Understanding the Extent and Drivers of Interphysician Cost Variation for Spine Procedures

Impact of Diagnosis-Related Groups (DRG) reform on cost homogeneity of treatment for patients with malignant tumours

The cost fluctuations associated with chemotherapy, radiotherapy, and immunotherapy, as primary modalities for treating malignant tumors, are closely related to medical decision-making and impose financial burdens on patients. In response to these challenges, China has implemented the Diagnosis-Related Group (DRG) payment system to standardize costs and control expenditures. This study collected hospitalization data from patients with malignant tumors who received chemotherapy, radiotherapy, and immunotherapy at Hospital H from 2018 to 2022. The dataset was segmented into two groups: the intervention group, treated with traditional Chinese medicine (TCM) alongside standard therapies, and the control group, treated with standard therapies alone. Changes and trends in hospitalization costs under the DRG policy were analyzed using propensity-score matching (PSM), standard deviation (SD), interquartile range (IQR), and concentration index (CI). Findings showed a decreasing trend in the standard deviation of hospitalization costs across all treatment modalities. Radiotherapy exhibited the most significant decrease, with costs reducing by 2547.37 CNY in the control group and 7387.35 CNY in the intervention group. Following the DRG implementation, the concentration indexes for chemotherapy and radiotherapy increased, while those for immunotherapy did not exhibit this pattern. Costs were more concentrated in patients who did not receive TCM treatment. In summary, DRG reform positively impacted the cost homogeneity of inpatient treatments for malignant tumors, particularly in the control group not receiving TCM treatment. The effects of DRG reform varied across different treatment modalities. Although short-term fluctuations in hospitalization costs may occur, initial evidence during the study period shows the positive impact of DRG reform on cost homogeneity.

Impact of Diagnosis-Related-Group (DRG) payment on variation in hospitalization expenditure: evidence from China

BACKGROUND

Diagnosis-Related-Group (DRG) payment is considered a crucial means of addressing the rapid increases of medical cost and variation in cost. This paper analyzes the impact of DRG payment on variation in hospitalization expenditure in China.

METHOD

Patients with chronic obstructive pulmonary disease (COPD), acute myocardial infarction (AMI) and cerebral infarction (CI) in a Chinese City Z were selected. Patients in the fee-for-service (FFS) payment group and the DRG payment group were used as the control group and intervention group, respectively, and propensity-score-matching (PSM) was conducted. Interquartile distance (IQR), standard deviation (SD) and concentration index were used to analyze variation and trends in terms of hospitalization expenditure across the different groups.

RESULTS

After DRG payment reform, the SD of hospitalization expenditure in respect of the COPD, AMI and CI patients in City Z decreased by 11,094, 4,833 and 4,987 CNY, respectively. The concentration indices of hospitalization expenditures for three diseases are all below 0 (statistically significant), with the absolute value tending to increase year by year.

CONCLUSION

DRG payment can be seen to guide medical service providers to provide effective treatment that can improve the consistency of medical care services, bringing the cost of medical care closer to its true clinical value.

Effect of Instrumented Spine Surgery on Length of Stay

INTRODUCTION

Total joint arthroplasty studies have identified that surgeries that take place later in the week have a longer length of stay compared with those earlier in the week. This has not been demonstrated in studies focused on anterior cervical diskectomy and fusions or minimally invasive lumbar laminectomies. All-inclusive instrumented spine surgeries, however, have not been analyzed. The purpose of this study was to determine whether day of surgery affects length of stay and whether there are predictive patient characteristics that affect length of stay in instrumented spine surgery.

METHODS

All instrumented spine surgeries in 2019 at a single academic tertiary center were retrospectively reviewed. Patients were categorized for surgical day and discharge disposition to home or a rehabilitation facility. Differences by patient characteristics in length of stay and discharge disposition were compared using Kruskal-Wallis and chi square tests along with multiple comparisons.

RESULTS

Seven hundred six patients were included in the analysis. Excluding Saturday, there were no differences in length of stay based on the day of surgery. Age older than 75 years, female, American Society of Anesthesiology (ASA) classification of 3 or 4, and an increased Charlson Comorbidity Index were all associated with a notable increase in length of stay. While most of the patients were discharged home, discharge to a rehabilitation facility stayed, on average, 4.7 days longer (6.8 days compared with 2.1 days, on average) and were associated with an age older than 66 years old, an ASA classification of 3 or 4, and a Charlson Comorbidity Index of 1 to 3.

CONCLUSIONS

Day of surgery does not affect length of stay in instrumented spine surgeries. Discharge to a rehabilitation facility, however, did increase the length of stay as did age older than 75 years, higher ASA classification, and increased Charlson Comorbidity Index classification.

A Five-Year Cost-Utility Analysis Comparing Synthetic Cage Versus Allograft Use in Anterior Cervical Discectomy and Fusion Surgery for Cervical Spondylotic Myelopathy

STUDY DESIGN

Retrospective cost-utility analysis.

OBJECTIVE

To conduct a cost-analysis comparing synthetic cage (SC) versus allograft (Allo) over a five-year time horizon.

SUMMARY OF BACKGROUND DATA

SC and Allo are two commonly used interbody choices for anterior cervical discectomy and fusion (ACDF) surgery. Previous analyses comparative analyses have reached mixed conclusions regarding their cost-effectiveness, yet recent estimates provide high-quality evidence.

MATERIALS AND METHODS

A decision-analysis model comparing the use of Allo versus SC was developed for a hypothetical 60-year-old patient with cervical spondylotic myelopathy undergoing single-level ACDF surgery. A comprehensive literature review was performed to estimate probabilities, costs (2020 USD) and quality-adjusted life years (QALYs) gained over a five-year period. A probabilistic sensitivity analysis using a Monte Carlo simulation of 1000 patients was carried out to calculate incremental cost-effectiveness ratio and net monetary benefits. One-way deterministic sensitivity analysis was performed to estimate the contribution of individual parameters to uncertainty in the model.

RESULTS

The use of Allo was favored in 81.6% of the iterations at a societal willing-to-pay threshold of 50,000 USD/QALY. Allo dominated (higher net QALYs and lower net costs) in 67.8% of the iterations. The incremental net monetary benefits in the Allo group was 2650 USD at a willing-to-pay threshold of 50,000 USD/QALY. One-way deterministic sensitivity analysis revealed that the cost of the index surgery was the only factor which significantly contributed to uncertainty.

CONCLUSION

Cost-utility analysis suggests that Allo maybe a more cost-effective option compared with SCs in adult patients undergoing ACDF for cervical spondylotic myelopathy.

Reaching the medicare allowable threshold in adult spinal deformity surgery: multicenter cost analysis comparing actual direct hospital costs versus what the government will pay

STUDY DESIGN

Retrospective multicenter cost analysis.

OBJECTIVE

To (1) determine if index episode of care (iEOC) costs of Adult Spinal Deformity (ASD) surgeries are below the Medicare Allowable (MA) threshold, and (2) identify variables that can predict iEOC cases that are below MA. Previous studies have suggested that actual direct hospital cost of Adult Spinal Deformity (ASD) surgery is higher than Medicare Allowable (MA) rates, which has become the benchmark reimbursement target for hospital accounting systems.

METHODS

From a prospective, multicenter ASD surgical database, patients undergoing long instrumented fusions (> 5 level) with cost data were identified. iEOC cost was calculated utilizing actual direct hospital cost. MA rates were calculated using hospital specific, year-appropriate CMS Inpatient Pricer Payment System. Recursive partitioning identified potentially modifiable variables that can predict iEOC cost < MA.

RESULTS

Administrative direct cost data from 210 patients were obtained from 4 of 11 centers. Ninety-five (45%) patients had iEOC cost < MA. There was significant variation across the four centers in both iEOC cost ($56,788-$78,878, p < 0.0001) and reimbursement ($40,623-$91,351, p < 0.0001) across deformity-specific DRGs (453,454,456,457). Academic centers were more likely to have iEOC costs < MA (67.2% vs 8.9%, p < 0.0001). Recursive partitioning (r² = 0.309) identified rhBMP-2 use of < 24 mg, sagittal plane deformity, a combined anterior/posterior approach, and an SF36-MCS < 39 as predictive for iEOC cost < MA. Performing an anterior/posterior approach reimburses between 14.7% and 121.1% more (2.2-fold) than posterior-only approach. This change in DRG allows iEOC cost to be more likely below the MA threshold.

CONCLUSION

There is significant institutional (private vs academic) variation in ASD reimbursement. BMP use, deformity type, approach, and baseline mental health impact ASD surgery cost being below Medicare reimbursement. ASD surgeries with anterior/posterior approaches are in DRGs that can potentially reimburse 2.2-fold the posterior-only surgery, making it more likely to fall below the MA threshold.

LEVEL OF EVIDENCE

III.

Variation in Intraoperative and Postoperative Utilization for 3 Common General Surgery Procedures

OBJECTIVE

The aim of this study was to understand variation in intraoperative and postoperative utilization for common general surgery procedures.

SUMMARY BACKGROUND DATA

Reducing surgical costs is paramount to the viability of hospitals.

METHODS

Retrospective analysis of electronic health record data for 7762 operations from 2 health systems. Adult patients undergoing laparoscopic cholecystectomy, appendectomy, and inguinal/femoral hernia repair between November 1, 2013 and November 30, 2017 were reviewed for 3 utilization measures: intraoperative disposable supply costs, procedure time, and postoperative length of stay (LOS). Crossed hierarchical regression models were fit to understand case-mixed adjusted variation in utilization across surgeons and locations and to rank surgeons.

RESULTS

The number of surgeons performing each type of operation ranged from 20 to 63. The variation explained by surgeons ranged from 8.9% to 38.2% for supply costs, from 15.1% to 54.6% for procedure time, and from 1.3% to 7.0% for postoperative LOS. The variation explained by location ranged from 12.1% to 26.3% for supply costs, from 0.2% to 2.5% for procedure time, and from 0.0% to 31.8% for postoperative LOS. There was a positive correlation (ρ = 0.49, P = 0.03) between surgeons' higher supply costs and longer procedure times for hernia repair, but there was no correlation between other utilization measures for hernia repair and no correlation between any of the utilization measures for laparoscopic appendectomy or cholecystectomy.

CONCLUSIONS

Surgeons are significant drivers of variation in surgical supply costs and procedure time, but much less so for postoperative LOS. Intraoperative and postoperative utilization profiles can be generated for individual surgeons and may be an important tool for reducing surgical costs.

Spine Instrumented Surgery on a Budget-Tools for Lowering Cost Without Changing Outcome

STUDY DESIGN

Review article.

OBJECTIVES

There have been substantial increases in the utilization of complex spinal surgery in the last 20 years. Spinal instrumented surgery is associated with high costs as well as significant variation in approach and care. The objective of this manuscript is to identify and review drivers of instrumented spine surgery cost and explain how surgeons can reduce costs without compromising outcome.

METHODS

A literature search was conducted using PubMed. The literature review returned 217 citations. 27 publications were found to meet the inclusion criteria. The relevant literature on drivers of spine instrumented surgery cost is reviewed.

RESULTS

The drivers of cost in instrumented spine surgery are varied and include implant costs, complications, readmissions, facility-based costs, surgeon-driven preferences, and patient comorbidities. Each major cost driver represents an opportunity for potential reductions in cost. With high resource utilization and often uncertain outcomes, spinal surgery has been heavily scrutinized by payers and hospital systems, with efforts to reduce costs and standardize surgical approach and care pathways.

CONCLUSIONS

Education about cost and commitment to standardization would be useful strategies to reduce cost without compromising patient-reported outcomes after instrumented spinal fusion.

Does day of surgery affect length of stay and hospital charges following lumbar decompression?

Study Design:

This is a retrospective cohort study.

Introduction:

Spine procedures are the most expensive surgical interventions on a per-case basis. Previously, orthopedic procedures occurring later in the week have been associated with an increased length of stay (LOS) and consequent increase in costs. However, no such analysis has been performed on common spinal procedures such as minimally invasive lumbar decompression (MIS LD). The purpose of this study is to determine if there is an association between day of surgery and LOS or direct hospital costs after MIS LD.

Materials and Methods:

A prospectively maintained surgical database of patients who underwent primary, single, or multilevel MIS LD for degenerative spinal pathology between 2008 and 2017 was reviewed. Patients undergoing MIS LD were grouped as early in the week (Monday/Tuesday) or late in the week (Thursday/Friday). Differences in patient demographics and preoperative characteristics were compared using χ 2 analysis or Student’s t-test. Associations between date of surgery, LOS, and costs were assessed using multivariate linear regression.

Results:

A total of 717 patients were included. Of these, 420 (58.6%) were in the early surgery cohort and 297 (41.4%) were in the late surgery cohort. There were no differences in demographic characteristics, operative levels, operative time, blood loss, or hospital LOS between cohorts ( p > 0.05). Furthermore, there was no difference in total direct costs or specific cost categories between cohorts ( p > 0.05).

Discussion:

The timing of surgery within the week is not associated with differences in inpatient LOS or hospital costs following MIS LD. As such, hospitals should not alter surgical scheduling patterns to restrict these procedures to certain days within the week.

Effect of Surgical Setting on Hospital-Reported Outcomes for Elective Lumbar Spinal Procedures: Tertiary Versus Community Hospitals

STUDY DESIGN

Retrospective cohort study.

OBJECTIVE

As hospital compensation becomes increasingly dependent on pay-for-performance and bundled payment compensation models, hospitals seek to reduce costs and increase quality. To our knowledge, no reported data compare these measures between hospital settings for elective lumbar procedures. The study compares hospital-reported outcomes and costs for elective lumbar procedures performed at a tertiary hospital (TH) versus community hospitals (CH) within a single health care system.

METHODS

Retrospective review of a physician-maintained, prospectively collected database consisting of 1 TH and 4 CH for 3 common lumbar surgeries from 2015 to 2016. Patients undergoing primary elective microdiscectomy for disc herniation, laminectomy for spinal stenosis, and laminectomy with fusion for degenerative spondylolisthesis were included. Patients were excluded for traumatic, infectious, or malignant pathology. Comparing hospital settings, outcomes included length of stay (LOS), rates of 30-day readmissions, potentially preventable complications (PPC), and discharge to rehabilitation facility, and hospital costs.

RESULTS

A total of 892 patients (n = 217 microdiscectomies, n = 302 laminectomies, and n = 373 laminectomy fusions) were included. The TH served a younger patient population with fewer comorbid conditions and a higher proportion of African Americans. The TH performed more decompressions (P < .001) per level fused; the CH performed more interbody fusions (P = .007). Cost of performing microdiscectomy (P < .001) and laminectomy (P = .014) was significantly higher at the TH, but there was no significant difference for laminectomy with fusion. In a multivariable stepwise linear regression analysis, the TH was significantly more expensive for single-level microdiscectomy (P < .001) and laminectomy with single-level fusion (P < .001), but trended toward significance for laminectomy without fusion (P = .052). No difference existed for PPC or readmissions rate. Patients undergoing laminectomy without fusion were discharged to a facility more often at the TH (P = .019).

CONCLUSIONS

We provide hospital-reported outcomes between a TH and CH. Significant differences in patient characteristics and surgical practices exist between surgical settings. Despite minimal differences in hospital-reported outcomes, the TH was significantly more expensive.

Intersurgeon Cost Variability in Anterior Cervical Discectomy and Fusion

STUDY DESIGN

Retrospective review of prospective patient outcomes and cost data.

OBJECTIVE

To analyze the contribution of surgeon-specific variability in cost and patient-reported outcomes (PROs) to overall variability in anterior cervical discectomy and fusion (ACDF), whereas adjusting for patient comorbidities.

SUMMARY OF BACKGROUND DATA

Cost reduction in surgical care has received increased attention. Patient factors contributing to cost variability in ACDF have been described; however, intersurgeon cost and outcome variability has received less attention in the literature.

METHODS

Adult patients undergoing elective primary ACDF by five different surgeons were analyzed from a prospective registry database. Direct and indirect 90-day costs were compared across each surgeon, along with PROs. Predicted costs were calculated based on patient co-morbidities, and an "observed versus expected" cost differential was measured for each surgeon; this O/E cost ratio was then compared with PROs.

RESULTS

A total of 431 patients were included in the analysis. There were no differences in comorbidities, age, smoking status, or narcotic use. There was significant variation between surgeons in total 90-day costs, as well as variation between each surgeon's observed versus expected cost ratio. Despite these surgeon-specific cost variations, there were no differences in PROs across the participating surgeons.

CONCLUSION

Intersurgeon cost variation in elective ACDF persists even after adjusting for patient comorbidities. There was no apparent correlation between increased surgeon-specific costs and 90-day PROs. These findings show there is opportunity for improvement in inter-surgeon cost variation without compromise in PROs.

LEVEL OF EVIDENCE

3.

Spine Surgeon Treatment Variability: The Impact on Costs

STUDY DESIGN

Cross-sectional analysis.

OBJECTIVES

Given the lack of strong evidence/guidelines on appropriate treatment for lumbar spine disease, substantial variability exists among surgical treatments utilized, which is associated with differences in costs to treat a given pathology. Our goal was to investigate the variability in costs among spine surgeons nationally for the same pathology in similar patients.

METHODS

Four hundred forty-five spine surgeons completed a survey of clinical and radiographic case scenarios on patients with recurrent lumbar disc herniation, low back pain, and spondylolisthesis. Those surveyed were asked to provide various details including their geographical location, specialty, and fellowship training. Treatment options included no surgery, anterior lumbar interbody fusion, posterolateral fusion, and transforaminal/posterior lumbar interbody fusion. Costs were estimated via Medicare national payment amounts.

RESULTS

For recurrent lumbar disc herniation, no difference in costs existed for patients undergoing their first revision microdiscectomy. However, for patients undergoing another microdiscectomy, surgeons who operated <100 times/year had significantly lower costs than those who operated >200 times/year (P < .001) and those with 5-15 years of experience had significantly higher costs than those with >15 years (P < .001). For the treatment of low back pain, academic surgeons kept costs about 55% lower than private practice surgeons (P < .001). In the treatment of spondylolisthesis, there was significant treatment variability without significant differences in costs.

CONCLUSIONS

Significant variability in surgical treatment paradigms exists for different pathologies. Understanding why variability in treatment selection exists in similar clinical contexts across practices is important to ensure the most cost-effective delivery of care among spine surgeons.

Payor Reform Opportunities for Spine Surgery: Part II: The Potential Emergence of Population Health

The pressures on spine surgery to adopt value-based reimbursement models are being seen in the increased implementation of bundled payment strategies. Given that bundled payment models typically link payments to the initiation of the surgical episode in question, despite their potential cost-saving attributes, financial incentives remain tied to the volume of services being provided. As payors and policy makers look to find savings by focusing on waste and variation of care, more comprehensive models such population health strategies are now being develop and deployed. The clinical delivery and cost variation currently seen in spine health management make spine surgery an acute target of such population health strategies. Spine surgeons should understand the forces driving such changes and the opportunities to optimize performance within them.

Practice patterns in longitudinal lupus care provision: patient and physician perspectives

Background/purpose

To plan a quality improvement project, we need to understand the practice patterns of physicians. We undertook an online survey of systemic lupus erythematosus (SLE) patients and physicians providing care to SLE patients to determine the patterns of medical care provided to SLE patients.

Materials and methods

Two self-report surveys were developed. A 12-item survey for the patients and a 13-item survey for physicians enquired about longitudinal care for SLE. Surveys were administered online to physicians providing care to SLE patients, and to patients who self-identified as having SLE, through the Lupus Society of Illinois. Patient and physician data were analyzed for physician practice patterns for SLE care, using chi square tests and t tests. A P value of 0.05 or less was considered significant on two-tailed tests.

Results

A total of 283 patients completed the survey. Mean (SD) age and disease duration of patients were 45.9 (13.2) and 12.7 (9.7) years. Half of the participants were being seen at 3–4-month intervals. More than 70% of patients reported being tested for antinuclear antibody (ANA), and 20–30% anti-ENA antibody and Sjögren’s (SSA/SSB) antibodies, respectively, at each follow-up visit. Eighty-six rheumatologists completed the surveys. Mean (SD) age was 55 (12) years and 56% were men. More than half (54%) provided care only in a private practice setting. More than 80% of physicians reported seeing their SLE patients at 3–4-month interval. Only 2% reported performing ANA tests at each visit, while 4–5% performed anti-ENA and anti-SSA/SSB antibody tests at each visit for their SLE patients. More than 75% of physicians in private practice also ordered sedimentation rate at each visit for their SLE patients.

Conclusions

Unnecessary laboratory investigations may be being ordered routinely for patients at every visit. These results indicate a need for physician education on indications and utility of some of the laboratory tests such as ANA.

Payor Reform Opportunities for Spine Surgery: Part I: Background and Stimulus for Bundled Payments

Spine surgery, and orthopedic surgery overall, is being increasingly scrutinized by payors due to large projected increases in utilization. The unsustainability of the fee-for-service payment system has lead payors to investigate novel value and risk-based contracting strategies on an episode of care basis and on a population health basis. These forays into progressive models for spine surgery have been supported by the successes demonstrated by advanced payor reform programs from The Centers for Medicare and Medicaid Services in other areas of musculoskeletal medicine. Whether they are focused on lower extremity arthroplasty or spinal surgery, these pressures are forcing hospitals and physicians to align to improve quality and reduce costs through new structures and relationships. However, in many respects spine surgery has been years behind the wave of market pressures seen in other orthopedic subspecialties, such as arthroplasty. As such, the recognition and understanding of the forces and motivations driving the massive pressures responsible for these will better equip the spine surgeon to adapt and ultimately master such transformations.