Characteristics and Cost Drivers of High-Cost Hospitals

A 2008 report produced by the Medicare Payment Advisory Commission (MedPAC) found that 20% of hospitals had consistently higher costs than other hospitals.  KNG Health identified key characteristics and cost drivers for those hospitals classified by MedPAC as high-cost hospitals.  The study compared low and high-cost hospitals across a number of dimensions, including hospital-wide and Medicare-specific cost factors, quality measures, and overall Medicare spending per beneficiary.  The study shows that, generally, high-cost hospitals have higher costs across multiple factors, but performed better on process-of-care quality measures than low-cost hospitals.

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