficult parameter to measure and evaluate in comparison with other available healthcare products.2 Indeed, the complex processes that are involved in disease diagnosis, medical decision making, and the risks and benefits of therapeutic interventions render the theory and practice of medicine unassailable by the average patient or consumer. In this context, best practice and benchmarking of medical care have acquired increased scrutiny as patients seek the highest quality in a competitive market. Current mechanisms for measuring
458 quality applicable to the healthcare industry include the personal experience of patients, branding by firms, voluntary disclosure, government regulation, certification and licensing, third party certification agency, ratings, warrantees, and ultimately litigation.3 Although economic theory presumes that material selfinterest is the principle motivation guiding decision making in the market, the concept of altruistic physician motivation or ‘‘doing good’’ as it pertains to sound economic strategy has not been explored. There is an expectation that physicians provide the best clinical care to patients and not just the most economical care.2 Indeed, a ‘‘substantial part of the physician’s satisfaction with practice is fulfilled by serving successfully as a patient’s advocate’’.4 This theory of social equity is supported in real-world instances where physician firms that are owner operated (private practice) permit the possibility of altruistic care on a case-by-case basis,5 and also in the higher proportion of hospital managers with altruistic motives at nonprofit hospitals.6 Altruistic care is a leading mission in academic centers but is often perceived as a fiscally untenable endeavor associated with indigent and lower quality patient care. We hypothesize that centers that prioritize altruism may deliver superior quality care. The difficulty in measuring altruism has kept experimental economists from exploring this relationship. In an effort to establish an operational proxy, our study makes the assumption that the relative amount of care a nonprofit hospital provides at reduced rates and rates below-cost reflects the altruistic tendency of the organization.
Patients and Methods The nonprofit hospitals of Los Angeles County were chosen as the focal point of this study. For-profit hospitals served as a comparison and were assumed to be profitmaximizing firms. Location, ownership type, size, teaching status, revenue, and revenue deductions data from the fiscal year of 2011 (October 1, 2010 to September 30, 2011) were obtained from the State of California’s Office of Statewide Health Planning and Development. Quality data from the period July 1, 2011 to June 30, 2012 were obtained from Medicare Hospital Compare (MHC). Poverty data were obtained from the US Census Bureau’s 2007 to 2011 American Community Survey 5-Year Estimate. All hospitals in Los Angeles County that reported their financial (Office of Statewide Health Planning and Development) and quality data (MHC) were included in the study. The resulting dataset excluded VA, psychiatric, and Kaiser hospitals. We utilized a financial proxy as a surrogate for a hospital’s inclination to provide care at reduced rates and rates belowcost. This proxy, measured as the hospital’s total discounted revenue divided by the hospital’s total revenue (TDR/TR), represents our mathematical approximation for altruistic care. TDR is the sum of each hospital’s claim of bad debt, charity care, credit balance from restricted donations and subsidies for
The American Journal of Surgery, Vol 209, No 3, March 2015 indigent care, teaching allowances, support for clinical teaching, policy discounts, and Medicare, Medicaid, indigent program contractual adjustments. TR is the sum of total operational revenue and total nonoperational revenue. TDR represents a complete indicator of the altruistic care as it removes the variability in bad debt and charity care allocations and takes into account the treatment of patients with less rewarding insurances. TR is a better representative denominator than total operational revenue because TR accounts for donations and income from endowments and investments, which reflects an organization’s overall financial strength. We organized the quality measure data into 3 broad domains: process (ie, inputs), outcomes, and patient experiences. Of the 31 relevant measures, there were 17 processes, 6 outcomes, and 8 patient experience measures. In order to develop more functional and broader quality measures, we combined measures to produce standardized indices that equally weighed the included measures, the measures were combined to produce standardized indices that equally weighed included measures. Table 1 shows the 31 measures and 7 indices used for our study and how they were organized. We used a multivariable linear regression model in our study. Various quality measures and indices were regressed on TDR/TR. Covariates were included as controls for different hospital-level characteristics. Hospitals were identified as teaching or nonteaching by the presence of a residency program and grouped by size accordingly (150 or fewer beds, 151 to 200 beds, 201 to 300 beds, and .300 beds). The poverty rate (% of individuals below poverty line) of each hospital’s local city was included as a regressor. The regressions were run conditional on ownership type to differentiate the financial proxy’s effect on quality for nonprofit hospitals and for-profit hospitals. TDR 1b2 Teaching1b3 Poverty1b4 Size200 TR 1b5 Size300 1b6 Size.300 1b7
Qualityi 2b1
Results There were 51 nonprofit and 29 for-profit Medicarecertified acute care hospitals included in the study. We examined the effect of TDR/TR on 6 process quality measures in the hospital systems in this study. For nonprofit hospitals, TDR/TR positively correlated with 5 of the 6 process quality measures including pneumonia (P , .001), heart failure (P 5 .06), and overall process of care (P 5 .009). In this group, smaller hospital size is a predictor of lower quality process in each of the following areas: immunization (P 5 .01, 150 to 200 beds; P 5 .01, 201 to 300 beds), heart failure (P , .001, 150 to 200 beds; P 5 .03, 201 to 300 beds), heart attack (P % .001, 150 to 200 beds; P 5.03, 201 to 300 beds), and overall process (P ,.001, 151 to 200 beds). In contrast, larger hospital size is a predictor of higher quality surgical process (P 5 .06, 201 to 300 beds; P 5 .01, .301
V. Chang et al. Table 1
Linking access with quality of care
459
The organization of quality measures
Domains
Subcategories and measures
Process (inputs) Source: The Joint Commission
Immunization process Immunization rate for influenza Immunization rate for pneumonia Pneumonia process Percent of pneumonia patients whose initial ER blood culture was performed before administration of first dose of antibiotics Percent of pneumonia patients given the most appropriate initial antibiotic(s) Heart failure process Percent of heart failure patients given an evaluation of left ventricular systolic function Percent of heart failure patients given ACE inhibitor or ARB for left ventricular systolic dysfunction Percent of heart failure patients given discharge instructions Heart attack process Percent of heart attack patients given aspirin at discharge Percent of heart attack patients given a prescription for a statin at discharge Surgery process Percent of surgery patients who were given an antibiotic at the right time (within 1 hour before surgery) to help prevent infection Percent of surgery patients whose preventive antibiotics were stopped at the right time (within 24 hours after surgery) Percent of surgery patients who were given the right kind of antibiotic to help prevent infection Percent of surgery patients who got treatment at the right time (within 24 hours before or after their surgery) to help prevent blood clots Percent of surgery patients whose doctors ordered treatments to prevent blood clots after certain types of surgeries Percent of surgery patients whose urinary catheters were removed on the first or second day after surgery Percent of surgery patients who were taking heart drugs called beta blockers before coming to the hospital who were kept on them Patients having surgery who were actively warmed in the operating room or whose body temperature was near normal Heart attack mortality rate in 30 days Heart failure mortality rate in 30 days Pneumonia mortality rate in 30 days Heart attack readmission rate in 30 days Heart failure readmission rate in 30 days Pneumonia readmission rate in 30 days Communication with nurses Communication with doctors Responsiveness of hospital staff pain management Communication about medicines Cleanliness and quietness of hospital environment Discharge information Overall patient rating
Outcomes Source: Medicare enrollment and claims data
Patient experiences Source: Hospital Consumer Assessment of Healthcare Providers and Systems
ACE 5 angiotensin converting enzyme; ARB 5 angiotensin receptor blocker; ER 5 emergency room.
beds), while the teaching status of a hospital demonstrates a positive correlation (b 5 .048, P 5 .69) and poverty demonstrates a negative correlation (b 5 2.00072, P 5 .89) for the quality of surgical process. In the context of for-profit hospitals, the relationship between TDR/TR and overall process of care was negative and insignificant when regression was applied (b 5 2.2016158, P 5 .19). We also examined the effect of TDR/TR on overall outcomes as measured by 30-day mortality and readmission
rates. The 30-day readmission and mortality measures are risk adjusted by Medicare algorithms for the patient’s age, past medical history, and other diseases or conditions the patient had when they were admitted.7 In our nonprofit hospitals, positive TDR/TR did not adversely affect the overall (30-day) mortality or readmission rates (b 5 .07, P 5 .53), while positive teaching status is associated with better mortality and readmission rates (P 5 .09). When analyzing outcome measures (Table 2), TDR/TR does not correlate
460
The American Journal of Surgery, Vol 209, No 3, March 2015
Table 2
Results Nonprofit
For-profit
Domains
Measures
b1
P value
b1
P value
Process
Immunization process index Pneumonia process index Heart failure process index Heart attack process index Surgery process index Overall process index Heart attack mortality rate in 30 days Heart failure mortality rate in 30 days Pneumonia mortality rate in 30 days Heart attack readmission rate in 30 days Heart failure readmission rate in 30 days Pneumonia readmission rate in 30 days Overall outcome index Communication with nurses Communication with doctors Responsiveness of hospital staff Pain management Communication about medicines Cleanliness and quietness of hospital environment Discharge information Overall patient rating
.48* 2.0089 .16 .12 .055 .17* .25 .17 2.36 2.25 .41 2.023 .047 .17 .27 .30 .45 .45 .13 2.17 .022
,.001 .94 .06 .28 .29 .009 .25 .41 .12 .26 .07 .89 .53 .39 .15 .14 .26 .22 .55 .38 .98
.11 .039 .24 2.075 2.26 2.20 2.38 2.29 2.23 2.29 .30 .36 .013 NED† 2.14 2.18 2.48 .21 2.055 2.051 2.13
.65 .81 .24 .78 .33 .23 .22 .13 .29 .60 .19 .085 .92 NED .10 .45 .041 .23 .57 .63 .41
Outcome
Patient experience
White cells indicate correlations directionally associated with higher quality. *Significant at a 5% level. † Not enough data.
with statistically worse outcomes in pneumonia mortality rate (P 5 .12), heart attack readmission rate (P 5 .26), pneumonia readmission rate (P 5 .89), heart attack mortality rate (P 5 .25), heart failure mortality rate (P 5 .41), and heart failure readmission rate (P 5 .07). Teaching status and larger hospital size are a predictor for lower heart attack mortality rate (P 5 .03, teaching; P 5 .04, 201 to 300 beds; P 5 .06, .301 beds), and smaller hospital size is a predictor for higher pneumonia mortality rate (P 5 .03, 151 to 200 beds). In the context of for-profit hospitals, the relationship between TDR/TR and the overall mortality and readmission rate is positive and statistically insignificant (b 5 .013, P 5 .092), similar to nonprofit hospitals. TDR/TR positively correlated with 7 of the 8 patient experience measures, including communication with doctors (P 5 .15) and responsiveness of hospital staff (P 5 .14). TDR/TR negatively correlated with 6 patient experience measures, including communication with doctors (P 5 .10), when looking at for-profit hospitals (Table 2).
Comments This analysis represents the largest study examining the role of altruism in the quality of care in the US healthcare system. We demonstrated that nonprofit hospitals with higher level of TDR/TR, our surrogate for altruism, are associated with better overall process of care. In this analysis, we used process measures as direct indicators of quality. A high score
on process measures requires hospitals to comply with best practice protocol with accurate documentation and reduces subjectivity or possibility for gaming. Our analysis of TDR/ TR strongly supports our hypothesis that altruistic hospitals provide superior quality care as measured by these process measures. In this analysis, we also demonstrate that a higher level of TDR/TR does not adversely affect mortality or readmission rates. In the context of subjective patient experience, hospitals with higher TDR/TR almost exclusively correlated with better patient reviews (Table 2). Although the TDR/TR coefficients were not statistically significant, the measures of communication with doctors and responsiveness of hospital staff demonstrated a positive association suggesting that a higher TDR/TR was more predictive of improved patient interactions with physicians and hospital staff resulting in positive patient scores. Our analysis has some limitations. First, TDR/TR represents an approximation for altruism and reduced TDR can be explained by alternative means. The hospital’s capability for delivering care at reduced rates may also be because of financial necessity rather than a deliberate decision motivated by concern for patient welfare. Many economists have argued that ‘‘the medical profession constitutes a monopoly, and . price discrimination by doctors, ie, scaling fees to the income of patients, has been explained as the behavior of a discriminating monopolist,’’ resulting in ‘‘monopoly gains that accrue to the members of this profession.’’8 Nonprofit hospitals may also make
V. Chang et al.
Linking access with quality of care
financial decisions to stay competitive and reduced rates may be driven by the same profit-maximizing motivations that drive for-profit hospitals. However, in our analysis, TDR/TR demonstrates a differential effect on quality when applied to nonprofit versus for-profit hospitals. TDR/TR had no conclusive effect on quality for-profit hospitals, whereas TDR/TR was statistically significant and positive for process quality measures for nonprofit hospitals (Table 2). If we assume for-profit hospitals to be profitmaximizing firms, the contrary behavior of nonprofit hospitals must be explained by an alternative motive. We assume that one of those motives to be altruistic care. Second, the health of indigent patients is affected by access to a variety of commodities. Nutritional status, access to shelter and appropriate living conditions, clothing and sanitation, education, and insight with regard to health problems will impact the outcomes evaluated by our process measures independent to the quality of care provided.9 We assume that at a hospital that primarily provides indigent care, a larger proportion of patients may be indigent, and have different access to health commodities including but not limited to access to quality care. In this context, different patient outcomes will be impacted by factors other than the quality of care provided by the hospital. Third, subjective measures and gaming with the report card system can affect outcome scores.10 Outcome measures that are redesigned to limit gaming and adjust fairly for risk are needed to provide a more objective assessment. Finally, our data are derived from a single geographical state and the applicability of TDR/TR to other regions has not been validated.
Conclusions This represents the first study in the literature examining altruism and quality of care. We defined altruism as the inclusion of patient welfare in a hospital/physician’s utility function. Using quality data from MHC and a financial proxy, TDR/TR, we found that TDR/TR predicts quality and process measures in nonprofit hospitals without affecting mortality and readmission. Analyzing the same regressions for for-profit hospitals, we found TDR/TR to have no predictive value for any of the quality measures. Assuming for-profit hospitals as profit maximizers, the marked difference between the predictive power of TDR/TR on quality for nonprofit and for-profit hospitals suggests that TDR/TR is a valid proxy for altruism in nonprofit hospitals. Our analysis suggests that altruistic motivation and the quality of care provided by hospitals that prioritize this mission may be associated with the delivery of higher quality care.
References 1. Dranove D. Code Red: An Economist Explains How to Revive the Healthcare System without Destroying It. Princeton, NJ: Princeton University Press; 2009.
461 2. Arrow KJ. Uncertainty and the welfare economics of medical care. Am Econ Rev 1963;53:941–73. 3. Dranove D. Health care markets, regulators, and certifiers, 2. Amsterdam, North-Holland: Handbook Health Econ; 2012. p. 639–90. 4. Eisenberg JM. Doctors’ Decisions and the Cost of Medical Care. Ann Arbor, MI: Health Administration Press; 1986. 5. McGuire TG. Physician agency, 1. Amsterdam, North-Holland: Handbook Health Econ; 2000. p. 461–536. 6. Roomkin MJ, Weisbrod BA. Managerial compensation and incentives in for-profit and nonprofit hospitals. J L Econ Organ 1999;15:750–81. 7. http://medicare.gov/hospitalcompare/Data/30-day-measures.html (accessed on 10/15/2014). 8. Kessel RA. Price discrimination in medicine. J L Econ 1958;1:20–53. 9. Haan M, Kaplan GA, Camacho T. Poverty and health. Prospective evidence from the Alameda County Study. Am J Epidemiol 1987;125: 989–98. 10. Dranove D, Kessler D, McClellan M, et al. Is more information better? The effects of report cards on health care providers. J Polit Econ 2013; 111:555.
Discussion Dr Stephen F. Sener (Pasadena, CA). Could the authors tell us whether the term TDR/TR is a standard and defined term in accounting or economics? If so, has the term been previously validated in other data sets? And, if not, how do you propose to validate its use in future analyses? I would appreciate it if you could amplify in the logic, which relates TDR/TR to altruism. In the discussion you admit that the hospitals could be forced to accept a higher amount of discounted care simply to keep their doors open in tough economic times. But for me the premise that the amount of discounted care equates with altruism is a non-sequitur. So is there any historical precedence for this equation? I would have appreciated seeing the actual discounted amounts for each hospital. Furthermore, even though you told us in your presentation how you derived beta, could you be more explicit about that? I am sort of hard pressed to understand how beta could be less than zero as you showed in your one of your tables. Were there any hospitals in LA County that were excluded from the analysis? And, if so, what were your exclusion criteria? Dr Chang: This is actually a brand new term that we developed, TDR over TR. There has not been any other standards or–it’s not a standard defined term in either accounting or economics. But our logic behind it was that care produced at reduced rates or below costs could come from two motivations. In the economic theory, monopolies tend to price discriminate based on income. And this is done with profit maximizing intention. But the other motivation it comes from is the motivation of altruism. We want to provide care to anyone we can provide care to. So the data that we see demonstrates that motivation in nonprofit hospitals for doing so, comes from an altruistic backing because if you think about patients who are in lower socioeconomic situations and they have to seek care, they don’t have many options. Yet those patients have shown to receive superior care in those facilities, especially in nonprofit facilities that provide a lot of care at reduced rates or below cost.
462 So that was our logic behind TDR over TR. A way to validate this ratio would be to run them on larger samples or larger data sets, maybe expand the data set to the entire country. The way we determined the term ‘‘beta’’ was through the ordinary V squares method. So it was a very standard statistical method that we use to regress our variables. Negative beta value indicates that there is a negative correlation between TDR and altruism. It is just an indication of the directional correlation. And, finally, the hospitals that were excluded from this study were hospitals that either did not have enough financial data or quality data, and most of these hospitals were psychiatric hospitals, for obvious reasons. Dr Donald Fry (Chicago, IL). I might just challenge, if I may, the concept that this is some great sense of altruism, but, rather, is the intrinsic sense of physicians to want to do their best as part of the motivation of solving a puzzle and not necessarily receiving great rewards for it. Dr Chang: That is definitely a possibility. Again, I guess we could better define our term as intrinsic motivation rather than just altruism. But, again, it is very hard to quantify intangible qualities that we’re discussing here. And this was just an attempt to do so. Dr Sukamal Saha (Flint, MI). Are you talking about, when you say ‘‘altruism,’’ is it mostly loaded up on the
The American Journal of Surgery, Vol 209, No 3, March 2015 physician side who is delivering care or the administration who is running the hospital? So that’s one question, if you can separate it out. Secondly, how come the nonprofit institution CEO consistently gets a bigger bonus than non for-profit hospitals? Dr Chang: It has been proven in the literature that nonprofit managers are more altruistic than for-profit managers. If we look at from that perspective, physicians working under managers who are more altruistic, may be under an environment where they can provide more altruistic care. Dr Anthony J. Senagore (Saginaw, MI). I am interested in why you chose LA County; if you had compared LA County to the San Francisco region, you might have come up with a very different conclusion, because in the valley, LA County, there are 212 hospitals. There is a large system, county system that takes out a lot of the uninsured off the bottom. And some large systems, like Kaiser that take off the cream. So all those 212 hospitals are sharing, by-and-large, underinsured or government insured patients at really a subsistence level because the largest commercial payer, pays sub-Medicare rates. So one of your calculations is inherently false in that the contractual discounts are an aberration of that economic system in LA County, not really a measure of their altruism in that region. They truly are on subsistence mode. Dr Chang: Further studies will further validate or invalidate our term.
Midwest Surgical Association
Doing well by doing good: linking access with quality Victor Chang, B.A., Paul C. Kuo, M.D., M.B.A., F.A.C.S., Philip Y. Wai, M.D., F.A.C.S.* Department of Surgery, Loyola University Medical Center, Stritch School of Medicine, 2160 South First Avenue, Maywood, IL 60153, USA KEYWORDS: Altruism; Quality; Access; Surgery; Outcomes
Abstract BACKGROUND: We hypothesize that medical centers that prioritize altruism can also deliver superior quality care. METHODS: Data were obtained from California’s Office of Statewide Health Planning and Development, Medicare Hospital Compare, and the Joint Commission US Census Bureau’s American Community Survey. Outcomes were measured using summary statistics, regression analysis, and quality indices. Total discounted revenue/total revenue (TDR/TR) served as a proxy for altruistic care. RESULTS: In nonprofit hospitals, TDR/TR positively correlated with 5 quality indices including pneumonia (P , .001), heart failure (P 5 .05), and overall surgical process of care (P 5 .009). Hospital size predicted higher quality surgical process (P 5 .06, 201 to 300 beds; P 5 .01, .301 beds), hospital teaching status demonstrated positive correlation (b 5 .048, P 5 .69), and poverty was negatively correlated (b 5 2.00072, P 5 .89). Positive TDR/TR did not adversely affect mortality or readmission rates (P 5 .52). CONCLUSIONS: TDR/TR predicts quality in nonprofit hospitals without increasing mortality and readmission. Altruistic motivation may be associated with the delivery of higher quality surgical care. Ó 2015 Elsevier Inc. All rights reserved.
The decision to pursue a career in medicine is often portrayed as a calling with the goal of providing compassionate care, often in service, to those patients who are destitute, disadvantaged, and deprived of access. The consideration to forego more lucrative and self-serving professions for a career that allows physicians to ‘‘do well by doing good’’1 represents a deliberate if not romanticized decision to provide equity toward social justice. However,
The authors declare no conflicts of interest. * Corresponding author. Tel.: 11-708-327-2539; fax: 11-708-2166003. E-mail address: [email protected] Manuscript received July 20, 2014; revised manuscript October 15, 2014 0002-9610/$ - see front matter Ó 2015 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.amjsurg.2014.10.016
the definitions of doing ‘‘well’’ and ‘‘good’’ are imprecise at best and represent moving targets in this current economically challenged climate where fiscal accountability has assumed a strong priority in the healthcare industry. Although ‘‘doing good’’ as best practice has been described as a ‘‘social obligation,’’ this remains a difficult parameter to measure and evaluate in comparison with other available healthcare products.2 Indeed, the complex processes that are involved in disease diagnosis, medical decision making, and the risks and benefits of therapeutic interventions render the theory and practice of medicine unassailable by the average patient or consumer. In this context, best practice and benchmarking of medical care have acquired increased scrutiny as patients seek the highest quality in a competitive market. Current mechanisms for measuring
458 quality applicable to the healthcare industry include the personal experience of patients, branding by firms, voluntary disclosure, government regulation, certification and licensing, third party certification agency, ratings, warrantees, and ultimately litigation.3 Although economic theory presumes that material selfinterest is the principle motivation guiding decision making in the market, the concept of altruistic physician motivation or ‘‘doing good’’ as it pertains to sound economic strategy has not been explored. There is an expectation that physicians provide the best clinical care to patients and not just the most economical care.2 Indeed, a ‘‘substantial part of the physician’s satisfaction with practice is fulfilled by serving successfully as a patient’s advocate’’.4 This theory of social equity is supported in real-world instances where physician firms that are owner operated (private practice) permit the possibility of altruistic care on a case-by-case basis,5 and also in the higher proportion of hospital managers with altruistic motives at nonprofit hospitals.6 Altruistic care is a leading mission in academic centers but is often perceived as a fiscally untenable endeavor associated with indigent and lower quality patient care. We hypothesize that centers that prioritize altruism may deliver superior quality care. The difficulty in measuring altruism has kept experimental economists from exploring this relationship. In an effort to establish an operational proxy, our study makes the assumption that the relative amount of care a nonprofit hospital provides at reduced rates and rates below-cost reflects the altruistic tendency of the organization.
Patients and Methods The nonprofit hospitals of Los Angeles County were chosen as the focal point of this study. For-profit hospitals served as a comparison and were assumed to be profitmaximizing firms. Location, ownership type, size, teaching status, revenue, and revenue deductions data from the fiscal year of 2011 (October 1, 2010 to September 30, 2011) were obtained from the State of California’s Office of Statewide Health Planning and Development. Quality data from the period July 1, 2011 to June 30, 2012 were obtained from Medicare Hospital Compare (MHC). Poverty data were obtained from the US Census Bureau’s 2007 to 2011 American Community Survey 5-Year Estimate. All hospitals in Los Angeles County that reported their financial (Office of Statewide Health Planning and Development) and quality data (MHC) were included in the study. The resulting dataset excluded VA, psychiatric, and Kaiser hospitals. We utilized a financial proxy as a surrogate for a hospital’s inclination to provide care at reduced rates and rates belowcost. This proxy, measured as the hospital’s total discounted revenue divided by the hospital’s total revenue (TDR/TR), represents our mathematical approximation for altruistic care. TDR is the sum of each hospital’s claim of bad debt, charity care, credit balance from restricted donations and subsidies for
The American Journal of Surgery, Vol 209, No 3, March 2015 indigent care, teaching allowances, support for clinical teaching, policy discounts, and Medicare, Medicaid, indigent program contractual adjustments. TR is the sum of total operational revenue and total nonoperational revenue. TDR represents a complete indicator of the altruistic care as it removes the variability in bad debt and charity care allocations and takes into account the treatment of patients with less rewarding insurances. TR is a better representative denominator than total operational revenue because TR accounts for donations and income from endowments and investments, which reflects an organization’s overall financial strength. We organized the quality measure data into 3 broad domains: process (ie, inputs), outcomes, and patient experiences. Of the 31 relevant measures, there were 17 processes, 6 outcomes, and 8 patient experience measures. In order to develop more functional and broader quality measures, we combined measures to produce standardized indices that equally weighed the included measures, the measures were combined to produce standardized indices that equally weighed included measures. Table 1 shows the 31 measures and 7 indices used for our study and how they were organized. We used a multivariable linear regression model in our study. Various quality measures and indices were regressed on TDR/TR. Covariates were included as controls for different hospital-level characteristics. Hospitals were identified as teaching or nonteaching by the presence of a residency program and grouped by size accordingly (150 or fewer beds, 151 to 200 beds, 201 to 300 beds, and .300 beds). The poverty rate (% of individuals below poverty line) of each hospital’s local city was included as a regressor. The regressions were run conditional on ownership type to differentiate the financial proxy’s effect on quality for nonprofit hospitals and for-profit hospitals. TDR 1b2 Teaching1b3 Poverty1b4 Size200 TR 1b5 Size300 1b6 Size.300 1b7
Qualityi 2b1
Results There were 51 nonprofit and 29 for-profit Medicarecertified acute care hospitals included in the study. We examined the effect of TDR/TR on 6 process quality measures in the hospital systems in this study. For nonprofit hospitals, TDR/TR positively correlated with 5 of the 6 process quality measures including pneumonia (P , .001), heart failure (P 5 .06), and overall process of care (P 5 .009). In this group, smaller hospital size is a predictor of lower quality process in each of the following areas: immunization (P 5 .01, 150 to 200 beds; P 5 .01, 201 to 300 beds), heart failure (P , .001, 150 to 200 beds; P 5 .03, 201 to 300 beds), heart attack (P % .001, 150 to 200 beds; P 5.03, 201 to 300 beds), and overall process (P ,.001, 151 to 200 beds). In contrast, larger hospital size is a predictor of higher quality surgical process (P 5 .06, 201 to 300 beds; P 5 .01, .301
V. Chang et al. Table 1
Linking access with quality of care
459
The organization of quality measures
Domains
Subcategories and measures
Process (inputs) Source: The Joint Commission
Immunization process Immunization rate for influenza Immunization rate for pneumonia Pneumonia process Percent of pneumonia patients whose initial ER blood culture was performed before administration of first dose of antibiotics Percent of pneumonia patients given the most appropriate initial antibiotic(s) Heart failure process Percent of heart failure patients given an evaluation of left ventricular systolic function Percent of heart failure patients given ACE inhibitor or ARB for left ventricular systolic dysfunction Percent of heart failure patients given discharge instructions Heart attack process Percent of heart attack patients given aspirin at discharge Percent of heart attack patients given a prescription for a statin at discharge Surgery process Percent of surgery patients who were given an antibiotic at the right time (within 1 hour before surgery) to help prevent infection Percent of surgery patients whose preventive antibiotics were stopped at the right time (within 24 hours after surgery) Percent of surgery patients who were given the right kind of antibiotic to help prevent infection Percent of surgery patients who got treatment at the right time (within 24 hours before or after their surgery) to help prevent blood clots Percent of surgery patients whose doctors ordered treatments to prevent blood clots after certain types of surgeries Percent of surgery patients whose urinary catheters were removed on the first or second day after surgery Percent of surgery patients who were taking heart drugs called beta blockers before coming to the hospital who were kept on them Patients having surgery who were actively warmed in the operating room or whose body temperature was near normal Heart attack mortality rate in 30 days Heart failure mortality rate in 30 days Pneumonia mortality rate in 30 days Heart attack readmission rate in 30 days Heart failure readmission rate in 30 days Pneumonia readmission rate in 30 days Communication with nurses Communication with doctors Responsiveness of hospital staff pain management Communication about medicines Cleanliness and quietness of hospital environment Discharge information Overall patient rating
Outcomes Source: Medicare enrollment and claims data
Patient experiences Source: Hospital Consumer Assessment of Healthcare Providers and Systems
ACE 5 angiotensin converting enzyme; ARB 5 angiotensin receptor blocker; ER 5 emergency room.
beds), while the teaching status of a hospital demonstrates a positive correlation (b 5 .048, P 5 .69) and poverty demonstrates a negative correlation (b 5 2.00072, P 5 .89) for the quality of surgical process. In the context of for-profit hospitals, the relationship between TDR/TR and overall process of care was negative and insignificant when regression was applied (b 5 2.2016158, P 5 .19). We also examined the effect of TDR/TR on overall outcomes as measured by 30-day mortality and readmission
rates. The 30-day readmission and mortality measures are risk adjusted by Medicare algorithms for the patient’s age, past medical history, and other diseases or conditions the patient had when they were admitted.7 In our nonprofit hospitals, positive TDR/TR did not adversely affect the overall (30-day) mortality or readmission rates (b 5 .07, P 5 .53), while positive teaching status is associated with better mortality and readmission rates (P 5 .09). When analyzing outcome measures (Table 2), TDR/TR does not correlate
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The American Journal of Surgery, Vol 209, No 3, March 2015
Table 2
Results Nonprofit
For-profit
Domains
Measures
b1
P value
b1
P value
Process
Immunization process index Pneumonia process index Heart failure process index Heart attack process index Surgery process index Overall process index Heart attack mortality rate in 30 days Heart failure mortality rate in 30 days Pneumonia mortality rate in 30 days Heart attack readmission rate in 30 days Heart failure readmission rate in 30 days Pneumonia readmission rate in 30 days Overall outcome index Communication with nurses Communication with doctors Responsiveness of hospital staff Pain management Communication about medicines Cleanliness and quietness of hospital environment Discharge information Overall patient rating
.48* 2.0089 .16 .12 .055 .17* .25 .17 2.36 2.25 .41 2.023 .047 .17 .27 .30 .45 .45 .13 2.17 .022
,.001 .94 .06 .28 .29 .009 .25 .41 .12 .26 .07 .89 .53 .39 .15 .14 .26 .22 .55 .38 .98
.11 .039 .24 2.075 2.26 2.20 2.38 2.29 2.23 2.29 .30 .36 .013 NED† 2.14 2.18 2.48 .21 2.055 2.051 2.13
.65 .81 .24 .78 .33 .23 .22 .13 .29 .60 .19 .085 .92 NED .10 .45 .041 .23 .57 .63 .41
Outcome
Patient experience
White cells indicate correlations directionally associated with higher quality. *Significant at a 5% level. † Not enough data.
with statistically worse outcomes in pneumonia mortality rate (P 5 .12), heart attack readmission rate (P 5 .26), pneumonia readmission rate (P 5 .89), heart attack mortality rate (P 5 .25), heart failure mortality rate (P 5 .41), and heart failure readmission rate (P 5 .07). Teaching status and larger hospital size are a predictor for lower heart attack mortality rate (P 5 .03, teaching; P 5 .04, 201 to 300 beds; P 5 .06, .301 beds), and smaller hospital size is a predictor for higher pneumonia mortality rate (P 5 .03, 151 to 200 beds). In the context of for-profit hospitals, the relationship between TDR/TR and the overall mortality and readmission rate is positive and statistically insignificant (b 5 .013, P 5 .092), similar to nonprofit hospitals. TDR/TR positively correlated with 7 of the 8 patient experience measures, including communication with doctors (P 5 .15) and responsiveness of hospital staff (P 5 .14). TDR/TR negatively correlated with 6 patient experience measures, including communication with doctors (P 5 .10), when looking at for-profit hospitals (Table 2).
Comments This analysis represents the largest study examining the role of altruism in the quality of care in the US healthcare system. We demonstrated that nonprofit hospitals with higher level of TDR/TR, our surrogate for altruism, are associated with better overall process of care. In this analysis, we used process measures as direct indicators of quality. A high score
on process measures requires hospitals to comply with best practice protocol with accurate documentation and reduces subjectivity or possibility for gaming. Our analysis of TDR/ TR strongly supports our hypothesis that altruistic hospitals provide superior quality care as measured by these process measures. In this analysis, we also demonstrate that a higher level of TDR/TR does not adversely affect mortality or readmission rates. In the context of subjective patient experience, hospitals with higher TDR/TR almost exclusively correlated with better patient reviews (Table 2). Although the TDR/TR coefficients were not statistically significant, the measures of communication with doctors and responsiveness of hospital staff demonstrated a positive association suggesting that a higher TDR/TR was more predictive of improved patient interactions with physicians and hospital staff resulting in positive patient scores. Our analysis has some limitations. First, TDR/TR represents an approximation for altruism and reduced TDR can be explained by alternative means. The hospital’s capability for delivering care at reduced rates may also be because of financial necessity rather than a deliberate decision motivated by concern for patient welfare. Many economists have argued that ‘‘the medical profession constitutes a monopoly, and . price discrimination by doctors, ie, scaling fees to the income of patients, has been explained as the behavior of a discriminating monopolist,’’ resulting in ‘‘monopoly gains that accrue to the members of this profession.’’8 Nonprofit hospitals may also make
V. Chang et al.
Linking access with quality of care
financial decisions to stay competitive and reduced rates may be driven by the same profit-maximizing motivations that drive for-profit hospitals. However, in our analysis, TDR/TR demonstrates a differential effect on quality when applied to nonprofit versus for-profit hospitals. TDR/TR had no conclusive effect on quality for-profit hospitals, whereas TDR/TR was statistically significant and positive for process quality measures for nonprofit hospitals (Table 2). If we assume for-profit hospitals to be profitmaximizing firms, the contrary behavior of nonprofit hospitals must be explained by an alternative motive. We assume that one of those motives to be altruistic care. Second, the health of indigent patients is affected by access to a variety of commodities. Nutritional status, access to shelter and appropriate living conditions, clothing and sanitation, education, and insight with regard to health problems will impact the outcomes evaluated by our process measures independent to the quality of care provided.9 We assume that at a hospital that primarily provides indigent care, a larger proportion of patients may be indigent, and have different access to health commodities including but not limited to access to quality care. In this context, different patient outcomes will be impacted by factors other than the quality of care provided by the hospital. Third, subjective measures and gaming with the report card system can affect outcome scores.10 Outcome measures that are redesigned to limit gaming and adjust fairly for risk are needed to provide a more objective assessment. Finally, our data are derived from a single geographical state and the applicability of TDR/TR to other regions has not been validated.
Conclusions This represents the first study in the literature examining altruism and quality of care. We defined altruism as the inclusion of patient welfare in a hospital/physician’s utility function. Using quality data from MHC and a financial proxy, TDR/TR, we found that TDR/TR predicts quality and process measures in nonprofit hospitals without affecting mortality and readmission. Analyzing the same regressions for for-profit hospitals, we found TDR/TR to have no predictive value for any of the quality measures. Assuming for-profit hospitals as profit maximizers, the marked difference between the predictive power of TDR/TR on quality for nonprofit and for-profit hospitals suggests that TDR/TR is a valid proxy for altruism in nonprofit hospitals. Our analysis suggests that altruistic motivation and the quality of care provided by hospitals that prioritize this mission may be associated with the delivery of higher quality care.
References 1. Dranove D. Code Red: An Economist Explains How to Revive the Healthcare System without Destroying It. Princeton, NJ: Princeton University Press; 2009.
461 2. Arrow KJ. Uncertainty and the welfare economics of medical care. Am Econ Rev 1963;53:941–73. 3. Dranove D. Health care markets, regulators, and certifiers, 2. Amsterdam, North-Holland: Handbook Health Econ; 2012. p. 639–90. 4. Eisenberg JM. Doctors’ Decisions and the Cost of Medical Care. Ann Arbor, MI: Health Administration Press; 1986. 5. McGuire TG. Physician agency, 1. Amsterdam, North-Holland: Handbook Health Econ; 2000. p. 461–536. 6. Roomkin MJ, Weisbrod BA. Managerial compensation and incentives in for-profit and nonprofit hospitals. J L Econ Organ 1999;15:750–81. 7. http://medicare.gov/hospitalcompare/Data/30-day-measures.html (accessed on 10/15/2014). 8. Kessel RA. Price discrimination in medicine. J L Econ 1958;1:20–53. 9. Haan M, Kaplan GA, Camacho T. Poverty and health. Prospective evidence from the Alameda County Study. Am J Epidemiol 1987;125: 989–98. 10. Dranove D, Kessler D, McClellan M, et al. Is more information better? The effects of report cards on health care providers. J Polit Econ 2013; 111:555.
Discussion Dr Stephen F. Sener (Pasadena, CA). Could the authors tell us whether the term TDR/TR is a standard and defined term in accounting or economics? If so, has the term been previously validated in other data sets? And, if not, how do you propose to validate its use in future analyses? I would appreciate it if you could amplify in the logic, which relates TDR/TR to altruism. In the discussion you admit that the hospitals could be forced to accept a higher amount of discounted care simply to keep their doors open in tough economic times. But for me the premise that the amount of discounted care equates with altruism is a non-sequitur. So is there any historical precedence for this equation? I would have appreciated seeing the actual discounted amounts for each hospital. Furthermore, even though you told us in your presentation how you derived beta, could you be more explicit about that? I am sort of hard pressed to understand how beta could be less than zero as you showed in your one of your tables. Were there any hospitals in LA County that were excluded from the analysis? And, if so, what were your exclusion criteria? Dr Chang: This is actually a brand new term that we developed, TDR over TR. There has not been any other standards or–it’s not a standard defined term in either accounting or economics. But our logic behind it was that care produced at reduced rates or below costs could come from two motivations. In the economic theory, monopolies tend to price discriminate based on income. And this is done with profit maximizing intention. But the other motivation it comes from is the motivation of altruism. We want to provide care to anyone we can provide care to. So the data that we see demonstrates that motivation in nonprofit hospitals for doing so, comes from an altruistic backing because if you think about patients who are in lower socioeconomic situations and they have to seek care, they don’t have many options. Yet those patients have shown to receive superior care in those facilities, especially in nonprofit facilities that provide a lot of care at reduced rates or below cost.
462 So that was our logic behind TDR over TR. A way to validate this ratio would be to run them on larger samples or larger data sets, maybe expand the data set to the entire country. The way we determined the term ‘‘beta’’ was through the ordinary V squares method. So it was a very standard statistical method that we use to regress our variables. Negative beta value indicates that there is a negative correlation between TDR and altruism. It is just an indication of the directional correlation. And, finally, the hospitals that were excluded from this study were hospitals that either did not have enough financial data or quality data, and most of these hospitals were psychiatric hospitals, for obvious reasons. Dr Donald Fry (Chicago, IL). I might just challenge, if I may, the concept that this is some great sense of altruism, but, rather, is the intrinsic sense of physicians to want to do their best as part of the motivation of solving a puzzle and not necessarily receiving great rewards for it. Dr Chang: That is definitely a possibility. Again, I guess we could better define our term as intrinsic motivation rather than just altruism. But, again, it is very hard to quantify intangible qualities that we’re discussing here. And this was just an attempt to do so. Dr Sukamal Saha (Flint, MI). Are you talking about, when you say ‘‘altruism,’’ is it mostly loaded up on the
The American Journal of Surgery, Vol 209, No 3, March 2015 physician side who is delivering care or the administration who is running the hospital? So that’s one question, if you can separate it out. Secondly, how come the nonprofit institution CEO consistently gets a bigger bonus than non for-profit hospitals? Dr Chang: It has been proven in the literature that nonprofit managers are more altruistic than for-profit managers. If we look at from that perspective, physicians working under managers who are more altruistic, may be under an environment where they can provide more altruistic care. Dr Anthony J. Senagore (Saginaw, MI). I am interested in why you chose LA County; if you had compared LA County to the San Francisco region, you might have come up with a very different conclusion, because in the valley, LA County, there are 212 hospitals. There is a large system, county system that takes out a lot of the uninsured off the bottom. And some large systems, like Kaiser that take off the cream. So all those 212 hospitals are sharing, by-and-large, underinsured or government insured patients at really a subsistence level because the largest commercial payer, pays sub-Medicare rates. So one of your calculations is inherently false in that the contractual discounts are an aberration of that economic system in LA County, not really a measure of their altruism in that region. They truly are on subsistence mode. Dr Chang: Further studies will further validate or invalidate our term.
