Skip to main content

Advertisement

SpringerLink
Log in

Hospital quality-review spending and patient safety: a longitudinal analysis using instrumental variables

  • Published:
Health Services and Outcomes Research Methodology Aims and scope Submit manuscript

Abstract

Since the landmark Institute of Medicine’s (IOM’s) 2000 report first focused attention to the problem of the safety of inpatient care, it has been a priority of hospital staffs, administrators, and policymakers. Despite remarkable progress in the 20 years since the IOM report, there is still much unknown about how these improvements in safety have been achieved. Using a 12-year (2004–2015) panel of Florida acute-care general hospitals, we estimate the relationship between hospital expenditure on peer (or quality) review and patient-safety outcomes, using a composite measure of patient safety (PSI-90) from the Agency for Healthcare Research and Quality. Our identification strategy to account for endogenous quality-review (QR) expenditure relies on exogeneity from within the hospital, in which we use staffing of non-acute ancillary services as instruments for QR expenditure. Estimation of hospital fixed effects (FE) with instrumental variables (FEIV) yields a statistically significant and beneficial effect of QR expenditure on patient safety. We find that, on average, a standard-deviation ($2.4 million) increase in QR expenditure is associated with a 16% decrease in adverse patient-safety events (i.e. PSI-90). Broadly, this study represents a unique contribution to the literature by examining a direct relationship between hospital peer-review spending and inpatient quality of care.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

Data availability

Hospital inpatient and financial data (2004–2015) available to the authors under a limited data use agreement with the Office of Data Dissemination, Agency for Health Care Administration (AHCA), 2727 Mahan Drive, Mail Stop #16, Tallahassee, FL 32308 (Attn: Arlene Schwahn).

Code availability

Custom code using Stata 16.

Notes

  1. More generally, Medicare and Medicaid require hospitals to engage in peer review to participate in these programs (Kinney 2009), and the primary accreditor of all U.S. hospitals, the Joint Commission on Accreditation of Hospitals, also requires peer review in order to obtain accreditation (Williams 2016).

  2. Formally, the exclusion restriction means that Zit is uncorrelated with εit after accounting for the partial effects of all other explanatory variables.

  3. In the first-stage regression of the IV model, diagnostic radiology and clinical testing had t-values of 1.62 and − 0.47, respectively. In addition, the LM redundancy test using all four instruments did not reject the null of instrument redundancy in the first-stage regression (p = 0.064). Redundancy among the four instruments is also supported by the very high correlation coefficients in Table 1 (columns 3–6).

  4. We used Stata routine, XTREG, for estimating the FE model, and XTIVREG2 for estimating the FEIV model.

  5. In constructing this variable, we used only the non-wage component of expenditures for these four ancillary service areas in order to better capture utilization of these services, as well as to avoid collinearity with our “FTE” instruments, which are included in the wage component of pharmacy and rehabilitation-services expenditures.

References

  • Agency for Health Care Administration (AHCA): State of Florida Hospital Uniform Reporting System Manual 2010-1. Tallahassee, FL (2010)

  • Agency for Health Care Administration (AHCA): Hospital Inpatient Discharge Data (FYs 2014–2015) and Hospital Financial Data (FYs 2004–2015). Tallahassee, FL: State of Florida, Office of Data Dissemination, Tallahassee, FL (2017)

  • Agency for Healthcare Research and Quality (AHRQ): Guide to Patient Safety Indicators. Rockville, MD (2006)

  • Agency for Healthcare Research and Quality (AHRQ): Patient Safety Indicators Composite Measure Workgroup Final Report. Rockville, MD (2008)

  • Agency for Healthcare Research and Quality (AHRQ): Quality Indicators Software Instructions, SAS, Version 4.5. Rockville, MD. http://www.qualityindicators.ahrq.gov/Software/SAS.aspx (2013). Accessed 18 June 2014

  • Agency for Healthcare Research and Quality (AHRQ): Release of AHRQ Quality Indicators Software for SAS Version 6.0. Rockville, MD. http://www.qualityindicators.ahrq.gov/Software/SAS.aspx (2017). Accessed 13 May 2020

  • Agency for Healthcare Research and Quality (AHRQ): Patient Safety Indicator Software Version SAS v2019.0.1, ICD-10-CM/PCS. Rockville, MD. http://www.qualityindicators.ahrq.gov/Software/SAS.aspx (2019). Accessed 13 May 2020

  • Aiken, L.H., Clarke, S.P., Cheung, R.B., Sloane, D.M., Silber, J.H.: Educational levels of hospital nurses and surgical patient mortality. J. Am. Med. Assoc. 290(12), 1617–1623 (2003)

    CAS  Google Scholar 

  • Anand, P., Kranker, K., Chen, A.Y.: Estimating the hospital costs of inpatient harms. Health Serv. Res. 54, 86–96 (2019)

    PubMed  Google Scholar 

  • Bardach, N.S., Chien, A.T., Dudley, R.A.: Small numbers limit the use of the inpatient pediatric quality indicators for hospital comparison. Acad. Pediatr. 10(4), 266–273 (2010)

    PubMed  PubMed Central  Google Scholar 

  • Baum, C.F., Schaffer, M.E., Stillman, S.: Enhanced routines for instrumental variables/generalized method of moments estimation and testing. Stand. Genom. Sci. 7(4), 465–506 (2007)

    Google Scholar 

  • Birkmeyer, J.D., Gust, C., Dimick, J.B., Birkmeyer, N.J.O., Skinner, J.S.: Hospital quality and the cost of inpatient surgery in the United States. Ann. Surg. 255(1), 1–5 (2012)

    PubMed  Google Scholar 

  • Boamah, S.A., Spence Laschinger, H.K., Wong, C., Clarke, S.: Effect of transformational leadership on job satisfaction and patient safety outcomes. Nurs. Outlook 66, 180–189 (2018)

    PubMed  Google Scholar 

  • Bureau of Labor Statistics: All items in South urban, all urban consumers, not seasonally adjusted (2000–2015). https://data.bls.gov/cgi-bin/surveymost?cu. (2016). Accessed 22 June 2017

  • Centers for Medicare and Medicaid Services (CMS): Hospital-acquired condition (HAC) reduction program. Baltimore, MD. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/HAC/Hospital-Acquired-Conditions. (2019). Accessed 21 Apr 2020

  • Chen, Q., Rosen, A.K., Borzecki, A., Shwartz, M.: Using harm-based weights for the AHRQ patient safety for selected indicators composite (PSI-90): does it affect assessment of hospital performance and financial penalties in veterans health administration hospitals? Health Serv. Res. 51(6, P. I), 2140–2157 (2016)

    PubMed  PubMed Central  Google Scholar 

  • Cook, A., Gaynor, M., Stephens, M., Jr., Taylor, L.: The effect of a hospital nurse staffing mandate on patient health outcomes: evidence from California’s minimum staffing regulation. J. Health Econ. 31, 340–348 (2012)

    PubMed  Google Scholar 

  • Dans, P.E.: Clinical peer review: burnishing a tarnished icon. Ann. Intern. Med. 118(7), 566–568 (1993)

    CAS  PubMed  Google Scholar 

  • Edwards, M.T.: Clinical peer review program self-evaluation for U.S. hospitals. Am. j. Med. Qual. 25(6), 474–480 (2010)

    PubMed  Google Scholar 

  • Edwards, M.T.: The objective impact of clinical peer review on hospital quality and safety. Am. J. Med. Qual. 26(2), 110–119 (2011)

    PubMed  Google Scholar 

  • Edwards, M.T.: In pursuit of quality and safety: an 8-year study of clinical peer review best practices in U.S. hospitals. Int. j. Qual. Health Care 30(8), 602–607 (2018)

    PubMed  Google Scholar 

  • Eggleston, K., Shen, Y., Lau, J., Schmid, C.H., Chan, J.: Hospital ownership and quality of care: what explains the different results in the literature? Health Econ. 17, 1345–1362 (2008)

    PubMed  Google Scholar 

  • Encinosa, W.E., Bernard, D.M.: Hospital finances and patient safety outcomes. Inquiry 42, 60–72 (2005)

    PubMed  Google Scholar 

  • Eriksen, B.O., Kristiansen, I.S., Nord, E., Pape, J.F., Almdahl, S.M., Hensrud, A., Jaeger, S.: The cost of inappropriate admissions: a study of health benefits and resource utilization in a department of internal medicine. J. Intern. Med. 246, 379–387 (1999)

    CAS  PubMed  Google Scholar 

  • Florida Hospital Association: Working together to prevent patient harm and reduce costs: FHA hospital engagement network update (March 2015). http://www.fha.org/reports-and-resources/show-details/2015-Hospital-Engagement-Network-Brief/107 (2015). Accessed 15 Sept 2019

  • Florida Legislature: Title XXIX (Public health), Chapter 395 (Hospital licensing and regulation), Subsection 0193 (Licensed facilities, peer review, disciplinary powers, agency or partnership with physicians). http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0300-0399/0395/Sections/0395.0193.html (2020a). Accessed 03 Dec 2020

  • Florida Legislature: Title XXIX (Public health), Chapter 395 (Hospital licensing and regulation), Subsection 1012 (Patient safety). http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0300-0399/0395/Sections/0395.1012.html (2020b). Accessed 03 Dec 2020

  • Frankel, A.S., Leonard, M.W., Denham, C.R.: Fair and just culture, team behavior, and leadership engagement: the tools to achieve high reliability. Health Serv. Res. 41(4, Part II), 1690–1709 (2006)

    PubMed  PubMed Central  Google Scholar 

  • Ginsburg, L.R., Chuang, Y.T., Berta, W.B., Norton, P.G., Ng, P., Tregunno, D., et al.: The relationship between organizational leadership for safety and learning from patient safety events. Health Serv. Res. 45, 607–632 (2010)

    PubMed  PubMed Central  Google Scholar 

  • Goldman, R.L.: The reliability of peer assessments of quality of care. JAMA 265(7), 958–960 (1992)

    Google Scholar 

  • Goodstein, J., Boeker, W., Stephan, J.: Professional interests and strategic flexibility: a political perspective on organizational contracting. Strateg. Manag. j. 17(7), 577–586 (1996)

    Google Scholar 

  • Gora-Harper, M.L., Rapp, R.P., Finney, J.P.: Development of a best-practice model at a university hospital to increase efficiency in the management of patients with community-acquired pneumonia. Am. j. Health Syst. Pharm. (2000). https://doi.org/10.1093/ajhp/57.suppl_3.S6

    Article  PubMed  Google Scholar 

  • Halpern, S.A.: Dynamics of professional control: internal coalitions and crossprofessional boundaries. Am. j. Sociol. 97(4), 994–1021 (1992)

    Google Scholar 

  • Homer, C.G., Bradham, D.D., Rushefsky, M.: Investor-owned and not-for-profit hospitals: beyond the cost and revenue debate. Health Aff. 3(1), 133–136 (1984)

    CAS  Google Scholar 

  • Iyer, S., Davis, K.L., Candrilli, S.: Opioid use patterns and health care resource utilization in patients with prescribed opioid therapy with and without constipation. Manag. Care 19, 44–51 (2010)

    PubMed  Google Scholar 

  • Kaplan, H.C., Provost, L.P., Froehle, C.M., Margolis, P.A.: The model for understanding success in quality (MUSIQ): building a theory of context in healthcare quality improvement. BMJ Qual. Saf. 21, 13–21 (2012)

    PubMed  Google Scholar 

  • Kinney, E.D.: Hospital peer review of physicians: does statutory immunity increase risk of unwarranted professional injury? J. Med. Law 57, 57–89 (2009)

    Google Scholar 

  • Kleibergen, F., Paap, R.: Generalized reduced rank tests using the singular value decomposition. J. Econom. 133, 97–126 (2006)

    Google Scholar 

  • Ko, A., Murry, J.S., Hoang, D.M., Harada, M.Y., Aquino, L., Coffey, C., et al.: High-value care in the surgical intensive care unit: the effect on ancillary services. J. Surg. Res. 202, 455–460 (2016)

    PubMed  Google Scholar 

  • Koepke, C.R.: Physician peer review immunity: time to euthanize a fatally flawed policy. J. Law Health 22(1), 1–16 (2009)

    Google Scholar 

  • Kohn, L.T., Corrigan, J., Donaldson, M.S.: To Err is Human: Building a Safer Healthsystem. National Academy Press, Washington (2000)

    Google Scholar 

  • Mark, B.A., Harless, D.W., Spetz, J., Reiter, K.L., Pink, G.H.: California’s minimum nurse staffing regulation: results from a natural experiment. Health Serv. Res. 48(2), 435–454 (2013)

    PubMed  Google Scholar 

  • Menachemi, N., Saunders, C., Chukmaitov, A., Matthews, M.C., Brooks, R.G.: Hospital adoption of information technologies and improved patient safety: a study of 98 hospitals in Florida. J. Healthc. Manag. 52(6), 398–410 (2007)

    PubMed  Google Scholar 

  • Merrill, K.C.: Leadership style and patient safety: Implications for nurse managers. J. Nurs. Adm. 45(6), 319–324 (2015)

    PubMed  Google Scholar 

  • Nathan, H., Atoria, C.L., Bach, P.B., Elkin, E.B.: Hospitial volume, complications, and the cost of surgery in the elderly. J. Clin. Oncol. 33(1), 107–114 (2015)

    PubMed  Google Scholar 

  • National Quality Forum (NQF): Patient Safety 2015 Final Technical Report. Washington, D.C. (2016)

  • Needleman, J., Buerhaus, P., Mattke, S., Stewart, M., Zelevinsky, K.: Nurse-staffing levels and the quality of care in hospitals. N. Engl. j. Med. 346(22), 1715–1722 (2002)

    PubMed  Google Scholar 

  • Needleman, J., Buerhaus, P.I., Zelevinsky, K., Mattke, S.: Nurse staffing in hospitals: is there a business case for quality? Health Aff. 25, 204–211 (2006)

    Google Scholar 

  • Norton, E.C., Li, J., Das, A., Chen, L.M.: Moneyball in medicare. J. Health Econ. 61, 259–273 (2018)

    PubMed  Google Scholar 

  • O’Connell, J., Bryan, P.B.: More Hippocrates, less hypocrisy: early offers as a means of implementing the Institute of Medicine’s recommendations on malpractice law. J. Law Health 15(1), 23–51 (2000)

    PubMed  Google Scholar 

  • Parente, S.T., McCullough, J.S.: Health information technology and patient safety: evidence from panel data. Health Aff. 28(2), 357–360 (2009)

    Google Scholar 

  • Rajaram, R., Barnard, C., Bilimoria, K.Y.: Concerns about using the patient safety indicator-90 composite in pay-for-performance programs. J. Am. Med. Assoc. 313(9), 897–898 (2015)

    CAS  Google Scholar 

  • Robinson, J.C.: The changing boundaries of the American hospital. Milbank q. 72(2), 259–275 (1994)

    CAS  PubMed  Google Scholar 

  • Rhee, J.V., Ritchie, J., Eward, A.M.: Resource use by physician assistant services versus teaching services. JAAPA 15(1), 33–42 (2002)

    PubMed  Google Scholar 

  • Scheutzow, S.O., Gillis, S.L.: Confidentiality and privilege of peer review information: more imagined than real. J. Law Health 7(2), 169–217 (1993)

    Google Scholar 

  • Sloan, F.A., Picone, G.A., Taylor, D.H., Jr., Chou, S.: Hospital ownership and cost and quality of care: is there a dime’s worth of difference? J. Health Econ. 20, 1–21 (2001)

    CAS  PubMed  Google Scholar 

  • Smith, R.B., Dynan, L., Fairbrother, G., Chabi, G., Simpson, L.: Medicaid, hospital financial stress, and the incidence of adverse medical events for children. Health Serv. Res. 47, 1621–1641 (2012)

    PubMed  PubMed Central  Google Scholar 

  • Smith, S., Snyder, A., McMahon, L.F., Jr., Petersen, L., Meddings, J.: Success in hospital-acquired pressure ulcer prevention: a tale in two data sets. Health Aff. 37(11), 1787–1796 (2018)

    Google Scholar 

  • Spetz, J., Harless, D.W., Herrera, C.N., Mark, B.A.: Using minimum nurse staffing regulations to measure the relationship between nursing and hospital quality of care. Med. Care Res. Rev. 70(4), 380–399 (2013)

    PubMed  Google Scholar 

  • Staiger, D., Stock, J.H.: Instrumental variables regression with weak instruments. Econometrica 65(3), 557–586 (1997)

    Google Scholar 

  • StataCorp: Stata: Release 16. Statistical Software. StataCorp LLC, College Station (2019)

  • Storch, T.: Medical peer review in Florida: is the privilege under attack? Nova Law Rev. 32(1), 269–293 (2007)

    Google Scholar 

  • Trustees of Dartmouth College: The Dartmouth Atlas of Health Care. http://www.dartmouthatlas.org/tools/downloads.aspx?tab=41 (2017). Accessed 21 May 2017

  • Wachter, R.M.: Patient safety at ten: Unmistakable progress, troubling gaps. Health Aff. 29(1), 165–173 (2010)

    Google Scholar 

  • Walker, L.E., Nestler, D.M., Laack, T.A., Clements, C.M., Erwin, P.J., Scanlan-Hanson, L., et al.: Clinical care review systems in healthcare: a systematic review. Int. j. Emerg. Med. (2018). https://doi.org/10.1186/s12245-018-0166-y

    Article  PubMed  PubMed Central  Google Scholar 

  • Weiner, B.J., Alexander, J.A., Shortell, S.M., Baker, L.C., Becker, M., Geppert, J.J.: Quality improvement implementation and hospital performance on quality indicators. Health Serv. Res. 41, 307–334 (2006)

    PubMed  PubMed Central  Google Scholar 

  • Williams, A.G.: Save thousands of lives every year: resuscitate the peer review privilege. J. Law Health 29(2), 221–246 (2016)

    PubMed  Google Scholar 

  • Wooldridge, J.M.: Econometric Analysis of Cross Section and Panel Data, 2nd edn. The MIT Press, Cambridge (2010)

    Google Scholar 

  • Zhan, C., Miller, M.R.: Excess length of stay, charges, and mortality attributable to medical injuries during hospitalization. J. Am. Med. Assoc. 290(14), 1868–1874 (2003)

    CAS  Google Scholar 

  • Zhan, C., Friedman, B., Mosso, A., Pronovost, P.: Medicare payment for selected adverse events: building the business case for investing in patient safety. Health Aff. 25, 1386–1393 (2006)

    Google Scholar 

Download references

Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Author information

Authors and Affiliations

  1. Department of Economics and Finance, Northern Kentucky University (NKU), BC 330, Nunn Drive, Highland Heights, KY, 41099, USA

    Linda Dynan

  2. James M. Anderson Center for Health Systems Excellence, Cincinnati Children’s Hospital Medical Center, 3333 Burnet Ave., MLC 7014, Cincinnati, OH, 45229-3039, USA

    Linda Dynan

  3. Department of Economics, University of South Florida (USF), 140 Seventh Ave. S, LPH 420, St. Petersburg, FL, 33701, USA

    Richard B. Smith

Authors
  1. Linda Dynan
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Richard B. Smith
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Richard B. Smith.

Ethics declarations

Conflict of interest

The authors declare that there is no conflict of interest.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendices

Appendix 1

See Table

Table 6 Ancillary cost centers used to construct FTE personnel instruments for QR spending
Full size table

6.

Appendix 2

See Table

Table 7 Effect of quality-review (QR) expenditure on patient-safety complications (PSI 90: composite PSI) weighted fixed effects with instrumental variables (FEIV) model, 158 Florida general hospitals, 2004–2015 (N = 1896)
Full size table

7.

Appendix 3

See Table

Table 8 Fully-specified and weighted alternative models and specifications, 2004–2015 (sensitivity analyses)
Full size table

8.

Appendix 4: References for instrumental-variables literature review

4.1 Pharmacy

Bond, C.A., Raehl, C.L.: Clinical pharmacy services, pharmacy staffing, and adverse drug reactions in United States hospitals. Pharmacotherapy 26(6), 735–747 (2006)

Bond, C.A., Raehl, C.L.: Clinical pharmacy services, pharmacy staffing, and hospital mortality rates. Pharmacotherapy 27(4), 481–493 (2007)

Gillespie, U., Mörlin, C., Hammarlund-Udenaes, M, Hedström, M.: Perceived value of ward-based pharmacists from the perspective of physicians and nurses. International Journal of Clinical Pharmacy 34, 127–135 (2012)

Jacknin, G., Nakamura, T., Smally, A.J., Ratzan, R.M.: Using pharmacists to optimize patient outcomes in the ED. American Journal of Emergency Medicine 32, 673–677 (2014)

4.2 Respiratory therapy

Dailey, R.T., Malinowski, T., Baugher, M., Rowley, D.D.: Impact of respiratory therapy assess-and-treat protocol on adult cardiothoracic ICU readmissions. Respiratory Care 62(5), 517–523 (2017)

Gay, E., Desai, S., McNeil, D.: A multidisciplinary intervention to improve care for high-risk COPD patients. American Journal of Medical Quality (2019). 10.1177/1062860619865329

Liang, X., Ying, H., Wang, H., Xu, H., Liu, M., Zhou, H., et al.: Enhance recovery care versus traditional care after laparoscopic liver resections: A randomized controlled trial. Surgical Endoscopy (2018). 10.1007/s00464-017-5973-3

Werre, N. D., Boucher, E. L., Beachey, W.D.: Comparison of therapist-directed and physician-directed respiratory care in COPD subjects with acute pneumonia. Respiratory Care 60(2), 151–154 (2015)

Zibrak, J.D., Rossetti, P., Wood, E.: Effects of reductions in respiratory therapy on patient outcome. New England Journal of Medicine 315(5), 292–295 (1986)

4.3 Physical therapy

Su, B., Newson, R., Soljak, H., Soljak, M.: Associations between post-operative rehabilitation of hip fracture and outcomes: National database analysis. BMC Musculoskeletal Disorders (2018). 10.1186/s12891-018-2093-8

Soeters, R., White, P.B., Murray-Weir, M., Koltsov, J.C.B. Alexiades, M.M., Ranawat, A.S.: Preoperative physical therapy education reduces time to meet functional milestones after total joint arthroplasty. Clinical Orthopaedics and Related Research (2017). 10.1007/s11999.0000000000000010

4.4 All

Maniaci, M.J., Dawson, N.L., Cowart, J.B., Richie, E.M., Suryaprasad, A.G., Hodge, D.O., et al.: Goal-directed achievement through geographic location (GAGL) reduces patient length of stay and adverse events. American Journal of Medical Quality (2019). 10.1177/1062860619879977.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Dynan, L., Smith, R.B. Hospital quality-review spending and patient safety: a longitudinal analysis using instrumental variables. Health Serv Outcomes Res Method 22, 16–48 (2022). https://doi.org/10.1007/s10742-021-00251-x

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10742-021-00251-x

Keywords

Search

Navigation