The determinants of nonprofit hospital CEO compensation.

Hospital CEO salaries have grown quickly over the past two decades. We investigate correlates of rising nonprofit hospital CEO pay between 2012 and 2019 by merging compensation data from Candid's IRS 990 forms with hospital data from the National Academy for State Health Policy Hospital Cost Tool. Almost half of the measured increase in CEO compensation (44.5%) accrued to a "base case" CEO, who was leading a non-teaching hospital system or independent hospital with fewer than 100 beds that earned 0 profits and provided no charity care. Another 28.5% of the measured salary increase resulted from changes in the generosity with which observable metrics were rewarded, particularly the reward for heading a system with 500 or more beds. The remaining 27% resulted mostly from hospital systems or single hospitals that increased their profits or bed size over time. The increase in CEO compensation associated with leading larger healthcare systems and earning greater profits may explain the increase in healthcare system consolidation which has occurred over the last several years.

Can postoperative process of care utilization or complication rates explain the volume-cost relationship for cancer surgery?

BACKGROUND: Past studies identify an association between provider volume and outcomes, but less is known about the volume-cost relationship for cancer surgery. We analyze the volume-cost relationship for 6 cancer operations and explore whether it is influenced by the occurrence of complications and/or utilization of processes of care. METHODS: Medicare hospital and inpatient claims for the years 2005 through 2009 were analyzed for 6 cancer resections: colectomy, rectal resection, pulmonary lobectomy, pneumonectomy, esophagectomy, and pancreatic resection. Regressions were first estimated to quantify the association of provider volume with costs, excluding measures of complications and processes of care as explanatory variables. Next, these variables were added to the regressions to test whether they weakened any previously observed volume-cost relationship. RESULTS: Higher hospital volume is associated with lower patient costs for esophagectomy but not for other operations. Higher surgeon volume reduces costs for most procedures, but this result weakens when processes of care are added to the regressions. Processes of care that are frequently implemented in response to adverse events are associated with 14% to 34% higher costs. Utilization of these processes is more prevalent among low-volume versus high-volume surgeons. CONCLUSION: Processes of care implemented when complications occur explain much of the surgeon volume-cost relationship. Given that surgeon volume is readily observed, better outcomes and lower costs may be achieved by referring patients to high-volume surgeons. Increasing patient access to surgeons with lower rates of complications may be the most effective strategy for avoiding costly processes of care, controlling expenditure growth.

Impact of processes of care aimed at complication reduction on the cost of complex cancer surgery.

BACKGROUND AND OBJECTIVES: Health care providers add multiple processes to the care of complex cancer patients, believing they prevent and/or ameliorate complications. However, the relationship between these processes, complication remediation, and expenditures is unknown. METHODS: Data for patients with cancer diagnoses undergoing colectomy, rectal resection, pulmonary lobectomy, pneumonectomy, esophagectomy, and pancreatic resection were obtained from hospital and inpatient physician Medicare claims for the years 2005-2009. Risk-adjusted regression analyses measured the association between hospitalization costs and processes presumed to prevent and/or remedy complications common to high-risk procedures. RESULTS: After controlling for comorbidities, analysis identified associations between increased costs and use of multiple processes, including arterial lines (4-12% higher; P < 0.001) and pulmonary artery catheters (23-33% higher; P < 0.001). Epidural analgesia was not associated with higher costs. Consultations were associated with 24-44% (P < 0.001) higher costs, and total parenteral nutrition was associated with 13-31% higher costs (P < 0.001). CONCLUSIONS: Many frequently utilized processes and services presumed to avoid and/or ameliorate complications are associated with increased surgical oncology costs. This suggests that the patient-centered value of each process should be measured on a procedure-specific basis. Likewise, further attention should be focused on defining the efficacy of each of these costly, but frequently unproven, additions to perioperative care.

The influence of complications on the costs of complex cancer surgery.

BACKGROUND: It is widely known that outcomes after cancer surgery vary widely, depending on interactions between patient, tumor, neoadjuvant therapy, and provider factors. Within this complex milieu, the influence of complications on the cost of surgical oncology care remains unknown. The authors examined rates of Patient Safety Indicator (PSI) occurrence for 6 cancer operations and their association with costs of care. METHODS: The Agency for Healthcare Research and Quality (AHRQ) PSI definitions were used to identify patient safety-related complications in Medicare claims data. Hospital and inpatient physician claims for the years 2005 through 2009 were analyzed for 6 cancer resections: colectomy, rectal resection, pulmonary lobectomy, pneumonectomy, esophagectomy, and pancreatic resection. Risk-adjusted regression analyses were used to measure the association between each PSI and hospitalization costs. RESULTS: Overall PSI rates ranged from a low of 0.01% for postoperative hip fracture to a high of 2.58% for respiratory failure. Death among inpatients with serious treatable complications, postoperative respiratory failure, postoperative thromboembolism, and accidental puncture/laceration were >1% for all 6 cancer operations. Several PSIs-including decubitus ulcer, death among surgical inpatients with serious treatable complications, and postoperative thromboembolism-raised hospitalization costs by ≥20% for most cancer surgery types. Postoperative respiratory failure resulted in a cost increase >50% for all cancer resections. CONCLUSIONS: The consistently higher costs associated with cancer surgery PSIs indicate that substantial health care savings could be achieved by targeting these indicators for quality improvement.

Can Centralization of Cancer Surgery Improve Social Welfare?

The empirical association between high hospital procedure volume and lower mortality rates has led to recommendations for the centralization of complex surgical procedures. Yet redirecting patients to a select number of high-volume hospitals creates potential negative consequences for market competition. We use patient-level data to estimate the association between hospital procedure volume and patient mortality and costs. We also estimate the association between hospital market concentration and mortality, cost, and prices. We use our estimates to simulate the change in social welfare resulting from redirecting patients at low-volume hospitals to high-volume facilities. We find that a higher procedure volume leads to significant reductions in mortality for patients undergoing surgery for pancreatic cancer, but not colon cancer. Procedure volume also influences costs for both surgeries, but in a nonlinear fashion. Increased market concentration is associated with higher costs and prices for colon cancer, but not pancreatic cancer patients. Simulations indicated that centralizing pancreatic cancer surgery is unambiguously welfare enhancing. In contrast, there is less evidence to suggest that centralizing colon cancer surgery would be welfare improving.

Certificate of need regulations and the availability and use of cancer resections.

BACKGROUND: Several states use certificate of need regulations (CON) to control the growth of acute-care services, but the possible association between these restrictions and the provision of cancer surgery has not been assessed. This study examines the association between acute-care CON, the availability of cancer surgery hospitals, and provision of six cancer operations. METHODS: Medicare data were collected for beneficiaries treated with one of six cancer resections and an associated cancer diagnosis from 1989 to 2002. Hospital, procedure, and incidence rates for each cancer diagnosis were stratified by state and year. The number of hospitals performing each operation per cancer incident, the number of procedures performed per cancer incident, and hospital volume were compared between states with and without CON, and those that discontinued CON during the sample period were noted. RESULTS: The number of hospitals per cancer incident was lower in CON states versus non-CON states for colectomy (P = .022), rectal resection (P = .026), and pulmonary lobectomy (P = .032). Hospital volume was significantly higher in CON states versus non-CON states for colectomy (P = .006) and pulmonary lobectomy (P = .043). There were no differences between states with and without CON in the number of procedures per cancer incident. CONCLUSION: Although use of cancer procedures was similar in CON and non-CON states, those with acute-care CON had fewer facilities performing oncologic resections per cancer patient. Correspondingly, average hospital procedure volume tended to be higher in CON states. These differences may have important implications for patient outcomes and costs.