Four Types of Hospitals

14 Oct

Today I want you to try out a thought experiment with me. Imagine that you were asked to rate hospitals according to the quality of care they provide and how much the care they provide costs. Then, imagine that you were asked to select a group of hospitals that should serve as the model for all hospitals in the country. In other words, with regards to quality and cost, you are trying to identify the “best” type of hospital. Which hospital or group of hospitals would you select as the best?

Well, you might consider creating a two-by-two table that contained all the possible combinations of quality and costs. So you’d have low quality, low cost hospitals; low quality, high cost hospitals; high quality, low cost hospitals; and high quality, high cost hospitals. Clearly, high quality is preferable to low quality, right? So the first two groups are clearly not the best. And, as far as cost goes, less is more, so the best hospitals are those in the high quality, low cost group, right? Well, it depends on who’s deciding.

The government, for example, loves the idea of high quality, low cost hospitals, because they provide maximum benefit at minimum expense. Such facilities could hold the key to enormous cost savings in health care. It turns out, though, that patients actually express a preference for the high quality, high cost hospitals. This according to a recent study by Ashish Jha, John Orav, and Arnie Epstein. The authors identify different levels of nurse staffing as explaining this patient preference. They don’t come right out and say it, but it seems that above a certain point, having more nurses on staff does nothing to improve quality of outcomes, but does improve patient satisfaction. In short, American hospital patients are paying to be pampered. If insurance didn’t foot so much of the bill, I wonder how much our preferences would change.

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Posted by on October 14, 2011 in Hospitals, Recent Research


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