Hospitals that send patients home earlier can save money and the policy does not end up costing more later, researchers reported on Monday.

The intensive look at two common conditions - pneumonia and heart failure - showed that it may be possible to lower costs in the U.S. healthcare system without hurting patients, the researchers reported in the Archives of Internal Medicine.

“Most evidence did not support the ‘penny wise and pound foolish’ hypothesis that low-cost hospitals discharge patients earlier but have higher readmission rates and greater downstream inpatient cost of care,” Dr. Lena Chen of the Ann Arbor Veterans Affairs Medical Center and colleagues wrote.

They looked at quality of care, 30-day death rates, readmission rates, and six-month inpatient cost of care for nearly 800,000 heart failure and pneumonia patients in 2006.

They found a mixed bag. For congestive heart failure, hospitals that spent the most also had higher quality of care and lower death rates, but the opposite was true for pneumonia.

“At least for congestive heart failure and pneumonia, the overall relationship between a hospital’s cost of care and process quality of care is small and inconsistent,” they wrote.

“Low-cost hospitals had slightly higher readmission rates for congestive heart failure but did not generate higher hospital cost of care over time for congestive heart failure or for pneumonia.”

They noted that they only looked at two conditions and that while some low-cost hospitals may be more efficient, others could be skimping on care.

“We did not assess patient satisfaction or overuse,” Chen’s team added.

“The results of Chen and colleagues’ study add to the growing body of data demonstrating that spending more does not necessarily mean better care,” Dr. Mitchell Katz of the San Francisco Department of Public Health noted in a commentary.

Katz said Chen’s team found a broad range of costs.

“For a patient with pneumonia, costs varied from $1,897 per admission at the lowest-cost hospital to $15,829 per admission at the highest-cost hospital,” he wrote.

So-called comparative effectiveness research should go a long way to sorting out questions of where saving money may pay off, Katz said.

“Fortunately, the American Recovery and Reinvestment Act has dedicated $1.1 billion of stimulus funds to perform comparative effectiveness research,” he wrote.

President Barack Obama is trying to rejuvenate a stalled U.S. healthcare overhaul with his own version of a plan.

Obama will push the proposal at a bipartisan White House healthcare summit on Thursday and may consider urging Democrats in Congress to bypass Republicans using a process called reconciliation.

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* Cost, quality of care seem unrelated

* Study looked at heart failure and pneumonia

WASHINGTON (Reuters)