First-ever ranking examines costs at 3,000 hospitals, identifying $8 billion in potential Medicare savings
BOSTON, MA — A new analysis identifies the most cost-efficient hospitals in America and highlights how potentially billions of dollars could be saved in the nation’s Medicare program.
The analysis from the Lown Institute, a health care think tank, uncovered big differences in the cost of care between hospitals, even those within the same city.
The study analyzed data from more than 3,000 hospitals, looking at how much Medicare was billed and comparing that to how many patients died, both 30 and 90 days from admission.
Among hospitals with average 30-day mortality rates, costs ranged from $9,000 to $27,000 per patient. The study shows that if all hospitals matched the performance of the country’s most cost-efficient hospitals, there would be $8 billion in Medicare savings each year.
“If we want to keep costs low for the Medicare program and provide quality care for the 60 million Americans who depend on it, hospitals must be as efficient as possible,” said Vikas Saini, M.D., president of the Lown Institute. “The best hospitals prove that you can save Medicare dollars and deliver great patient outcomes at the same time.”
Ten most cost efficient hospitals in America
- Pinnacle Hospital (Crown Point, IN)
- St. Mary’s Regional Medical Center (Reno, NV)
- Mercy Medical Center Dubuque (Dubuque, IA)
- Encino Hospital Medical Center (Encino, CA)
- Park Ridge Health (Hendersonville, NC)
- Oroville Hospital (Oroville, CA)
- St. Michael’s Medical Center (Newark, NJ)
- UnityPoint Health – Meriter (Madison, WI)
- East Liverpool City Hospital (East Liverpool, OH)
- Maple Grove Hospital (Maple Grove, MN)
How cost of care differs between hospitals in the same city
This table compares Medicare costs for large major teaching hospitals in the same city with similar mortality rates. For each pair of hospitals, we calculate Potential Medicare Savings: how much Medicare would save if the less efficient hospital had the same per-patient costs as its more efficient peer.
| CITY | NAME | 30-DAY MORTALITY | 30-DAY PER-PATIENT COST | POTENTIAL MEDICARE SAVINGS |
|---|---|---|---|---|
| BALTIMORE | Johns Hopkins Bayview Medical Center | 6.5 | $12,697 | |
| The Johns Hopkins Hospital | 7.1 | $14,721 | $18.5 million | |
| BOSTON | Mount Auburn Hospital | 6.7 | $11,708 | |
| Brigham and Women’s Hospital | 6.8 | $14,567 | $33.4 million | |
| CHICAGO | Advocate Illinois Masonic Medical Center | 7.1 | $12,913 | |
| Rush University Medical Center | 7.9 | $16,372 | $27.5 million | |
| FT LAUDERDALE | JFK Medical Center | 9.8 | $13,289 | |
| St Mary’s Medical Center | 10.9 | $21,597 | $13.9 million | |
| HOUSTON | Baylor St. Luke’s Medical Center | 7.3 | $12,631 | |
| Memorial Hermann Texas Medical Center | 8.0 | $15,071 | $13.9 million | |
| INDIANAPOLIS | Franciscan Health Indianapolis | 8.9 | $14,073 | |
| Indiana University Health | 9.0 | $16,870 | $24.7 million | |
| LOS ANGELES | Huntington Memorial Hospital | 7.9 | $12,333 | |
| Loma Linda University Medical Center | 8.5 | $16,387 | $15.8 million | |
| SAN FRANCISCO | UCSF Medical Center | 6.8 | $14,042 | |
| Stanford Health | 6.8 | $16,648 | $21.4 million | |
| ST LOUIS | Mercy Hospital St. Louis | 7.5 | $13,997 | |
| Barnes Jewish Hospital | 8.3 | $16,075 | $25 million | |
| WASHINGTON DC | Howard University Hospital | 7.1 | $11,896 | |
| Medstar Georgetown University Hospital | 7.4 | $14,894 | $12.8 million |
The Institute tracked Medicare patients hospitalized from 2016-2018 using claims data, and adjusted both mortality rates and cost based on patient risk. Total Medicare cost included claims from inpatient hospitalizations and post-discharge claims (hospice, skilled nursing facilities, etc). Hospitals with the lowest mortality rates and lowest costs received the best scores on cost efficiency.
The study is part of the 2021 Lown Hospitals Index. A full methodology for the cost efficiency rankings is available.
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Join the creators of the Lown Hospitals Index and an expert panel on Tuesday, November 9 at 1 p.m. ET to discuss these findings and policies to incentivize better hospital cost efficiency.
ABOUT THE LOWN INSTITUTE
Founded in 1973 by Nobel Peace Prize winner Bernard Lown, MD, developer of the defibrillator and cardioverter, the Lown Institute believes that a radically better system of health is possible and generates bold ideas towards that goal. The Lown Hospitals Index, a signature project of the Institute, is the first ranking to assess the social responsibility of U.S. hospitals by applying measures never used before like racial inclusivity, avoidance of overuse, and pay equity.
CONTACT
Aaron Toleos at atoleos@lowninstitute.org or (978) 821-4620