Analysis Using Identical Patient Types Across Providers and the Implications for the Health Care Supply Chain

Along the health care supply chain, cost and quality measures are vital in the decision-making process for treatment and care delivery. This study applies statistical significance to a hypothesis about cost effectiveness of patients’ total charges by health insurance providers for different heart conditions. A retrospective, observational analysis of data is collected from an urban hospital in the Southeastern United States. Using the Agency for Healthcare Research and Quality (AHRQ) database, diagnoses are selected for further analysis based on their prevalence in the general population. The numbers of procedures as well as the patient’s length of stay in the hospital are significantly higher among the Medicare population. However, results indicate that although Medicaid and Medicare have significantly higher ordinary average total charges than the private counterparts, the difference is negligible when comparing means adjusted to remove covariate influence. One implication is that if private insurers were to insure the same types of high risk patients as Medicare and Medicaid the average total charges of a visit would be comparable between providers. These results also suggest that to enhance cost saving measures in government funded insurance programs, the clinical pathways need to be adapted to reduce length of stay and number of procedures per visit.