Variation in Medicare Expenditures to Treat Surgical Complications

November 6, 2016
Priyam Vora
Priyam Vora

Treating surgical complications with the best quality care while minimizing costs remains a major challenge for hospitals. Especially when dealing with perioperative complications, hospitals have no unanimous standards for cost and care.

Treating surgical complications with the best quality care while minimizing costs remains a major challenge for hospitals. Especially when dealing with perioperative complications, hospitals have no unanimous standards for cost and care.

A new study in JAMA Surgery revealed a great amount of variation across hospitals in Medicare payments for patients rescued from surgical complications. Medicare payments for patients rescued at the highest-cost hospitals were 2- to 3-fold higher than the lowest-cost hospitals. Another revelation was that the hospitals with the highest costs for such care were also the ones where patients suffered the most complications in the first place.

Perioperative refers to the 3 phases of surgery: preoperative, intraoperative, and postoperative. Complications can arise in any of these 3 stages, leading to higher treatment costs and even death. The costs of rescuing patients from perioperative complications were poorly characterized until now.

Jason C. Pradarelli, MD, MS, and colleagues studied surgical Medicare patients across high-cost and low-cost hospitals to understand the differences in the cost of care. They analyzed Medicare claims of more than 576,000 people between ages 65 and 100. The payment components of the 4 most common operations from 2009 to 2012 were included: abdominal aortic aneurysm repair, colectomy for cancer, pulmonary surgery, and hip replacement. The average payments for patients who survived after surgical complications were compared across hospitals.

Higher Medicare Payments

In general, patients who survived the surgical complications faced higher Medicare payments than the patients who died for all 4 operation types. More specifically, Medicare payments for patients rescued at the highest-cost hospitals were 2- to 3-fold higher than the lowest-cost hospitals:

  • aortic aneurysm repair ($60,456 vs $23,261);
  • colectomy ($56,787 vs $22,853);
  • pulmonary surgery ($63,117 vs $21,325) and
  • hip replacement ($41,354 vs $19,028)

Moreover, these higher payments were not linked with improved clinical performance. In fact, the hospitals with the highest costs for such care were also the ones where patients suffered the most complications in the first place.

Rescue Comes at a Price

After a major surgery, problems can arise anytime, even weeks after the patient has left the operating table. These complications require intensive care in and beyond the hospital setting.

“We can see substantial variation in care, and cost, after a major complication occurs, even when we account for the type of complication and other factors,” Pradarelli, the lead author of the study, said in a statement. “This represents a real opportunity for hospitals to be more efficient in how they prevent and manage complications, for how Medicare incentivizes better care at lower costs.”

The vast variation in prices across hospitals to treat post-surgical complications presents a great opportunity for hospitals to improve cost efficiency.

“This study provides evidence for cost-efficiency while effectively treating patients with perioperative complications,” the authors wrote. “Emerging payment policies that incentivize high-quality care at lower costs may lead to previously unforeseen benefits even when applied to surgical patients who experience costly complications.”