We found that higher hospital spending intensity was associated with better survival, lower readmission rates, and better quality of care for seriously ill, hospitalized patients in Ontario in a universal health care system with more selective access to medical technology. Higher-spending hospitals were higher-volume teaching or community hospitals with high-volume or specialist attending physicians and having specialized programs, such as regional cancer centers, and specialized services, such as on-site cardiac catheterization, cardiac surgery, and diagnostic imaging facilities. The study also points to plausible mechanisms through which higher spending may be associated with better outcomes.
Benefits appeared early, suggesting an acute-phase hospital effect. For acute conditions, timely access to preoperative and in-hospital specialist care, skilled nursing staff, rapid response teams, cardiac high-technology services, and regional cancer centers, all found in the higher-spending systems, are related to better outcomes.21,27,34–39
These systems also provided consistently, but not strikingly, higher levels of evidence-based care and collaborative ambulatory care, both shown to improve care.22,23,40
Higher spending on evidence-based services delivered in the acute phase of care for severely ill hospitalized patients—by far the largest component of spending for our cohorts—is indeed likely to be beneficial.
It would be facile to interpret this study as demonstrating that higher spending is causally related to better outcomes and that providing more money to lower-spending hospitals would necessarily improve their outcomes. Higher-spending hospitals differed in many ways, such as greater use of evidence-based care, skilled nursing and critical care staff, more intensive inpatient specialist services, and high technology, all of which are more expensive.
To place the study in context, the United States has a 3- to 4-times higher per capita supply of specialized technology, such as computed tomography and magnetic resonance imaging scanners, but a similar supply of acute care beds and nurses.41
Ontario 2001 population rates of cardiac testing and revascularization lagged behind corresponding 1992 US rates and paralleled the supply of cardiologists and catheterization facilities. 42–44
It is therefore possible that Canadian hospitals, with fewer specialized resources, selective access to medical technology, and global budgets, are using these resources more efficiently, especially during the inpatient episode for care-sensitive conditions.45,46
Canada’s health care expenditures per capita are about57%of those in the United States.47
At this spending level, there might still be a positive association between spending and outcomes. For example, the same-day PCI rate for patients with AMI in low-intensity hospitals in 2008 was 3.5%, leaving room for improvement. This pattern is consistent with studies in the United States showing a positive association between spending and outcomes among low-intensity hospitals or regions but no association at average or higher intensity levels.5,6
Strengths of the study include the population-based, longitudinal cohort design; the consistency of findings across cardiac, cancer, medical, and surgical patients; the examination of plausible clinical mechanisms whereby higher intensity maybe associated with better outcomes; and the examination of readmissions. The “look-back” (EOL-EI) and “look-forward” (AC-EI) measures of spending intensity were highly correlated and produced similar findings, as in US studies.2
Several limitations should be considered. Because the design precludes strong inferences about causation, we cannot know which components of care may have led to better outcomes. In observational studies, comparisons of exposure groups may be biased because of unobserved selection bias.13
It is unlikely that the findings are the result of unmeasured case mix, because patients in higher-spending hospitals had similar or higher illness severity at admission, which would, if anything, bias toward finding worse outcomes. We cannot rule out the possibility that higher-intensity hospitals coded more aggressively, but there is less incentive to do so in a system with global hospital budgets. Although admission severity would be determined more accurately using clinical detail from medical charts, previous work has shown high concordance between risk-adjusted hospital outcomes using chart and administrative data.48,49
Canadian data distinguish between comorbidities present at admission and complications, leading to improved admission severity coding. The EOL-EI has been critiqued for the purpose of estimating hospital efficiency50,51
but is used here simply to distinguish high- and low-intensity hospitals, as in other US studies. 1–4
The findings may not generalize to chronic conditions, for which avoiding exacerbations of disease that lead to hospitalization through coordinated ambulatory care is key. The findings also may not generalize to jurisdictions in which hospital resources are more abundant and are used in cost-effective as well as cost-ineffective ways, leading to inefficiency. 45,46
This study shows that in Ontario, a province with global hospital budgets and fewer specialized health care resources than the United States, outcomes following an acute hospitalization are positively associated with higher hospital spending intensity. Higher spending intensity, in turn, is associated with greater use of specialists, better patient care, and more use of advanced procedures. These results suggest that it is critical to understand not simply how much money is spent but whether it is spent on effective procedures and services.