Canadian Hospitals That Spend More on Patients Get More

Canadian hospitals that spent the most on patient care may be getting a bigger bang for their buck than their U.S. counterparts, researchers suggested.

A study reported in the Journal of the American Medical Association compared patient results between Canadian hospitals that spent more on care, and those that spent less. It found patients in the first category had lower death rates and were less likely to be admitted to intensive care.

Research on the U.S. health-care system, however, has shown that higher spending at hospital systems doesn’t guarantee better results, according to the study’s author, Therese Stukel.

“When we spend more, and when we place these specialized resources, we’re doing it in an efficient way,” said Stukel, a senior scientist at the Institute for Clinical Evaluative Sciences in Toronto, in a telephone interview. “That’s in contrast to the U.S.”

Under Canada’s system of universal health care, patients at high-spend hospitals had longer lengths of stay and more specialist visits, the study found. That’s because the health plan in Canada, where per capita health expenditures are 57 percent of those in the U.S., better allocates expensive specialists and technology, Stukel said.

While the U.S. has a 3- to 4-times higher per capita supply of expensive, specialized technology, such as MRIs, it has a similar supply of hospital beds and nurses as Canadian hospitals, according to the study.

Dartmouth Atlas

The Canadian findings may help to better understand studies such as the Dartmouth Atlas of Healthcare, a 20-year research project that has documented variations in how medical resources are distributed in the U.S. The data has shown that the parts of the country that spent the most per patient have worse patient outcomes than low-spending areas.

The Canadian study “breaks through the generalization,” that all spending is bad, said David Goodman, co-principal investigator at the Dartmouth Atlas, in a telephone interview. “It’s important that we look at spending in the aggregate and where more is better, and where more is worse.”

The U.S. health-care law signed in 2010 has several components designed to slow spending and have U.S. hospitals emulate the coordinated care of their Canadian brethren. Those measures haven’t been without controversy. Republicans are seeking to repeal the law’s Independent Payment Advisory Board, which will cut Medicare rates with limited oversight from lawmakers.

The law’s Accountable Care Organizations have Medicare pay hospitals bonuses when they coordinate to provide better care and save money. Health systems are penalized if they overspend or produce worse outcomes.

Misinterpreting Dartmouth

In an editorial accompanying the research, Karen Joynt and Ashish Jha, researchers at the Harvard School of Public Health, said some policymakers have drawn wrong conclusions from the Dartmouth data.

“What Dartmouth investigators have documented through careful work is that dysfunctional systems produce expensive, poor-quality care,” Joynt and Jha wrote.

Stukel’s Canadian study examined nearly 400,000 cases of heart attack, heart failure, hip fracture and colon cancer in Ontario hospitals over 10 years, looking at whether the patients died or were readmitted.

The most expensive Canadian hospitals in the study spent about twice as much per patient than their lower-spending counterparts. For every condition the study looked at, patients died less often and were readmitted less often at the more expensive hospitals.

Expensive Hospitals

Those more expensive hospitals had something else in common -- they were often academic hospitals, or community hospitals that saw more patients than others, they had cancer centers attached, lots of specialists on staff, performed more advanced procedures, had more technology and nurses that spent more time with patients. Patients were also more likely to get a follow-up visit within a year and get more intensive discharge care.

“Sometimes it just costs more money to have better outcomes,” Dartmouth’s Goodman said.

That’s not to say that putting more money into lower- spending Canadian hospitals would produce better care there.

“It would be facile to interpret this study as demonstrating that higher spending is causally related to better outcomes and providing more money to lower spending hospitals would necessarily improve their outcomes,” Stukel and her co- authors said in the study.

Instead, it’s better care coordination and spending on the right types of care that improve outcomes, as well as limited budgets on overall spending, Stukel said.

Coordinated Systems

Stukel said she doesn’t advocate a Canadian-style system of universal coverage in the U.S. She said that coordinated U.S. managed care systems, like Kaiser Permanente in California, Intermountain Healthcare in Salt Lake City, and Geisinger Health System in Pennsylvania are models the rest of the country emulate.

She predicts that Canadian hospitals will likely use her study to ask the government there for more money, even though that’s not the point of her research.

“If we put more dollars into the acute care system, it might still improve, it might peak,” she said. “It’s not just putting money into the system, it’s where we spend it.”

To contact the reporter on this story: Drew Armstrong in New York at darmstrong17@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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