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No correlation found between cost and quality of hospital care

States are beginning to make information regarding quality and costs of medical services at different hospitals in the state available to the public. And the information shows that there is no correlation between cost and quality of care. In the study, it was shown that the two highest paid hospitals in the state actually had death rates that were higher than expected. The study also illuminated the problem that good care can go unrewarded; one hospital with a high success rate in a large number of bypass surgeries, for instance, was paid an average payment less than half the amount of the state average.

Insurance providers are aware of the fact that their payment policies and practices do nothing to promote better care in hospitals. Medicare, for example, pays a relatively flat fee depending on location and type of hospital rather than outcome or quality of care. Medicare pays for the services hospitals provide, even if those services are only necessary because of medical mistakes or avoidable hospital infections. This study may put more pressure on insurance carriers and hospitals to be more transparent regarding quality of care, and may give insurance companies a reason to consider distinctions in the care provided.

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