The Covert Rationing Blog

You Mean, Cost Doesn’t Equate to Quality?

June 15th, 2007 by DrRich

The New York Times reported yesterday on a survey of the 60 hospitals in Pennsylvania that perform cardiac bypass surgery, and noted that hospitals that were paid up to $100,000 per operation had results that were no better (and in some cases worse) than hospitals that were paid only $20,000 per operation. The newsworthiness? The surprise? Apparently, that higher cost doesn’t yield higher quality.

DrRich is not puzzled at the outcome of this report, only at the apparent surprise. Who thought that hospitals were paid according to the quality of the care they give?

The prices hospitals receive from insurers are, in fact, negotiated. Therefore, the highest prices go to the hospitals which are the best at negotiating. (And to this extent, DrRich supposes, the prices do actually reflect one variety of quality.) Such negotiations may include emphasizing the unique features that a particular hospital may offer such as teaching, medical research, celebrity doctors, celebrity patients, cool fountains, etc. Negotiations may also involve taking key “deciders” on retreats or golf outings, offering quid pro quos, and engaging in intimidation, threats, bribes or seduction. DrRich may be leaving out a few negotiating tools but you get the idea. The outcome of such negotiations are the difference between life and death for hospitals, so they can’t afford to leave a stone unturned.

What DrRich has just written is of course entirely unfair. He has never participated in any of these particular negotiations, and really doesn’t know first hand what’s involved. It could be entirely on the up and up. But the fact remains that the prices hospitals receive are based not on objective quality measures, or any other variety of objective measure, but instead on give and take between humans. One can only assume that, for an issue of such import, anything that might influence humans will therefore be tried.

To expect such a process to track well with quality-based outcomes seems unrealistic. The fact that a report now shows that it does not ought not engender either surprise or indignation.

Besides, who gets to say what quality really is, anyway? Oh, wait. DrRich has just remembered - for hospitals, it’s Newsweek.

In any case, all this is explained by the Grand Unification Theory of Healthcare.

Posted in General Rationing Issues

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