Author + information
- Received October 3, 2017
- Revision received November 22, 2017
- Accepted November 26, 2017
- Published online April 11, 2018.
- Rishi K. Wadhera, MD, MPhila,b,
- Karen E. Joynt Maddox, MD, MPHc,
- Yun Wang, PhDb,d,
- Changyu Shen, PhDb and
- Robert W. Yeh, MD, MScb,∗ ()
- aBrigham and Women’s Hospital Heart & Vascular Center, Harvard Medical School, Boston, Massachusetts
- bRichard and Susan Smith Center for Outcomes Research in Cardiology, Division of Cardiology, Beth Israel Deaconess Medical and Harvard Medical School, Boston, Massachusetts
- cWashington University School of Medicine, Saint Louis, Missouri
- dDepartment of Biostatistics, Harvard T.H. Chan School of Public Health, Boston, Massachusetts
- ↵∗Address for correspondence:
Dr. Robert W. Yeh, Smith Center for Outcomes Research in Cardiology, Beth Israel Deaconess Medical Center, 185 Pilgrim Rd, Boston, MA 02215.
Objectives The purpose of this study was to examine the association of 30-day payments for an episode of heart failure (HF) care at the hospital level with patient outcomes.
Background There is increased focus among policymakers on improving value for HF care, given its rising prevalence and associated financial burden in the United States; however, little is known about the relationship between payments and mortality for a 30-day episode of HF care.
Methods Using Medicare claims data for all fee-for-service beneficiaries hospitalized for HF between July 1, 2011, and June 30, 2014, we examined the association between 30-day Medicare payments at the hospital level (beginning with a hospital admission for HF and across multiple settings following discharge) and patient 30-day mortality using mixed-effect logistic regression models.
Results We included 1,343,792 patients hospitalized for HF across 2,948 hospitals. Mean hospital-level 30-day Medicare payments per beneficiary were $15,423 ± $1,523. Overall observed mortality in the cohort was 11.3%. Higher hospital-level 30-day payments were associated with lower patient mortality after adjustment for patient characteristics (odds ratio per $1,000 increase in payments: 0.961; 95% confidence interval [CI]: 0.954 to 0.967). This relationship was slightly attenuated after accounting for hospital characteristics and HF volume, but remained significant (odds ratio per $1,000 increase: 0.968; 95% CI: 0.962 to 0.975). Additional adjustment for potential mediating factors, including cardiac service capability and post-acute service use, did not significantly affect the relationship.
Conclusions Higher hospital-level 30-day episode payments were associated with lower patient mortality following a hospitalization for HF. This has implications for policies that incentivize reduction in payments without considering value. Further investigation is needed to understand the mechanisms that underlie this relationship.
There is increased focus among policymakers on improving value for heart failure (HF) care, given the high and rising prevalence of HF and its associated financial burden in the United States (1). HF is the most common cause of hospitalization among Medicare beneficiaries and accounts for a large portion of total Medicare expenditures (2,3); however, mortality rates remain high, and improvements have slowed in recent years (4). To incent ongoing progress in both costs and outcomes of care, the Centers for Medicare and Medicaid Services (CMS), through the mandatory Hospital Value-based Purchasing (HVBP) program, financially rewards or penalizes hospitals based on performance on both mortality and payment measures for HF as well as other common conditions (5).
As value-based and alternative payment models increasingly spur hospitals to both reduce spending and improve outcomes for HF, it is important to understand how payments for an episode of HF care are related to clinical outcomes. Prior studies have demonstrated significant variation in payments associated with HF hospitalizations in the United States (6–8); however, little is known about whether higher payments are associated with better outcomes, which would at least potentially indicate high value, or whether higher payments are associated with worse outcomes, which would indicate poor value. The relationship is unclear, in part, because little is known about how higher payments might translate into actual care delivery. Higher payments may reflect the overuse of low-value resources or use of unnecessary post-acute care, which would not have a positive effect on outcomes. Alternatively, high payments may be driven by the use of resources and services that actually improve quality of care and survival. Given that for hospitals participating in HVBP, episode payment metrics together with 30-day mortality metrics account for one-half of a total score used by CMS to evaluate performance (and determine financial rewards or penalties), understanding the relationship between these measures for an episode of HF care is increasingly important and policy-relevant (5).
Therefore, in this study, we aimed to answer several questions. First, how do hospitals whose patients with HF incur high 30-day Medicare episode payments, reflecting both hospital-based and outpatient care in the immediate post-discharge time frame, differ from those with low episode payments? Second, are higher hospital-level 30-day episode payments for HF care, beginning with a hospital admission for HF and across multiple care settings following discharge, associated with lower patient-level mortality? And if so, to what extent do differences in hospital characteristics, cardiac service capability, and post-acute service use explain the association?
Eligible patients were fee-for-service Medicare beneficiaries aged 65 years or older hospitalized at an acute care hospital for HF based on principal discharge diagnosis codes from the International Classification of Diseases-9th Revision from July 1, 2011, through June 30, 2014. Patient characteristics included age, sex, and comorbidities that were defined based on a validated administrative claims model used to profile hospital 30-day mortality measures for HF (9). We applied inclusion criteria previously used by CMS for HF mortality rate measures. For patients with more than 1 HF admission across the 3-year period, only 1 randomly selected episode of care was included (7,9,10).
30-day episode payments for heart failure
Hospital-level risk-standardized payments for a 30-day episode of HF care (which from this point on will be referred to as episode payments), a measure made publicly available by CMS on Hospital Compare, were used to characterize payments across a 30-day period beginning with a hospital admission for HF (7,8). Episode payments reflect variations in hospital practice patterns and resource use related to HF care and are calculated by summing total payments associated with a 30-day episode of HF care for each beneficiary, beginning with index admission and across multiple care settings, services, and supplies (i.e., inpatient, outpatient, skilled nursing facility [SNF], home health, physician/clinical laboratory/ambulance services, durable medical equipment). In addition to inpatient payments, post-acute payments are attributed to the hospital of index HF admission because care and discharge planning during a hospitalization influences subsequent expenditures across care settings. Geographic differences and policy adjustments (i.e., for costs of living, graduate medical education, and disproportionate share hospitals) in Medicare payment rates are accounted for. Additionally, episode payments are risk-adjusted for differences in patient characteristics and hospital case mix and account for clustering of patients within hospitals. For patients transferred from 1 acute care hospital to another, total payments across 30 days are attributed to the first hospital where the patient was admitted (7). Hospitals in the Inpatient Prospective Payment System with too few HF cases (<25) were not included in the analysis. Hospital payment performance is assessed over a rolling 3-year period; here, we used performance data representing July 1, 2011, to June 30, 2014, which were used in the HVBP program in fiscal year 2016 (7).
We used episode payments because they represent health care expenditures from a payer’s (Medicare) perspective, and reflect a hospital’s style of practice in terms of the level of use of resources and services by their patients with HF; for example, some hospitals may tend to discharge more patients with HF to institutional post-acute care than others or to provide more post-discharge follow-up care. We focused on a 30-day episode of HF care because CMS payment measures through HVBP do so, making this the most policy-relevant approach to assessing value. Episode payments were assessed on a hospital rather than patient level to examine the effect of a patient population being exposed to varying styles of care rather than an individual patient being exposed to more intense care, and to diminish the likelihood of patient-level confounding (11).
Hospital characteristics were obtained from the 2013 American Hospital Association annual survey and included hospital size, census region, Joint Commission certification status, location (urban or rural), ownership (for-profit, private not-for-profit, and public), teaching status (large teaching vs. others), nurse-to-patient ratio, and cardiac service capability (percutaneous coronary intervention [PCI] and coronary artery bypass graft surgery). Additionally, using Medicare inpatient data, we calculated fee-for-service HF volume as well as the proportion of patients with HF discharged to an SNF or with homecare services for each hospital.
The primary outcome was patient-level 30-day mortality, defined as all-cause deaths within 30 days of the date of admission.
We classified 30-day HF episode payments at the hospital-level into low- (<25th percentile), average- (25th to 75th percentile), and high-spending (>75th percentile) for descriptive purposes, similar to previous studies (12–16). Bivariate analyses were performed to compare patient and hospital characteristics across episode payment categories, using the Mantel-Haenszel chi-square test for categorical variables and the Kruskal-Wallis test for continuous variables. To demonstrate geographic variability, we also mapped county-specific episode payments for HF care.
To evaluate the association between 30-day hospital-level episode payments and 30-day patient-level mortality, we fit a mixed model with a logit link function and random hospital intercepts to model mortality as a function of 30-day HF episode payments ($1,000). We fit the model in the following sequence: 1) unadjusted; 2) risk-adjusted for patient characteristics and comorbidities used by CMS to profile hospital 30-day mortality measures for HF (9); and 3) additionally adjusted for key hospital characteristics (ownership, major teaching hospital, urban vs. rural hospital, region, and nurse staffing) as well as HF volume. This allowed us to control for individual risk factors and institutional characteristics and make inferences at the patient level regarding the association of being exposed to different levels of 30-day payments for HF care and outcomes. Next, we explored potential mediating variables related to hospital payment including cardiac service capability and mean proportion of patients with HF discharged to SNF or with homecare services.
We performed several additional analyses. First, we examined the relationship between CMS hospital-level inpatient payments and patient mortality to determine if this relationship paralleled our primary analysis. Second, we performed quantile regression to assess the nature of the relationship between episode payments and outcomes (17). This allowed us to understand whether the association between episode payments and patient risk of mortality differed across quantiles of mortality. Third, we conducted an iterative nonparametric bootstrapping analysis with a replacement that randomly selected hospitals from the CMS episode payment dataset with a sample size equal to total hospitals in the dataset. We then refit the mixed models described above. We repeated this process 1,000 times to obtain the distribution of odds ratios for the association between payments and outcomes. Fourth, to understand whether patients who died required more or less expensive care (11), we assessed the relationship between patient-level inpatient payments and 30-day patient-level mortality. Finally, we also evaluated the relationship between hospital-level 30-day episode payments and 1-year mortality following the index hospitalization.
Statistical tests were 2-sided at a significance level of 0.05. Analyses were performed using SAS, version 9.4 64-bit (SAS Institute Inc., Cary, North Carolina).
Our study sample included 1,343,792 patients with HF hospitalized from July 1, 2011, through June 30, 2014, across 2,948 hospitals with ≥25 eligible HF cases and episode payment information. Patient demographics were generally similar across low, average, and high episode payment hospital groups (Online Table 1). Comorbidities, including the proportion of patients with a history of HF, coronary artery disease, prior myocardial infarction, stroke, and hypertension, were also similar across groups.
Hospital-Level Thirty-Day Episode Payments
The 30-day episode payments for HF care varied nearly 2-fold across hospitals (10). Mean 30-day episode payments were $15,423, with an SD of $1,523 (Online Figure 1). Median 30-day episode payments per beneficiary were $13,732 in the low-payment group, $15,308 in the average-payment group, and $17,207 in the high-payment group (Table 1). There was evidence of geographic variation in 30-day episode payments for HF care across the United States (Figure 1).
Hospital structural characteristics
Hospitals in the high 30-day episode payment group were larger, tended to be teaching hospitals, were more frequently Joint Commission accredited, were less likely to be public hospitals, and had lower nurse-staffing ratios compared with hospitals in the average- and low-payment groups (Table 1). High episode payment hospitals also had greater median Medicare fee-for-service HF volume and were more likely to provide cardiac services including cardiac surgery and PCI.
Hospital resource use and discharge patterns
Procedure and resource use during and immediately following hospitalization varied across episode payment groups (Table 2). Hospitals in the high 30-day episode payment group were more likely to perform cardiac catheterizations during initial hospitalization. Overall rates of revascularization were low, but high episode payment hospitals were also more likely to perform PCI and coronary artery bypass grafting surgery during initial inpatient stay. Patients cared for in high episode payment hospitals had longer mean lengths of stay and were less likely to be transferred to another institution. They were more likely to be discharged to an SNF or with homecare services. In addition, observed 30-day readmission rates were highest at average-payment institutions compared with low- and high-payment institutions.
30-day payments and patient mortality
Observed mortality in the overall population was 11.3%. Greater 30-day hospital-level episode payments were associated with lower 30-day patient mortality (unadjusted odds ratio [OR]: 0.975 for every $1,000 increase; 95% confidence interval [CI]: 0.969 to 0.982; p < 0.001) (Figure 2). This relationship became more pronounced following adjustment for patient characteristics (Table 3 and Online Table 2: OR: 0.961 per $1,000 increase; 95% CI: 0.954 to 0.967; p < 0.001). When patient characteristics, hospital characteristics, and HF volume were accounted for, higher hospital episode payments remained associated with lower 30-day patient mortality (OR: 0.968 per $1,000 increase; 95% CI: 0.962 to 0.975; p ≤ 0.001). Addition of variables that could potentially mediate the relationship between episode payments and outcomes, including cardiac service capability and discharge to SNF or homecare use, did not alter our findings (Table 3).
We found that the association between CMS hospital-level inpatient payments and patient mortality was similar to our main analysis (Online Table 3). We also examined whether the observed relationship between 30-day episode payments and mortality was consistent across all quantile levels of patient 30-day mortality. We found a predominately linear relationship across the distribution, although the association between episode payments and mortality was larger at higher quantiles of mortality (Online Figure 2). Our iterative bootstrapping simulation demonstrated that the distribution of the ORs of the association between payments and outcomes remained significant (Online Figure 3). To assess whether our primary findings may have been influenced by the fact that beneficiaries that died accrued less care, and therefore payments, patient-level payments and 30-day patient-level mortality were also examined. At the patient level, adjusted odds of 30-day mortality were higher for every $1,000 increase in payments (Online Table 4), diminishing the likelihood that our primary findings were due to patients that died requiring less care and payments. This is consistent with prior studies that have shown that care delivered to Medicare decedents is significantly more expensive than survivors during a hospitalization (11). Finally, we found that higher hospital-level 30-day episode payments following an HF hospitalization were also associated with lower 1 year mortality (Online Table 5).
In this study of Medicare payments and mortality rates among beneficiaries hospitalized for HF, we found that higher hospital-level Medicare payments for a 30-day episode of HF care, which included both inpatient and post-acute care payments across multiple settings, were associated with lower patient-level 30-day mortality, even after accounting for patient case mix. Overall, patients admitted for HF to hospitals with 30-day payments 1 SD ($1,523) above the mean, compared with hospitals 1 SD below the mean, had an associated ≈1.3% lower mortality. This association was attenuated, but remained significant after adjusting for key hospital characteristics and HF volume. Variation in hospital cardiac service capability and post-acute care use did not mediate the association between spending and outcomes. Collectively, our findings should not necessarily be interpreted as causal in nature, but rather, provide insight regarding HF care in the context of CMS value-based payment models, particularly given the continued evolution of HVBP and voluntary cardiac bundled payments (18).
There has been a broad interest among policymakers in improving the value of HF care, given the high and rising prevalence of HF and its associated financial burden. This interest is reflected in the addition of HF-specific spending measures, determined by Medicare payments made to hospitals, to the HVBP, and through alternate payment models (1,19). Hospital characteristics associated with higher longitudinal payments are not accounted for in CMS payment models, however, leaving certain institutions susceptible to penalties, even if they provide high-quality care. In fact, early evidence from the HVBP demonstrates that some hospital types that tend to have better outcomes, including major teaching hospitals (20,21), often have high payments, as in our study, and consequently are more likely to be penalized (22). Conversely, some low-payment institutions that also provide low-quality care receive financial rewards (22). Whether the HVBP program truly incents value, then, is unclear.
Because hospitals are held financially accountable for both longitudinal spending and outcomes following a hospitalization for HF, it will be important to understand what resources and services actually improve quality of care. It is possible that hospitals receiving higher payments use diagnostic testing, invasive procedures, specialist care, and intensive care units more frequently, to the benefit of outcomes (23). Alternatively, factors not captured in our study, such as use of education and counseling services, interdisciplinary collaborative ambulatory care, and home monitoring services, may result in higher payments, but better care quality (24–26). In addition, early and frequent outpatient follow-up and the type of outpatient care received following discharge (i.e., primary care provider vs. cardiologist vs. HF clinic), may have also mediated the observed relationship (24). Understanding these mechanisms will be essential to ensuring that hospitals do not respond to payment programs, such as the HVBP, by reducing expenditures in a manner that is ultimately detrimental to patient care, which is a potential unintended consequence. Additionally, identifying low-value procedures, resources, and services that are of little benefit to patient care will also be of equal importance as hospitals navigate where to reduce expenditures (27).
Our study found significant differences in institutional characteristics across low, average, and high episode payment groups. Although controlling for these characteristics in our analysis only somewhat attenuated our findings and does not necessarily account for heterogeneity in care delivered within hospitals, these patterns may shed light on potential underlying mechanisms. For example, high-payment hospitals were more likely to be large, teaching institutions. Previous studies have shown that admission for HF to major teaching hospitals, compared with nonteaching hospitals, is associated with lower 30-day mortality (20,21). Similarly, a greater proportion of high-payment hospitals were Joint Commission accredited, which has been linked to better performance on HF quality measures (28). HF volume and cardiac service capabilities also varied across hospital payment groups, which may reflect differences in institutional experience and expertise in caring for patients with HF. Collectively, these patterns suggest that greater capacity and expertise may result in better outcomes for patients with HF, albeit at higher costs.
We also found that beneficiaries at high-payment institutions had longer average lengths of stay, which may have resulted in patients being more clinically optimized at time of discharge. This kind of reasoning may also be supported by the Hospital Readmission Reduction Program; with its incentives to reduce readmission rates (29), the program may have helped counteract pressures for hospitals to discharge patients ever more quickly and encouraged greater care coordination. Notably, observed 30-day readmission rates were slightly higher in average episode payment institutions compared with low- and high-payment groups. In addition, patients at high-payment institutions were more likely to be discharged to SNFs and/or with home health services. Although SNF use has been linked at the patient level with a higher risk of death, likely because it reflects greater severity of illness (30), the use of home health services as a supplemental support mechanism has been associated with lower mortality after HF hospitalization (31,32). We found that the use of these post-acute care services did not explain the relationship between higher payments and better outcomes; thus, it is not clear whether such patterns necessarily reflect high-value HF care. This is consistent with prior work that has shown that greater high-intensity post-acute care use in higher-spending regions of the United States is not associated with better quality care (33). Because institutions have a greater financial stake in post-acute care for HF through shared-savings programs and episode-based payment models, they will be incentivized to ensure appropriate use of post-acute care services (34).
Prior investigations have focused on the association of inpatient spending with HF outcomes, although findings have been mixed. For example, a study of Medicare beneficiaries hospitalized in 2006 found that higher inpatient costs of care for HF were associated with lower mortality, whereas another found no relationship between risk-adjusted costs and HF outcomes (12,13). Two subsequent analyses in Medicare showed that higher hospital spending intensity was associated with better in-hospital HF outcomes. Both studies used an end-of-life expenditure index (spending on hospital and physician services provided in patients’ last years of life) to assess spending intensity. This measure is informative for care intensity in general, but may not necessarily reflect condition-specific treatment decisions for patients not at the end of life (14,16,35,36). Our study is novel in that it examined payments over a longitudinal episode that included both inpatient and post-discharge care across multiple settings, which has greater relevance given the movement toward episode-based reimbursement. In addition, we evaluated HF-specific payments, rather than hospital costs, thus reflecting use beyond hospitals’ internal cost structure.
There are limitations of this study. Because of the study’s observational nature, we are unable to make inferences about causation. We only examined Medicare patients older than age 65 years, and our findings may not generalize to other populations. Patients may have varied in ways that were not captured by the comorbidities coded in claims data; however, such unmeasured severity would have most likely biased our results toward the null. In addition, claims data do not capture clinical information (i.e., vital signs, ejection fraction, biomarkers, cardiac medications) that is of relevance to a HF population. We did not account for socioeconomic determinants of health, because payment programs such as HVBP do not, although these factors do play an important role in HF outcomes (37). Thirty-day episode payments reflected aggregate data at the hospital level, which may be subject to ecological fallacy, although our outcome was evaluated at the patient level. We also lacked detailed clinical data and a decomposition of episode payment data with which to identify specific mechanisms by which higher payments improved outcomes; this represents an important area for future study. Although we defined value as the relationship between payments and outcomes, we were unable to characterize quality of life, which is an important consideration when evaluating value of care. Because our sample size was large, our interpretation of this analysis focused on the estimated effect sizes for the relationship between episode payments and outcomes, rather than the extent to which p values were significant.
In summary, we found that, in a cohort of Medicare beneficiaries hospitalized for HF across a 3-year period, higher 30-day episode payments at the hospital level for HF care were associated with lower patient mortality. Emerging payment models seek to incentivize high-value HF care, but our findings illustrate the challenges institutions may face in balancing expenditures and clinical outcomes because these models hold practitioners and hospitals financially accountable for both these elements of care. Further research is needed to identify interventions that improve outcomes, both during and following hospitalization, to ensure that hospitals continue to invest in procedures, services, and resources that improve survival, while cutting wasteful use.
COMPETENCY IN MEDICAL KNOWLEDGE: Higher hospital-level 30-day payments following an admission for HF are associated with a lower likelihood of patient mortality.
TRANSLATIONAL OUTLOOK: Our findings highlight the challenges institutions may face as they are increasingly held financially responsible for both payments and outcomes associated with an episode of HF care through value-based and alternative payment programs. Further research is needed to understand the mechanisms that mediate the relationship between higher payments and better outcomes.
Dr. Wadhera is supported by National Institutes of Health Training Grant T32HL007604-32, Brigham and Women's Hospital, Division of Cardiovascular Medicine, and by the Jerome H. Grossman, MD, Fellowship in Healthcare Delivery Policy at the Harvard Kennedy School’s Healthcare Policy Program; and he previously served as a consultant for Sanofi and Regeneron. Dr. Joynt has received research support from the National Heart, Lung, and Blood Institute (K23HL109177-03); and is a former employee of the U.S. Department of Health and Human Services, where she continues work on a limited basis as a contractor. Dr. Yeh has received research support from the National Heart, Lung and Blood Institute (R01HL136708) and the Richard A. and Susan F. Smith Center for Outcomes Research in Cardiology. All other authors have reported that they have no relationships relevant to the contents of this paper to disclose.
- Abbreviations and Acronyms
- confidence interval
- Centers for Medicare and Medicaid Services
- heart failure
- Hospital Value-Based Purchasing Program
- percutaneous coronary intervention
- skilled nursing facility
- Received October 3, 2017.
- Revision received November 22, 2017.
- Accepted November 26, 2017.
- 2018 American College of Cardiology Foundation
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