Association between costs and quality of acute myocardial infarction care hospitals under the Korea National Health Insurance program

If cost reductions produce a cost-quality trade-off, healthcare policy makers need to be more circumspect about the use of cost-effective initiatives. Additional empirical evidence about the relationship between cost and quality is needed to design a value-based payment system. We examined the association between cost and quality performances for acute myocardial infarction (AMI) care at the hospital level. In 2008, this cross-sectional study examined 69 hospitals with 6599 patients hospitalized under the Korea National Health Insurance (KNHI) program. We separately estimated hospital-specific effects on cost and quality using the fixed effect models adjusting for average patient risk. The analysis examined the association between the estimated hospital effects against the treatment cost and quality. All hospitals were distributed over the 4 cost x quality quadrants rather than concentrated in only the trade-off quadrants (i.e., above-average cost and above-average quality, below-average cost and below-average quality). We found no significant trade-off between cost and quality among hospitals providing AMI care in Korea. Our results further contribute to formulating a rationale for value-based hospital-level incentive programs by supporting the necessity of different approaches depending on the quality location of a hospital in these 4 quadrants.