Costs of care among Medicare patients were similar at teaching vs. nonteaching hospitals

The cost of a hospitalization was higher at a major teaching hospital than a nonteaching hospital, but physician costs and 30-day postacute care costs were lower, according to an analysis of common medical and surgical conditions among Medicare patients.


Medicare patients treated at major teaching hospitals had lower costs at 30 days and similar costs at 90 days compared to those treated at nonteaching hospitals, a recent study found.

Researchers compared total standardized costs at 30 days by hospital teaching status for common conditions and procedures. The cross-sectional study assessed the costs of hospitalizations among Medicare beneficiaries age 65 years and older at teaching and nonteaching hospitals from Jan. 1, 2014, to Nov. 30, 2015, for 15 medical conditions and six surgical procedures. Indirect medical education (IME) payments were not included in the primary analysis because they were designed to help pay for the additional costs associated with teaching. Results were published on June 7 by JAMA Network Open.

The sample included about 1.25 million hospitalizations at 3,064 hospitals (232 [7.6%] major teaching, 837 [27.3%] minor teaching, and 1,995 [65.1%] nonteaching hospitals). Overall, treatment at a major teaching hospital was associated with slightly lower total 30-day adjusted standardized costs ($18,605 vs. $18,793 at minor teaching hospitals and $18,873 at nonteaching hospitals; difference between major and nonteaching hospitals, −$268 [95% CI, −$456 to −$80]; P=0.005). Thirty-day total costs were lower at major teaching hospitals compared with nonteaching hospitals for 12 of 21 conditions and procedures. By 90 days, there was no difference in costs by teaching status ($24,982 at major teaching hospitals, $24,959 at minor teaching hospitals, and $25,044 at nonteaching hospitals; P =0.63 for the difference between major and nonteaching).

Treatment at a major teaching hospital was associated with higher spending for the index hospitalization ($8,529 at major, $8,370 at minor, and $8,180 at nonteaching hospitals; P<0.001 for the difference between major and nonteaching), but also with lower physician costs ($677 at major, $725 at minor, and $728 at nonteaching hospitals; P<0.001 for the difference between major and nonteaching). Postacute care costs at 30 days were lowest at major teaching hospitals ($6,015 at major, $6,239 at minor, and $6,260 at nonteaching hospitals; P<0.001 for the difference between major and nonteaching). When including IME payments, which increased Medicare spending by about $1,200 at 30 days, major teaching hospitals had higher total spending at 30 and 90 days.

The study was limited to hospitalizations among Medicare patients, so the results may not be generalizable to other populations, particularly commercially insured patients, the authors noted. In addition, the study did not consider how out-of-pocket spending for patients may differ by hospital teaching status and may have had unmeasured confounders (e.g., differences in coding intensity), they said.

The findings “may seem unexpected given a general consensus that teaching hospitals are more expensive and that the involvement of trainees in patient care is relatively inefficient,” the authors wrote. “This study suggests that although costs are somewhat higher for the initial hospitalization at major teaching hospitals, spending after hospital discharge, particularly on post–acute care services, is generally lower.”