Relating hospital health outcomes and resource expenditures

This study addresses the question of whether hospitals with better health outcomes for their patients spend more or less to accomplish these results. Adult medical service admissions to 43 Pennsylvania hospitals are analyzed. Health outcomes and resource expenditures are adjusted for admission severity of illness and other patient variables. The results demonstrate a positive correlation between adjusted mortality (logit regression) and adjusted total charges, ancillary charges, and length of stay (ordinary least squares regression), but only the mortality/length-of-stay relationship is statistically significant (p < .05). For patients staying at least four days, however, there is a statistically significant, positive relationship between adjusted mortality and all three adjusted measures of resource expenditures. The relationship between the adjusted morbidity and each of these three adjusted resource measures is positive and statistically significant. The positive relationship is largely unrelated to such readily observable hospital characteristics as size, staffing, teaching status, and location in urban areas.