Linking health outcomes and resource efficiency for hospitalized patients: do physicians with low mortality and morbidity rates also have low resource expenditures?

This study addresses the question of whether physicians with better health outcomes for their patients spend more or less to accomplish these results. Several studies have examined this outcome-cost relationship at the hospital level, but the results are conflicting. The study sample (using an administrative database [1995 MQPro Comparative Database, MediQual Systems, Inc., Westborough, MA, USA]) comprised 175,249 adult medical service admissions to 100 hospitals in 25 states spanning 26 diagnosis-related groups (DRGs) during 1993 and 1994. Logistic regression models were used to estimate the expected probability of in-hospital mortality or morbidity; age, sex, severity of illness on admission, year of admission, insurance status and hospital were controlled for. The regression residuals were employed as quality indicators. Residual charges and length of stay (LOS) were estimated for each patient using an ordinary least squares regression model and were employed as resource efficiency indicators. A positive, statistically significant association at the physician level was found between mean morbidity residuals and each of the three mean resource efficiency residuals (LOS, 1.42 beta coefficient; ancillary charges, 1.78; and total charges, 1.27, all significant at the P < 0.001 level). The same positive and significant association was found between mortality residuals and each resource efficiency residual (LOS, 0.77 beta coefficient; ancillary charges, 0.80; and total charges, 0.68, all significant at the P < 0.01 level) when patients staying only one or two days were excluded. The results support our hypothesis that, on average, physicians with lower adjusted mortality or morbidity rates also have lower adjusted resource expenditures.