Academic Medical Centers Are Trailing Their Non-AMC Counterparts in Cost and Quality, Navigant Report Says

Navigant in Healthcare Finance News

Despite academic medical centers having earned strong reputations for cutting-edge and specialty care, a new analysis from healthcare services firm Navigant indicates academic medical centers generally trail non-AMCs in both cost and quality metrics. The study also finds no significant difference in quality outcomes between the two types of facilities.

Navigant's analysis is based on data from 387 U.S. hospitals, including 175 AMCs and 212 non-AMCs that have more than $500 million in annual net patient revenue and 10,000 annual discharges. Facilities that didn't report financial data in 2016 and CMS value-based program scores for FY 2018 weren't included in the analysis.

The analysis shows that the cost per case was 5.8 percent higher at AMCs in 2017, which equals an average $3.1 million added annual operating expense per AMC. Moreover, there was no big difference between the cost per case for high and low performers at both types of institutions. The cost per case disparity between high and low performers was 22 percent for AMCs and 19.8 percent for non-AMCs, equal to $12 million per AMC and $9.2 million per non-AMC in added annual operating expense.

AMCs also were hit with more overall value-based program penalties from 2016-2018, with 40 percent getting seven or more of nine possible penalties versus 23.1 percent of non-AMCs. Additionally, overall weighted performance on CMS readmission, hospital-acquired condition, and value-based program measures showed a slight disparity as well. Despite AMC performance increasing by 10.4 percent from 2016 to 2018, their scores still lag behind non-AMCs by 1.3 points.

Navigant said the trends challenging AMCs could cause a domino effect, triggering more hurdles and pressures. As consumers look more to value indicators to make care destination decisions, poor performance and penalties could impact patient volumes, especially commercially insured patients. Sub-par performance could also mean penalties and missed bonuses for those participating in APMs. It could weigh on ACO decisions.

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