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Costs of care similar or lower at teaching hospitals compared to non-teaching hospitals

The total costs of care for the first 30 days after hospitalization were lower at major teaching hospitals.

Jeff Lagasse, Associate Editor

Total costs of care are similar or somewhat lower among teaching hospitals compared to non-teaching hospitals among Medicare beneficiaries treated for common medical and surgical conditions, according to a new study led by researchers from Harvard T.H. Chan School of Public Health and Beth Israel Deaconess Medical Center.

The authors, whose work was published in JAMA Network Open, were surprised by the findings, having expected that better outcomes at teaching hospitals would be accompanied by higher costs. But as far as Medicare is concerned, that didn't seem to hold true.


Teaching hospitals, which educate and train healthcare professionals, are generally considered to be more expensive than non-teaching hospitals, and some insurers and policymakers have advocated shifting care away from these institutions to lower healthcare spending for patients.

But the degree to which treatment at major teaching hospitals is associated with higher healthcare spending in general and for Medicare, the largest national payer, is not well understood.

For the study, researchers analyzed data for some of the most common medical and surgical conditions from more than 1.2 million hospitalizations of Medicare beneficiaries at more than 3,000 major, minor, and non-teaching hospitals, from 2014 to 2015. These included pneumonia, congestive heart failure and hip replacement. They drew from deidentified administrative Medicare claims data.

They found that major teaching hospitals had higher initial hospitalization costs than non-teaching hospitals, but that the total costs of care for the first 30 days after the hospitalization were lower at major teaching hospitals, largely due to lower costs for follow-up care and readmissions. Costs were similar at teaching and non-teaching hospitals at 90 days after hospitalization.

The takeaway, authors said, was that understanding variation in healthcare costs should entail examining what happens in the hospital as well as in total spending for an acute episode.


Stroke patients appear to receive better care at teaching hospitals with less of a chance of landing back in a hospital during the early stages of recovery, according to 2018 research from The University of Texas Health Science Center at Houston.

The findings have potential implications for costs at all hospitals, as facilities with worse-than-average 30-day readmission rates are subject to reimbursement penalties from the Centers for Medicare and Medicaid Services.

Readmissions have become a focus for improving both costs and care quality, and the authors hope to set national performance benchmarks for readmissions levels among stroke patients of all ages.

Twitter: @JELagasse

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