Death by Insurance: Disparities in Healthcare Outcomes Based on Payment Methods

The October first unveiling of health insurance marketplaces created through the Affordable Care Act–combined with a lengthy government shutdown–has magnified national attention on healthcare policy in the United States. Americans currently utilize a number of options to pay for healthcare costs including employer-based insurance, government insurance programs, and out-of-pocket payments. But do these variations in payment for health-related expenses have an effect on the quality of care hospitals provide?

In an effort to answer this question, researchers Christine Spencer, Darrell Gaskin, and Eric Roberts explore the relationship between the quality of hospital care and the type of health insurance utilized by patients. Previous studies have indicated a decisive advantage in health outcomes for individuals with private insurance, but these results are limited because researchers typically compare outcomes across hospitals that tend to treat different classes of patients.

To isolate the effect that insurance may have on health outcomes, researchers in this study examine patients using different payment methods at the same hospital. This method eliminates the possibility that variations in health outcomes between hospitals are responsible for differences in treatment.

Using data collected from 2006-2008, the researchers measure the quality of care provided by each hospital in terms of mortality rates following the treatment of 15 highly complicated medical problems. Eight of the 15 health problems examined are serious surgical procedures, such as pancreatic resection (removal of the pancreas), craniotomy (removal of bone from the skull), and coronary bypass surgery. Medical conditions such as a stroke, heart attack, hip fracture, and pneumonia make up the remaining seven medical conditions. Using a total of 1,434 hospitals, researchers group the patients based on type of insurance into five categories: private, Medicare, Medicaid, self-payment/no payment, and “other” payment (including workers’ compensation and military health insurance options).

Results show that in the majority of medical complications examined, patients using private health insurance had a lower or significantly lower average mortality rate compared to patients with other types of insurance being treated at the same hospital. For example, patient mortality rates for craniotomy procedures ranged from 5.76 percent to 57.29 percent higher for the four other payment options compared to patient mortality rates for private health insurance holders at the same hospital. Notably, for 12 of the 15 medical issues, mortality rates for private insurance holders were found to be lower than mortality rates specifically for patients using Medicare.

For example, results show that individuals using Medicare and undergoing a pancreatic resection experienced 7.66 additional deaths per 1,000 patients compared to those with private insurance undergoing the same procedure. As the authors suggest, the data indicate that patients with Medicare may receive inferior care for certain medical issues in comparison to patients using private insurance at the same hospital. This is an alarming statistic, particularly for the around 50 million Americans using Medicare in the United States.

The underlying factors causing mortality rates to vary among patients with different types of health insurance remain unclear. Private health insurance may increase access to more experienced doctors and newer (and more expensive) medical technologies. Perhaps privately insured patients have better care over their lifespans, resulting in lower mortality rates when treated for serious medical problems.

However, it is important to note that in three of the medical problems examined in the study (congestive heart failure, stroke, and pneumonia), patients with private insurance had higher mortality rates than patients with Medicare. Further research must be carried out to determine why these medical conditions deviated from the underlying trend found in the study. Furthermore, the study’s conclusions were mostly limited to comparing the health outcomes of individuals with private insurance and Medicare, due to insufficient data collection for the other three payment options.

This study indicates (with reservations) that the quality of care provided by hospitals is indeed related to the type of insurance a patient has. Policy-makers must be mindful of this development by attempting to address disparities in care within individual hospitals, not just between them.  The promotion of policies that require the performance ratings of individual hospitals to include data regarding the quality of care patients receive based on payment method could begin to address this problem. In addition to bringing attention to the issue, hospitals would likely feel internal pressure to improve performance by ensuring that the quality of care a patient receives is not related to the patient’s means of payment for a health treatment.

Feature Photo: cc/(ReSurge International)