Spending More Matters When Your Child’s Heart is on the Line

Children who had surgery for congenital heart disease (CHD) in higher-cost hospitals fared significantly better than similar CHD patients in other settings, according to a study led by Schaeffer Center faculty members John Romley and Dana Goldman and researchers from the Children’s Hospital Los Angeles.

National conversations on health care cost have led to the conclusion that more money spent on healthcare doesn’t always equal better results. However, Romley and his team in the October 2013 issue of Health Services Research found that children undergoing CHD surgery in higher-cost hospitals experience better health outcomes than those at lower-costs hospitals.

Previously, many researchers looked at older populations in assessing the impact of greater healthcare spending. Here, researchers turned their focus to pediatric patients in acute-care hospitals. This may change the way some think about inpatient healthcare spending.

“We thought it would be interesting to focus this question on a pediatric context,” Romley said. “In the overall hospital context, more money doesn’t always equal less in return. As a researcher, it’s very easy to come to the wrong conclusion because costs aren’t really reflecting what’s being done to patients but what their health status is—those two ideas are being confounded.”

The team looked at a national sample of children admitted to hospitals in 2003, 2006, and 2009 from the Kids’ Inpatient Database, Healthcare Cost and Utilization Project.  They found a strong relationship between hospital costs and inpatient mortality after adjusting for some patient, hospital, and community characteristics. According to those results, an increase in treatment costs from the 25th percentile to the 75th percentile netted a 13.6% reduction in risk-adjusted mortality for pediatric CHD patients.

In addition to finding that higher spending in specific situations may translate into improved outcomes, the researchers also sought to better understand the relationship between cost and risk-adjusted mortality. Through the study, researchers identified a $3.8 million increase in hospital costs per patient life saved, a number that has important policy implications for quality of care.

These results lead to further inquiry about the mechanisms that drive healthcare costs and why some drivers are ultimately better at providing quality care.

“A key question is, ‘what is it about higher costs that may be translating into better outcomes,’” Romley said. “Understanding those mechanisms is important. Just putting a dollar sign up doesn’t tell you much. Moving forward, that’s why it’s really important for us to examine and understand what’s going on under the hood.”

Written by Jeremy Loudenback, MPP Candidate, Sol Price School of Public Policy