Identifying high-value care for Medicare beneficiaries: a cross-sectional study of acute care hospitals in the USA

Objectives: High-value care is providing high quality care at low cost; we sought to define hospital value and identify the characteristics of hospitals which provide high-value care.

Design: Retrospective observational study.

Setting: Acute care hospitals in the USA.

Participants: All Medicare beneficiaries with claims included in Center for Medicare & Medicaid Services Overall Star Ratings or in publicly available Medicare spending per beneficiary data.

Primary and secondary outcome measures: Our primary outcome was value defined as the difference between Star Ratings quality score and Medicare spending; the secondary outcome was classification as a 4 or 5 star hospital with lowest quintile Medicare spending ('high value') or 1 or 2 star hospital with highest quintile spending ('low value').

Results: Two thousand nine hundred and fourteen hospitals had both quality and spending data, and were included. The value score had a mean (SD) of 0.58 (1.79). A total of 286 hospitals were classified as high value; these represented 28.6% of 999 4 and 5 star hospitals and 46.8% of 611 low cost hospitals. A total of 258 hospitals were classified as low value; these represented 26.6% of 970 1 and 2 star hospitals and 49.3% of 523 high cost hospitals. In regression models ownership, non-teaching status, beds, urbanity, nurse to bed ratio, percentage of dual eligible Medicare patients and percentage of disproportionate share hospital payments were associated with the primary value score.

Conclusions: There are high quality hospitals that are not high value, and a number of factors are strongly associated with being low or high value. These findings can inform efforts of policymakers and hospitals to increase the value of care.