Charge-to-Cost Ratio Varies among Common Urological Surgery Procedures

Hospital Charges for Urologic Surgery Episodes of Care Are Rising Despite Declining Costs

OBJECTIVE

To investigate the temporal relationship of hospital charges relative to recorded costs for surgical episodes of care.

PATIENTS AND METHODS

This retrospective cohort study selected individuals who underwent any of 8 index urologic surgical procedures at 392 unique institutions from January 1, 2005, through December 31, 2015. For each surgical encounter, cost and charge data reported by hospitals were extracted and adjusted to 2016 US dollars. Trend analysis and multivariable logistic regression modeling were used to assess outcomes. The primary outcome was trend in median charge and cost. Secondary outcomes consisted of hospital characteristics associated with membership in the highest quartile of institutional charge-to-cost ratio.

RESULTS

Cohort-level median cost per encounter trended down from $6824 in 2005 to $5586 in 2015 (P for trend<.001), and charges increased from $20,210 to $25,773 during the same period (P for trend<.001). Hospitals in the highest quartile of institutional charge-to-cost ratio were more likely to be safety net, nonteaching, urban, lower surgical volume, smaller, and located outside the Midwest (P<.001 for each characteristic).

CONCLUSION

The pricing trends shown herein could indicate some success in cost-containment for surgical episodes of care, although higher hospital charges may be increasingly used to bolster reimbursement from third-party payers and to compensate for escalating costs in other areas.

How Have Hospital Pricing Practices for Surgical Episodes of Care Responded to Affordable CareAct-Related Medicaid Expansion?

OBJECTIVE

To determine how Medicaid expansion under the Affordable Care Act of 2010 (ACA) has affected hospital pricing practices for surgical episodes of care.

METHODS

Given that safety net hospitals would be more vulnerable to decreasing reimbursement due to an increase in proportion of Medicaid patients, we utilized the Premier Healthcare Database to compare institutional charge-to-cost ratio (CCR) in safety net hospitals vs nonsafety net hospitals for 8 index urologic surgery procedures during the period from 2012 to 2015. The effect of Medicaid expansion on CCR was assessed through difference-in-differences analysis.

RESULTS

CCR among safety net hospitals increased from 4.06 to 4.30 following ACA-related Medicaid expansion. This did not significantly differ from the change among nonsafety net hospitals, which was from 4.00 to 4.38 (P = .086). The census division with the highest degree of Medicaid expansion experienced a smaller increase in CCR among safety net hospitals relative to nonsafety net (P < .0001). CCR increased by a greater degree in safety net hospitals compared to nonsafety net in the census division where Medicaid expansion was the least prevalent (P < .0001).

CONCLUSION

Safety net hospitals have not preferentially increased CCR in response to ACA-related Medicaid expansion. Census divisions where safety net hospitals did increase CCR more than their nonsafety net counterparts do not correspond to those where Medicaid expansion was most prevalent. This could indicate that, despite being more vulnerable to an increased proportion of more poorly reimbursing Medicaid patients, safety net hospitals have not reacted by increasing charges to private payers.