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Methods:

Using the 100% national claims files, we identified all US hospitals performing coronary artery bypass graft, total hip replacement, abdominal aortic aneurysm repair, or colectomy procedures between 2005 and 2007. For each procedure, we ranked hospitals by their risk-and reliability-adjusted outcomes (complication and mortality rates, respectively) and sorted them into quintiles. We then examined relationships between hospital outcomes and risk-adjusted, 30-day episode payments.

Results:

There was a strong, positive correlation between hospital complication rates and episode payments for all procedures. With coronary artery bypass graft, for example, hospitals in the highest complication quintile had average payments that were $5353 per patient higher than at hospitals in the lowest quintile ($46,024 vs $40,671, P< 0.001). Payments to hospitals with high complication rates were also higher for …