Factors associated with geographic variation in cost per episode of care for three medical conditions

Regional variation from 2013 to 2021 in primary total shoulder arthroplasty utilization, reimbursement, and patient populations

BACKGROUND

Total shoulder arthroplasty (TSA), encompassing both anatomical and reverse TSA, has increased in popularity worldwide. The purpose of this study was to assess how TSA utilization, reimbursement, surgeon practices, and patient populations have evolved within the Medicare population from 2013 to 2021 at a national and regional level.

METHODS

The Medicare Physician and Other Practitioners dataset was queried for all episodes of primary TSA (CPT-23472), both anatomic and reverse, between years 2013 and 2021. TSA utilization was assessed as volume per 10,000 Medicare beneficiaries. Average inflation-adjusted reimbursement, physician practice styles, and patient demographics of each TSA surgeon were extracted each year. Data were stratified geographically based on US census classifications and rural-urban commuting codes. Kruskal-Wallis and multivariate regressions were utilized to determine differences between regions.

RESULTS

Between 2013 and 2021 TSA utilization increased by 121.8%, nationally. The increase was greatest in the Northeast (+147.2%) and least in the Midwest (+115.5%). Average TSA reimbursement declined by 8.8% nationally, with the least decline in the Northeast (6.4%) and the greatest decline in the Midwest (-11.9%). In 2021, the Midwest had the highest TSA utilization (18.1/10,000), while having the lowest average reimbursement ($1108.59; P < .001). The Northeast had the lowest utilization (11.5/10,000) and highest reimbursement ($1223.44; P < .001) in 2021. Nationally, the number of Medicare beneficiaries per surgeon performing shoulder arthroplasty declined by 5.9%, while the average number of TSAs per surgeon (+8.5%) and average number of billable services per beneficiary (+16.6%) both increased. Surgeons in the South performed the most services per beneficiary in 2021 (9.0; P < .001). The average comorbidity burden of patients was decreased by 4.8% between 2013 and 2021, with the West having the healthiest patients in 2021. Higher patient comorbidities were associated with lower physician reimbursement nationally (P < .001).

CONCLUSION

This study demonstrates that TSA utilization in the Medicare population has more than doubled between 2013 and 2021, while average inflation-adjusted reimbursement has declined by nearly 10%. The Midwest has the highest per-capita TSA utilization, while simultaneously having the lowest average reimbursement per TSA. Over time, TSA surgeons are seeing fewer and healthier beneficiaries but performing more services per beneficiary. Additionally, increased patient complexity may be associated with lower reimbursement. Together, these findings are concerning for long-term equitable access to care within shoulder surgery.

Target Price Adjustment for Hip Fractures Is Not Sufficient in the Bundled Payments for Care Improvement Initiative

BACKGROUND

Under the Bundled Payments for Care Improvement (BPCI) initiative, the Centers for Medicare and Medicaid Services (CMS) adjusts the target price for total hip arthroplasty (THA) based upon the historical proportion of fracture cases. Concerns exist that hospitals that care for hip fracture patients may be penalized in BPCI. The purpose of this study is to compare the episode-of-care (EOC) costs of hip fracture patients to elective THA patients.

METHODS

We reviewed a consecutive series of 4096 THA patients from 2015 to 2018. Patients were grouped into elective THA (n = 3686), fracture THA (n = 176), and hemiarthroplasty (n = 274). Using CMS claims data, we compared EOC costs, postacute care costs, and performance against the target price between the groups. To control for confounding variables, we performed a multivariate analysis to identify the effect of hip fracture diagnosis on costs.

RESULTS

Elective THA patients had lower EOC ($18,200 vs $42,605 vs $38,371; P < .001) and postacute care costs ($4477 vs $28,093 vs $23,217; P < .001) than both hemiarthroplasty and THA for fracture. Patients undergoing arthroplasty for fracture lost an average of $23,122 (vs $1648 profit for elective THA; P < .001) with 91% of cases exceeding the target price (vs 20% for elective THA; P < .001). In multivariate analysis, patients undergoing arthroplasty for fracture had higher EOC costs by $19,492 (P < .001).

CONCLUSION

Patients undergoing arthroplasty for fracture cost over twice as much as elective THA patients. CMS should change their methodology or exclude fracture patients from BPCI, particularly during the COVID-19 pandemic.

Geographic variation in the costs of medical care for people living with HIV in British Columbia, Canada

Background

Regional variation in medical care costs can indicate heterogeneity in clinical practice, inequities in access, or inefficiencies in service delivery. We aimed to estimate regional variation in medical costs for people living with HIV (PLHIV), adjusting for demographics and case-mix.

Methods

We conducted a retrospective cohort study using linked health administrative databases of PLHIV, from 2010 to 2014, in British Columbia (BC), Canada. Quarterly health care costs (2018 CAD) were derived from inpatient, outpatient, prescription drugs, antiretroviral therapy (ART), and HIV diagnostics. We used a two-part model with a logit link for the probability of incurring costs, and a log link and gamma distribution for observations with positive costs. We also estimated quarterly utilization rates for hospitalization-, physician billing- and prescription drug-days. Primary variables were indicators of individuals’ Health Service Delivery Area (HSDA). We adjusted cost and utilization estimates for demographic characteristics, HIV-disease progression, and comorbidities.

Results

Our cohort included 9577 PLHIV (median age 45.5 years, 80% male). Adjusted total quarterly costs for all 16 HSDAs were within 20% of the provincial mean, 8/16 for hospitalization costs, 16/16 for physician billing costs and 10/16 for prescription drug costs. Northern Interior and Northeast HSDAs had 38 and 44% lower quarterly non-ART prescription drug costs, and 2 and 5% higher quarterly inpatient costs, respectively.

Conclusions

We observed limited variation in medical care costs and utilization among PLHIV in BC. However, lower levels of outpatient care and higher levels of inpatient care indicate possible barriers to accessing care among PLHIV in the most rural regions of the province.

Electronic supplementary material

The online version of this article (10.1186/s12913-019-4391-8) contains supplementary material, which is available to authorized users.

Patient-Sharing Networks of Physicians and Health Care Utilization and Spending Among Medicare Beneficiaries

IMPORTANCE

Physicians are embedded in informal networks in which they share patients, information, and behaviors.

OBJECTIVE

We examined the association between physician network properties and health care spending, utilization, and quality of care among Medicare beneficiaries.

DESIGN, SETTING, AND PARTICIPANTS

In this cross-sectional study, we applied methods from social network analysis to Medicare administrative data from 2006 to 2010 for an average of 3 761 223 Medicare beneficiaries per year seen by 40 241 physicians practicing in 51 hospital referral regions (HRRs) to identify networks of physicians linked by shared patients. We improved on prior methods by restricting links to physicians who shared patients for distinct episodes of care, thereby excluding potentially spurious linkages between physicians treating common patients but for unrelated reasons. We also identified naturally occurring communities of more tightly linked physicians in each region. We examined the relationship between network properties measured in the prior year and outcomes in the subsequent year using regression models.

MAIN OUTCOMES AND MEASURES

Spending on total medical services, hospital, physician, and other services, use of services, and quality of care.

RESULTS

The mean patient age across the 5 years of study was 72.3 years and 58.5% of the participants were women. The mean age across communities of included physicians was 49 years and approximately 78% were men. Mean total annual spending per patient was $10 051. Total spending was higher for patients of physicians with more connections to other physicians ($1009 for a 1-standard deviation increase, P < .001) and more shared care outside of their community ($172, P < .001). Spending on inpatient care was slightly lower for patients of physicians whose communities had higher proportions of primary care physicians (-$38, P < .001). Patients cared for by physicians linked to more physicians also had more hospital admissions and days (0.02 and 0.18, respectively; both P < .001 for a 1-standard deviation increase in the number of connected physicians), more emergency visits (0.02, P < .001), more visits to specialists (0.37, P < .001), and more primary care visits (0.11, P < .001). Patients whose physicians' networks had more primary care physicians had more primary care visits (0.44, P < .001) and fewer specialist and emergency visits (-0.33 [P < .001] and -0.008 [P = .008], respectively). The various measures of quality were inconsistently related to the network measures.

CONCLUSIONS AND RELEVANCE

Characteristics of physicians' networks and the position of physicians in the network were associated with overall spending and utilization of services for Medicare beneficiaries.

Variation in the Cost of Managing Actinic Keratosis

Importance

Actinic keratosis (AK), a skin growth induced by ultraviolet light exposure, requires chronic management because a small proportion can progress into squamous cell skin cancer. Spending for AK management was more than $1 billion in 2004. Investigating geographic variation in AK spending presents an opportunity to decrease waste or recoup excess spending.

Objective

To evaluate geographic variation in health care cost for management of AKs and the association with patient-related and health-related factors.

Design, Setting, and Participants

This retrospective cohort study was performed using data from the MarketScan medical claims database of 488 324 continuously enrolled members with 2 or more claims for AK. Data from January 1, 2008, to December 31, 2012, was used.

Main Outcomes and Measures

Annual costs of care were calculated for outpatient visits, AK destruction, and medications for AKs, and the total of these components. Costs were adjusted for inflation to 2014 US dollars. To display cost variation, we calculated the ratio of mean cost in the highest quintile (Q5) relative to the mean in the lowest quintile (Q1), or the Q5:Q1 ratio; Q5:Q1 ratios were adjusted based on age, sex, history of nonmelanoma skin cancer, US geographic region, and population density (metropolitan statistical area).

Results

Overall, data from 488 324 continuously enrolled members (mean [SD] age, 53.1 [7.5] years; 243 662 women) with 2 or more claims for AK were included. Overall, patients had 1 085 985 claims related to AK, and dermatologists accounted for 71.0% of claims. The 2-year total cost was $111.5 million, with $52.4 million in 2011 and $59.1 million in 2012. The unadjusted Q5:Q1 ratios for total annual cost per patient ranged from 9.49 to 15.10. Adjusted ratios ranged from 1.72 to 1.80.

Conclusions and Relevance

There is variation in AK management cost within and between regions. This is not fully explained by differences in patient characteristics such as age, sex, or comorbidities. The annual cost for 10 common conditions from Medicare had lower Q5:Q1 ratios that ranged from 1.33 (joint degeneration of back/neck) to 1.69 (chronic sinusitis) when compared with 1.72 to 1.80 for AKs. This suggests an opportunity to investigate and improve the value of health care delivery in the management of AKs.

What Financial Incentives Will Be Created by Medicare Bundled Payments for Total Hip Arthroplasty?

BACKGROUND

Bundled payments are gaining popularity in arthroplasty as a tactic for encouraging providers and hospitals to work together to reduce costs. However, this payment model could potentially motivate providers to avoid unprofitable patients, limiting their access to care. Rigorous risk adjustment can prevent this adverse effect, but most current bundling models use limited, if any, risk-adjustment techniques. This study aims to identify and quantify the financial incentives that are likely to develop with total hip arthroplasty (THA) bundled payments that are not accompanied by comprehensive risk stratification.

METHODS

Financial data were collected for all Medicare-eligible patients (age 65+) undergoing primary unilateral THA at an academic center over a 2-year period (n = 553). Bundles were considered to include operative hospitalizations and unplanned readmissions. Multivariate regression was performed to assess the impact of clinical and demographic factors on the variable cost of THA episodes, including unplanned readmissions. (Variable costs reflect the financial incentives that will emerge under bundled payments).

RESULTS

Increased costs were associated with advanced age (P < .001), elevated body mass index (BMI; P = .005), surgery performed for hip fracture (P < .001), higher American Society of Anaesthesiologists (ASA) Physical Classification System grades (P < .001), and MCCs (Medicare modifier for major complications; P < .001). Regression coefficients were $155/y, $107/BMI point, $2775 for fracture cases, $2137/ASA grade, and $4892 for major complications. No association was found between costs and gender or race.

CONCLUSION

If generalizable, our results suggest that Centers for Medicare and Medicaid Services bundled payments encompassing acute inpatient care should be adjusted upward by the aforementioned amounts (regression coefficients above) for advanced age, increasing BMI, cases performed for fractures, elevated ASA grade, and major complications (as defined by Medicare MCC modifiers). Furthermore, these figures likely underestimate costs in many bundling models which incorporate larger proportions of postdischarge care. Failure to adjust for factors affecting costs may create barriers to care for specific patient populations.

Geographic and Age-Based Variations in Medicare Reimbursement Among ASSH Members

Background: The purpose of this study was to investigate how American Society for Surgery of the Hand (ASSH) members' Medicare reimbursement depends on their geographical location and number of years in practice. Methods: Demographic data for surgeons who were active members of the ASSH in 2012 were obtained using information publicly available through the US Centers for Medicare and Medicaid Services (CMS). "Hand-surgeons-per-capita" and average reimbursement per surgeon were calculated for each state. Regression analysis was performed to determine a relationship between (1) each state's average reimbursement versus the number of ASSH members in that state, (2) average reimbursement versus number of hand surgeons per capita, and (3) total reimbursement from Medicare versus number of years in practice. Analysis of variance (ANOVA) was used to detect a difference in reimbursement based on categorical range of years as an ASSH member. Results: A total of 1667 ASSH members satisfied inclusion in this study. Although there was significant variation among states' average reimbursement, reimbursement was not significantly correlated with the state's hand surgeons per capita or total number of hand surgeons in that given state. Correlation between years as an ASSH member and average reimbursement was significant but non-linear; the highest reimbursements were seen in surgeons who had been ASSH members from 8 to 20 years. Conclusions: Peak reimbursement from Medicare for ASSH members appears to be related to the time of surgeons' peak operative volume, rather than any age-based bias for or against treating Medicare beneficiaries. In addition, though geographic variation in reimbursement does exist, this does not appear to correlate with density or availability of hand surgeons.

Risk Adjustment for Medicare Total Knee Arthroplasty Bundled Payments

The use of bundled payments is growing because of their potential to align providers and hospitals on the goal of cost reduction. However, such gain sharing could incentivize providers to "cherry-pick" more profitable patients. Risk adjustment can prevent this unintended consequence, yet most bundling programs include minimal adjustment techniques. This study was conducted to determine how bundled payments for total knee arthroplasty (TKA) should be adjusted for risk. The authors collected financial data for all Medicare patients (age≥65 years) undergoing primary unilateral TKA at an academic center over a period of 2 years (n=941). Multivariate regression was performed to assess the effect of patient factors on the costs of acute inpatient care, including unplanned 30-day readmissions. This analysis mirrors a bundling model used in the Medicare Bundled Payments for Care Improvement initiative. Increased age, American Society of Anesthesiologists (ASA) class, and the presence of a Medicare Major Complications/Comorbid Conditions (MCC) modifier (typically representing major complications) were associated with increased costs (regression coefficients, $57 per year; $729 per ASA class beyond I; and $3122 for patients meeting MCC criteria; P=.003, P=.001, and P<.001, respectively). Differences in costs were not associated with body mass index, sex, or race. If the results are generalizable, Medicare bundled payments for TKA encompassing acute inpatient care should be adjusted upward by the stated amounts for older patients, those with elevated ASA class, and patients meeting MCC criteria. This is likely an underestimate for many bundling models, including the Comprehensive Care for Joint Replacement program, incorporating varying degrees of postacute care. Failure to adjust for factors that affect costs may create adverse incentives, creating barriers to care for certain patient populations. [Orthopedics. 2016; 39(5):e911-e916.].

Factors Contributing to Variations in Physicians' Use of Evidence at The Point of Care: A Conceptual Model

There is ample evidence that many clinical decisions made by physicians are inconsistent with current and generally accepted evidence. This leads to the underuse of some efficacious diagnostic, preventive or therapeutic services, and the overuse of others of marginal or no value to the patient. Evolving new payment and delivery models place greater emphasis on the provision of evidence-based services at the point of care. However, changing physician clinical behaviors is likely to be difficult and slow. Policy makers therefore need to design interventions that are most effective in promoting greater evidence-based care. To help identify modifiable factors that can influence clinical decisions at the point of care, we present a conceptual model and literature review of physician decision making. We describe the multitude of factors--drawn from different disciplines--that have been shown to influence physician point-of-care decisions. We present a conceptual framework for organizing these factors, dividing them into patient, physician, practice site, physician organization, network, market, and public policy influences. In doing so, we review some of the literature that speak to these factors. We then identify areas where additional research is especially needed, and discuss the challenges and opportunities for health services and policy researchers to gain a better understanding of these factors, particularly those that are potentially modifiable by policymakers and organizational leaders.