Drastic increase in hospital labor costs led to a sustained financial loss for an academic vascular surgery division during the coronavirus disease 2019 pandemic.

OBJECTIVE: The financial effects of the coronavirus disease 2019 (COVID-19) pandemic have fundamentally changed the healthcare environment, with hospitals expected to have lost billions in 2021. A preexisting nationwide nursing shortage became drastically worse during the pandemic amid dramatically increasing labor costs. We examined the evolution and financial effects of these changes during repeated pandemic surges within a vascular surgery division at a tertiary medical center. METHODS: Operating room, inpatient unit, and outpatient clinic financial data were examined retrospectively. The monthly averages for a 14-month control cohort before COVID-19 (January 2019 to February 2020) were compared to the averages for seven interval groups of sequential, 3-month cohorts from March 2020 through November 2021 (groups 1-7). RESULTS: The monthly relative value unit (RVU) generation had returned to the mean before the COVID-19 pandemic (2520 RVUs) after an isolated decrease early in the pandemic (group 1; 1734 RVUs). The RVUs ranged from 2540 to 2863 per month for groups 2 to 5, with a slight decline in groups 6 and 7. The average monthly RVUs in the COVID-19 period (2437 RVUs) were nearly equivalent (P = .93) to those for the pre-COVID-19 cohort. An analysis of payor mix demonstrated an increase in commercial and Medicaid payors, with a respective decrease in Medicare payors, during COVID-19. The contribution to indirect, or profit, from inpatient hospital and outpatient clinical revenue showed a drastic decrease in group 1, followed by a swift rebound when the government restrictions were eased (group 2). The total monthly vascular nursing unit expense demonstrated a marked increase with each sequential group during COVID-19, with an average monthly upsurge of +$82,171 (+47%; P < .001). An increase in the nursing labor expenses of +$884 per vascular case (from $1630 to $2514; +54%; P < .001) was observed in the COVID-19 era. The nursing labor costs per patient day had increased from $580 to $852 (+$272; +53%; P < .001). The nursing labor cost per RVU had increased from $69.5 to $107.7 (+$38.2; +55%; P < .001). On a system-wide level, the agency-related nursing costs had increased from $4.9 million to $13.6 million per month (+178%; P < .001) in 2021 compared with 2020. CONCLUSIONS: The COVID-19 pandemic has had severe, nationwide effects on healthcare delivery, exacerbating the deleterious effects of an existing, critical nursing shortage. To the best of our knowledge, the present study is the first detailed analysis of this phenomenon and its effects on a surgical division. Our results have demonstrated a progressive, drastic increase in nursing labor costs during the pandemic, with a resultant sustained erosion of financial margins despite a level of clinical productivity, as measured in RVUs, equal to the prepandemic standards. This precarious trend is not sustainable and will require increased, targeted government funding.

Financial viability of endovascular aortic repair in the modern era.

BACKGROUND: In the current era of cost containment, the financial impact of high-cost procedures such as endovascular aneurysm repair (EVAR) remains an area of intensive interest. Previous reports suggested slim to negative operating margins with EVAR, prompting widespread initiatives to reduce cost and to improve reimbursement. In 2015, the Centers for Medicare and Medicaid Services (CMS) announced the reclassification of EVAR to more specific diagnosis-related group (DRG) coding and predicted an overall increase in hospital reimbursement. The potential impact of this change has not been described. METHODS: Patients undergoing elective EVAR at a single institution between January 2014 and December 2018 were identified retrospectively, then stratified by date. Group 1 patients underwent EVAR before DRG change in 2015 and were classified with DRG 237/238, major cardiovascular procedure. Group 2 patients underwent EVAR after the change and were classified as DRG 268/269, aortic/heart assist procedures. The total direct cost included implant cost, operating room (OR) labor, room and board, and other supply costs. Net revenue reflected real payer mix values without extrapolation based on standard Medicare rates. Hospital profit was defined as the contribution to indirect (CTI), subtracting total direct cost from net revenue. RESULTS: A total of 188 encounters were included, 67 (36%) in group 1 and 121 (64%) in group 2. Medicare patients composed 84% of group 1 and 81% of group 2. CTI (profit) increased by $4447 (+123%) from $3615 in group 1 to $8062 in group 2. Net revenue per encounter increased by $2054 (+7.1%). In group 1, the higher reimbursement DRG code 237 was applied in 5 of 67 (7.5%) patients, whereas DRG code 268 was assigned in 19 of 121 (15.1%) patients in group 2. Total direct cost per encounter decreased by $2012 (-7.9%). This decrease in cost was driven by a reduction in implant cost, from a mean $16,914 per encounter in group 1 to a mean $15,655 in group 2 (-$1259 or -7.4% per encounter) and by a decrease in OR labor cost, $2838 in group 1 to $2361 in group 2 (-$477 or -17.0% per encounter). CONCLUSIONS: A significant improvement in hospital CTI was observed for elective EVAR during the course of the study. The increased DRG reimbursement after the Centers for Medicare and Medicaid Services coding changes in 2015 was a major driver of this salutary change. Notably, efforts to reduce implant and OR cost as well as to improve coding and documentation accuracy over time had an equally important impact on financial return.

Hospital reimbursement for carotid stenting and endarterectomy.

PURPOSE: To investigate the cost-effectiveness of carotid endarterectomy (CEA) vs. carotid artery stenting (CAS) in terms of hospital reimbursement. METHODS: A retrospective analysis was conducted of hospital reimbursement for patients undergoing CEA and CAS from 1 January 2008 through 30 September 2010 at a single tertiary referral institution. Hospital cost and reimbursement were assessed using patient-specific data gathered by the institution's cost accounting system. Professional fees were excluded. RESULTS: Hospital reimbursement data were extracted for a total of 301 cases (169 CEA and 132 CAS). Mean hospital reimbursement was 16% higher for CAS ($12,000±$7372) vs. CEA ($10,160±$6840, p=0.02). However, because of the significantly higher cost of materials necessary to perform CAS, the net revenue for the hospital was 29% greater in patients undergoing CEA ($3487) vs. CAS ($2603). The differences in hospital reimbursement and net revenue were consistent in asymptomatic (n=183), symptomatic (n=123), and urgent (n=36) subgroups. When focusing on cases by diagnosis-related group (DRG) codes vs. current procedural terminology (CPT) codes, the data shifted. Several patients were coded as an outpatient procedure (DRG 0): 28 (21%) of the 132 CAS patients and 7 (4%) of the 169 CEA patients, reducing their mean reimbursement to $4046 and $2513, respectively. If these patients were excluded, the mean hospital reimbursement differential widened between and CEA ($10,515) and CAS ($13,825). CONCLUSION: Hospital reimbursement for CAS is significantly higher than that for CEA. While both procedures created net positive income for the hospital, CEA was associated with a 29% higher net revenue due to the 40% cost premium of CAS when looking at all carotid procedures. However, proper DRG coding of CAS cases would have likely resulted in similar net revenue. Asymptomatic patients had the lowest cost and highest net revenue of all the subgroups. Per capita, significantly more healthcare resources were expended with CAS when compared to CEA. Given the lack of improved clinical outcome in most cases, CAS cannot be considered cost-effective for most patients.

Costs and cost-effectiveness of carotid stenting versus endarterectomy for patients at standard surgical risk: results from the Carotid Revascularization Endarterectomy Versus Stenting Trial (CREST).

BACKGROUND AND PURPOSE: The Carotid Revascularization Endarterectomy versus Stenting Trial (CREST) demonstrated similar rates of the primary composite end point between carotid artery stenting (CAS) and carotid endarterectomy (CEA), although the risk of stroke was higher with CAS, and the risk of myocardial infarction was higher with CEA. Given the large number of patients who are candidates for these procedures, an understanding of their relative cost and cost-effectiveness may have important implications for health care policy and treatment guidelines. METHODS: We performed a formal economic evaluation alongside the CREST trial. Costs were estimated from all trial participants over the first year of follow-up using a combination of resource use data and hospital billing data. Patient-level health use scores were obtained using data from the SF-36. We then used a Markov disease-simulation model calibrated to the CREST results to project 10-year costs and quality-adjusted life expectancy for the 2 treatment groups. RESULTS: Although initial procedural costs were $1025/patient higher with CAS, postprocedure costs and physician costs were lower such that total costs for the index hospitalization were similar for the CAS and CEA groups ($15 055 versus $14 816; mean difference, $239/patient; 95% CI for difference, -$297 to $775). Neither follow-up costs after discharge nor total 1-year costs differed significantly. For the CREST population, model-based projections over a 10-year time horizon demonstrated that CAS would result in a mean incremental cost of $524/patient and a reduction in quality-adjusted life expectancy of 0.008 years compared with CEA. Probabilistic sensitivity analysis demonstrated that CEA was economically attractive at an incremental cost-effectiveness threshold of $50 000/quality-adjusted life-year gained in 54% of samples, whereas CAS was economically attractive in 46%. CONCLUSIONS: Despite slightly lower in-trial costs and lower rates of stroke with CEA compared with CAS, projected 10-year outcomes from this controlled clinical trial demonstrate only trivial differences in overall healthcare costs and quality-adjusted life expectancy between the 2 strategies. If the CREST results can be replicated in clinical practice, these findings suggest that factors other than cost-effectiveness should be considered when deciding between treatment options for carotid artery stenosis in patients at standard risk for surgical complications. Clinical Trial Registration- URL: http://clinicaltrials.gov. Unique Identifier: NCT00004732.

Carotid endarterectomy is more cost-effective than carotid artery stenting.

OBJECTIVE: Cost-effectiveness has become an important end point in comparing therapies that may be considered to have clinical equipoise. While controversial, some feel that recent multicenter randomized controlled trials have codified clinical equipoise between carotid endarterectomy (CEA) and carotid artery stenting (CAS). METHODS: A retrospective analysis of hospital cost and 30-day clinical outcomes was performed on patients undergoing CEA and CAS between January 1, 2008 and September 30, 2010 at a single tertiary referral institution. Cost, not charges, of the index hospitalization was divided into supply, labor, facility, and miscellaneous categories. All costs were normalized to 2010 values. RESULTS: A total of 306 patients underwent either CEA (n = 174) or CAS (n = 132). Mean hospital cost for CAS was $9426 ± $5776 while CEA cost was $6734 ± $3935 (P < .0001). This cost differential was driven by the significantly higher direct supply costs for CAS ($5634) vs CEA ($1967) (P ≤ .0001). The higher costs for CAS were seen consistently in symptomatic, asymptomatic, elective, and urgent subgroups. Patients undergoing CAS who were enrolled in a trial or registry (53.8%) incurred significantly less cost ($7779 ± $3525) compared to those who were not ($11,279 ± $7114; P = .0004). Patients undergoing CEA trended toward a higher prevalence of being symptomatic (44.8%) compared to CAS (34.0%; P = .058). Age was not significantly different between patients undergoing CEA and CAS (70.2 vs 72.0, respectively; P = .36). Coronary artery disease was more common in patients undergoing CAS (60.3% vs 39%; P = .0001). The prevalence of chronic obstructive pulmonary disease, renal failure, hypertension, and diabetes was not significantly different between cohorts. Thirty-day combined stroke/death/myocardial infarction rate was 2.3% (4 of 174) in the CEA group and 3.8% (5 of 132) in the CAS group, P = .5. Overall length of stay (LOS) was 2.1 days in both groups (P = .9). LOS was higher for urgent interventions (7.3-7.5 days) and symptomatic status (2.9-3.5 days) when compared to patients treated electively (1.3-1.4 days). CONCLUSIONS: Treatment of carotid disease with CAS was 40% more costly than CEA and did not provide better clinical outcomes or a reduction in LOS. These trends were consistent in symptomatic, asymptomatic, urgent, and elective subgroups At present, CAS cannot be considered a cost-effective treatment for carotid disease.

Reimbursement of long-term postplacement costs after endovascular abdominal aortic aneurysm repair.

OBJECTIVE: Postplacement cost of surveillance and secondary procedures over 5 years increases the global cost of endovascular aortic aneurysm repair (EVAR) by nearly 50%. This study identified and assessed the reimbursement received for long-term postplacement costs after EVAR. METHODS: Between December 1995 and June 2007, 360 patients underwent EVAR at a single institution. The reimbursement collected from charges of postplacement surveillance and secondary procedures related to the aneurysmal disease was evaluated and compared against the actual costs. All amounts were converted to year 2007 dollars. To minimize costs associated with the early learning curve, the initial 50 EVAR patients between December 1995 and 1998 were excluded. Patients with <1 year follow-up were also excluded. Data are expressed as mean +/- standard error. RESULTS: The mean follow up after EVAR for 152 patients was 38.8 +/- 1.8 months. Medicare, capitated insurance, and commercial insurance provided coverage for 85 (56.0%), 49 (32.2%), and 18 (11.8%) patients, respectively. The cumulative 5-year postplacement reimbursement received per patient was $9792 meeting 81.4% of the cumulative cost of $12,027 for a net loss of $2235 per patient. Although 123 (80.9%) patients without secondary procedures generated a 5-year cumulative gain of $1830 per patient, 29 (19.1%) patients with secondary procedures averaged a 5-year cumulative loss of $9378 per patient. The average reimbursement rate over the 5-year period was 35.8% +/- 0.6%, with the lowest reimbursement rate seen in patients with Medicare at 31.6% +/- 0.7%. CONCLUSION: Current reimbursement is not sufficient to meet the costs associated with long-term surveillance and needed secondary procedures after EVAR. Inadequate reimbursement of costs associated with secondary procedures was the primary driver for the net institutional loss. Reimbursement for outpatient radiological procedures generated a modest surplus.

Long-term postplacement cost comparison of AneuRx and Zenith endografts.

Long-term postplacement costs increase the global cost of endovascular aneurysm repair (EVAR) by 44%. Secondary procedures and endoleaks significantly increase long-term expense. This study evaluates device-specific long-term postplacement costs using two different endografts. AneuRx and Zenith endografts were used to treat 250 patients with abdominal aortic aneurysms between December 1998 and June 2006 at a single institution. A relative value unit-based hospital cost accounting system was used to calculate both direct and indirect hospital departmental costs. Institutional overhead expenses, costs of professional services, and outpatient visits were also included in cost determinations. All costs were valued in 2006 dollars. To examine long-term costs, patients with <1 year follow-up were excluded. The initial 50 EVAR patients between December 1995 and 1998 were also excluded, to limit the effect of the learning curve on postplacement cost. The cumulative 5-year postplacement costs per patient were $12,465 (AneuRx) and $10,606 (Zenith, p = 0.22). Mean durations of follow-up were 38.5 +/- 5.2 months (AneuRx) and 32.8 +/- 3.8 months (Zenith, p = 0.12). For both devices, the largest cost components were secondary procedures (59.5% AneuRx vs. 56.4% Zenith) and radiologic studies (29.2% AneuRx vs. 34.9% Zenith). Freedom from secondary procedures (80% vs. 51%, p < 0.05) and endoleaks (83% vs. 58%, p = 0.05) was higher in patients treated with Zenith vs. AneuRx endografts, respectively. There was a reduction in secondary procedures and endoleaks in patients treated with Zenith compared to AneuRx. The corresponding 15% reduction in cost, however, was not statistically significant. Additional device-related cost reductions may be possible through improvements in device and technique and alterations in surveillance imaging.

Long-term postplacement cost after endovascular aneurysm repair.

BACKGROUND: Previous studies have demonstrated that the initial hospital cost associated with endovascular aneurysm repair (EVAR) is approximately $20,000. However, the cost of long-term surveillance and secondary procedures is poorly characterized. METHODS: Between December 1998 and June 2006, 259 patients underwent EVAR for infrarenal aneurysms at a single institution. Follow-up costs were calculated using a relative value unit based hospital cost accounting system, which incorporates departmental direct and indirect costs. Institutional overhead costs were included using a conversion factor. Costs for professional services were determined by a cost-to-charge ratio, and outpatient visits were calculated with a time-based formula. Year 2006 costs were applied to prior years. To minimize costs associated with the early learning curve, the initial 50 EVAR patients between December 1995 and 1998 were excluded. Patients with <1 year follow-up were also excluded. Data are expressed as mean +/- standard error. RESULTS: The mean follow-up after EVAR for 136 patients was 34.7 +/- 1.8 months. The cumulative 5-year postplacement cost per patient was $11,351. The 27 patients (19.9%) who required secondary procedures had a 5-year cumulative cost of $31,696 compared with $3668 for 109 patients without secondary procedures (8.6-fold increase, P < .05). The 5-year cost for patients with endoleak was $26,739 compared with $5706 for those without endoleak (4.7-fold increase, P < .05). Overall, major cost components were 57.4% for secondary procedures and 32.5% for radiologic studies. CONCLUSIONS: During a 5-year period, the postplacement cost of EVAR increases the global cost by 44%. The subgroups of patients with endoleaks and those requiring secondary procedures generate a disproportionate share of postplacement costs. Efforts at minimizing cost should emphasize technical and device modifications aimed at reducing endoleaks and the need for secondary procedures.

Importance of access to fixed-imaging fluoroscopy: practice implications for the vascular surgeon.

PURPOSE: To examine the impact of unfettered access to high quality fixed-imaging fluoroscopy in a vascular surgery practice. METHODS: The case mix of 2 vascular surgeons was retrospectively examined for a 12-month period before (period A) and after (period B) routine access to fixed-imaging equipment was established. Operative and endovascular cases were identified by their CPT codes. Trends in procedure frequency and gross charges were assessed. RESULTS: Endovascular code usage increased 174% (p<0.001) following routine access to fixed imaging equipment. There was an overall 2.3-fold increase in angioplasty across all vascular beds (p<0.001), as well as a 2.1-fold increase in stent utilization (p<0.001). More complex diagnostic and interventional procedures were performed, as evidenced by a large increase in third-order catheterizations (p<0.001). Open surgical therapy decreased overall by 11.4% (p=0.051) in period B. Reductions in open surgery for peripheral arterial occlusive disease were most pronounced, decreasing 35.6% (p<0.001). Overall gross charges increased 6% in group B. Endovascular procedures accounted for 36.6% of gross charges in period B, doubling its contributions from period A (17.1%, p=0.01). Open major vascular case contributions to gross charges fell from 54.4% to 36.2%. CONCLUSIONS: A significant shift in case mix was observed after routine access to fixed imaging equipment was established, with a dramatic increase seen in percutaneous endovascular case volume and complexity. Corresponding contributions to gross charges for endovascular procedures became equivalent to that of all open major vascular cases combined. Routine access to fixed imaging fluoroscopy appeared to be the chronological fulcrum on which the balance of endovascular and open vascular cases has shifted, allowing the development of a fully integrated vascular and endovascular practice.

A decade of decline: an analysis of Medicare reimbursement for vascular surgical procedures.

Despite inflation and a robust economy, standard Medicare reimbursements for vascular surgical procedures have progressively declined. The objective of this analysis was to quantitatively and objectively evaluate the decline of vascular surgical reimbursement over the past decade. In this study, data for the analysis of specific vascular surgical procedures was obtained from the National Center for Health Statistics-National Hospital Discharge Survey (NCHS-NHDS) for all vascular procedures as reported by ICD-9-CM codes. The average Medicare reimbursement for each of the specified procedures for 1990 was compared to that of 2001 and the percent change in average reimbursement over this period was calculated. Comparisons between 1990 and 2001 dollar amounts were made after correction for inflation using the consumer price index. This correction factor allows for the calculation of the actual percentage reduction in "real dollars" that is reflected in buying power. We found significant decreases in Medicare reimbursement for each of the vascular procedures included in this analysis. Despite national economic prosperity, there was an average 41% decrease in the buying power per case for vascular surgical procedures over the past decade. We feel that these reductions in reimbursement are overzealous and need to be reexamined.