Interhospital competition and hospital charges and costs for patients undergoing cranial neurosurgery.

OBJECTIVE: Research has documented significant growth in neurosurgical expenditures and practice consolidation. The authors evaluated the relationship between interhospital competition and inpatient charges or costs in patients undergoing cranial neurosurgery. METHODS: The authors identified all admissions in 2006 and 2009 from the National Inpatient Sample. Admissions were classified into 5 subspecialties: cerebrovascular, tumor, CSF diversion, neurotrauma, or functional. Hospital-specific interhospital competition levels were quantified using the Herfindahl-Hirschman Index (HHI), an economic metric ranging continuously from 0 (significant competition) to 1 (monopoly). Inpatient charges (hospital billing) were multiplied with reported cost-to-charge ratios to calculate costs (actual resource use). Multivariate regressions were used to assess the association between HHI and inpatient charges or costs separately, controlling for 17 patient, hospital, severity, and economic factors. The reported ß-coefficients reflect percentage changes in charges or costs (e.g., ß-coefficient = 1.06 denotes a +6% change). All results correspond to a standardized -0.1 change in HHI (increase in competition). RESULTS: In total, 472,938 nationwide admissions for cranial neurosurgery treated at 896 unique hospitals met inclusion criteria. Hospital HHIs ranged from 0.099 to 0.724 (mean 0.298 ± 0.105). Hospitals in more competitive markets had greater charge/cost markups (ß-coefficient = 1.10, p < 0.001) and area wage indices (ß-coefficient = 1.04, p < 0.001). Between 2006 and 2009, average neurosurgical charges and costs rose significantly ($62,098 to $77,812, p < 0.001; $21,385 to $22,389, p < 0.001, respectively). Increased interhospital competition was associated with greater charges for all admissions (ß-coefficient = 1.07, p < 0.001) as well as cerebrovascular (ß-coefficient = 1.08, p < 0.001), tumor (ß-coefficient = 1.05, p = 0.039), CSF diversion (ß-coefficient = 1.08, p < 0.001), neurotrauma (ß-coefficient = 1.07, p < 0.001), and functional neurosurgery (ß-coefficient = 1.11, p = 0.037) admissions. However, no significant associations were observed between HHI and costs, except for CSF diversion surgery (ß-coefficient = 1.03, p = 0.021). Increased competition was not associated with important clinical outcomes, such as inpatient mortality, favorable discharge disposition, or complication rates, except for lower mortality for brain tumors (OR 0.78, p = 0.026), but was related to greater length of stay for all admissions (ß-coefficient = 1.06, p < 0.001). For a sensitivity analysis adjusting for outcomes, all findings for charges and costs remained the same. CONCLUSIONS: Hospitals in more competitive markets exhibited higher charges for admissions of patients undergoing an in-hospital cranial procedure. Despite this, interhospital competition was not associated with increased inpatient costs except for CSF diversion surgery. There was no corresponding improvement in outcomes with increased competition, with the exception of a potential survival benefit for brain tumor surgery.

"Strokenomics": bending the cost curve in stroke care.

OBJECTIVE: The mortality rates for stroke are decreasing, yet it remains a leading cause of disability and the principal neurological diagnosis in patients discharged to nursing homes. The societal and economic burdens of stroke are substantial, with the total annual health care costs of stroke expected to reach $240.7 billion by 2030. Mechanical thrombectomy has been shown to improve functional outcomes compared to medical therapy alone. Despite an incremental cost of $10,840 compared to medical therapy, the improvement in functional outcomes and decreased disability have contributed to the cost-effectiveness of the procedure. In this study the authors describe a physician-led device bundle purchase program implemented for the delivery of stroke care. METHODS: The authors retrospectively reviewed the clinical and radiographic data and device-associated charges of 45 consecutive patients in whom a virtual "stroke bundle" model was used to purchase mechanical thrombectomy devices. RESULTS: Use of the stroke bundle to purchase mechanical thrombectomy devices resulted in an average savings per case of $2900.93. Compared to the traditional model of charging for devices à la carte, this represented an average savings of 25.2% per case. The total amount of savings for these initial 45 cases was $130,542.00. Thrombolysis in Cerebral Infarction scale grade 2b or 3 recanalization occurred in 38 patients (84.4%) using these devices. CONCLUSIONS: Purchasing devices through a bundled model resulted in substantial cost savings while maintaining the therapeutic efficacy of the procedure, further pushing the already beneficial long-term cost-benefit curve in favor of thrombectomy.

Trends in Medicare reimbursement for neurosurgical procedures: 2000 to 2018.

OBJECTIVE: There is currently a paucity of literature evaluating procedural reimbursements and financial trends in neurosurgery. A comprehensive understanding of the economic trends and financial health of neurosurgery is important to ensure the sustained success and growth of the specialty moving forward. The purpose of this study was to evaluate monetary trends of the 10 most common spinal and cranial neurosurgical procedures in Medicare reimbursement rates from 2000 to 2018. METHODS: The Physician Fee Schedule Look-Up Tool from the Centers for Medicare & Medicaid Services was queried for each of the top 10 most utilized Current Procedural Terminology codes in both spinal and cranial neurosurgery, and comprehensive reimbursement data were extracted. The raw percent change in Medicare reimbursement rate from 2000 to 2018 was calculated for each procedure and averaged. This was then compared to the percent change in consumer price index over the same time. Using data adjusted for inflation, trend analysis was performed for all included procedures. Adjusted R-squared and both the average annual and the total percent change in reimbursement were calculated based on these adjusted trends for all included procedures. Likewise, the compound annual growth rate was calculated for all procedures. RESULTS: When all reimbursement data were adjusted for inflation, the average reimbursement for all procedures decreased by an average of 25.80% from 2000 to 2018. From 2000 to 2018, the adjusted reimbursement rate for all included procedures decreased by an average of 1.59% each year and experienced an average compound annual growth rate of -1.66%, indicating a steady annual decline in reimbursement when adjusted for inflation. CONCLUSIONS: This is the first study to evaluate comprehensive trends in Medicare reimbursement in neurosurgery. When adjusted for inflation, Medicare reimbursement for all included procedures has steadily decreased from 2000 to 2018, with similar rates of decline observed between cranial and spinal neurosurgery procedures. Increased awareness and consideration of these trends will be important moving forward for policy makers, hospitals, and neurosurgeons as continued progress is made to advance agreeable reimbursement models that allow for the sustained growth of neurosurgery in the United States.

Variation in payments for spine surgery episodes of care: implications for episode-based bundled payment.

OBJECTIVE Spine surgery is expensive and marked by high variation across regions and providers. Bundled payments have potential to reduce unwarranted spending associated with spine surgery. This study is a cross-sectional analysis of commercial and Medicare claims data from January 2012 through March 2015 in the state of Michigan. The objective was to quantify variation in payments for spine surgery in adult patients, document sources of variation, and determine influence of patient-level, surgeon-level, and hospital-level factors. METHODS Hierarchical regression models were used to analyze contributions of patient-level covariates and influence of individual surgeons and hospitals. The primary outcome was price-standardized 90-day episode payments. Intraclass correlation coefficients-measures of variability accounted for by each level of a hierarchical model-were used to quantify sources of spending variation. RESULTS The authors analyzed 17,436 spine surgery episodes performed by 195 surgeons at 50 hospitals. Mean price-standardized 90-day episode payments in the highest spending quintile exceeded mean payments for episodes in the lowest cost quintile by $42,953 (p < 0.001). Facility payments for index admission and post-discharge payments were the greatest contributors to overall variation: 39.4% and 32.5%, respectively. After accounting for patient-level covariates, the remaining hospital-level and surgeon-level effects accounted for 2.0% (95% CI 1.1%-3.8%) and 4.0% (95% CI 2.9%-5.6%) of total variation, respectively. CONCLUSIONS Significant variation exists in total episode payments for spine surgery, driven mostly by variation in post-discharge and facility payments. Hospital and surgeon effects account for relatively little of the observed variation.

Bundled payment reimbursement for anterior and posterior approaches for cervical spondylotic myelopathy: an analysis of private payer and Medicare databases.

OBJECTIVE Cervical spondylotic myelopathy (CSM) is a progressive spinal condition that often requires surgery. Studies have shown the clinical equivalency of anterior versus posterior approaches for CSM surgery. The purpose of this study was to determine the amount and type of resources used for anterior and posterior surgical treatment of CSM by using large national databases of clinical and financial information from patients. METHODS This study consists of 2 large cohorts of patients who underwent either an anterior or posterior approach for treatment of CSM. These patients were selected from the Medicare 5% National Sample Administrative Database (SAF5) and the Humana orthopedic database (HORTHO), which is a database of patients with private payer health insurance. The outcome measures were the cost of a 90-day episode of care, as well as a breakdown of the cost components for each surgical procedure between 2005 and 2014. RESULTS A total of 16,444 patients were included in this analysis. In HORTHO, there were 10,332 and 1556 patients treated with an anterior or posterior approach for CSM, respectively. In SAF5, there were 3851 and 705 patients who were treated by an anterior or posterior approach for CSM, respectively. The mean ± SD reimbursements for anterior and posterior approaches in the HORTHO database were $20,863 ± $2014 and $23,813 ± $4258, respectively (p = 0.048). The mean ± SD reimbursements for anterior and posterior approaches in the SAF5 database were $18,219 ± $1053 and $25,598 ± $1686, respectively (p < 0.0001). There were also significantly higher reimbursements for a rehabilitation/skilled nursing facility and hospital/inpatient care for patients who underwent a posterior approach in both the private payer and Medicare databases. In all cohorts in this study, the hospital-related reimbursement was more than double the surgeon-related reimbursement. CONCLUSIONS This study provides resource utilization information for a 90-day episode of care for both anterior and posterior approaches for CSM surgery. There is a statistically significant higher resource utilization for patients undergoing the posterior approach for CSM, which is consistent with the literature. Understanding the reimbursement patterns for anterior versus posterior approaches for CSM will help providers design a bundled payment for patients requiring surgery for CSM, and this study suggests that a subset of patients who require the posterior approach for treatment also require greater resources. The data also suggest that hospital-related reimbursement is the major driver of payments.

Impact of case type, length of stay, institution type, and comorbidities on Medicare diagnosis-related group reimbursement for adult spinal deformity surgery.

OBJECTIVE The aim of this study was to educate medical professionals about potential financial impacts of improper diagnosis-related group (DRG) coding in adult spinal deformity (ASD) surgery. METHODS Medicare's Inpatient Prospective Payment System PC Pricer database was used to collect 2015 reimbursement data for ASD procedures from 12 hospitals. Case type, hospital type/location, number of operative levels, proper coding, length of stay, and complications/comorbidities (CCs) were analyzed for effects on reimbursement. DRGs were used to categorize cases into 3 types: 1) anterior or posterior only fusion, 2) anterior fusion with posterior percutaneous fixation with no dorsal fusion, and 3) combined anterior and posterior fixation and fusion. RESULTS Pooling institutions, cases were reimbursed the same for single-level and multilevel ASD surgery. Longer stay, from 3 to 8 days, resulted in an additional $1400 per stay. Posterior fusion was an additional $6588, while CCs increased reimbursement by approximately $13,000. Academic institutions received higher reimbursement than private institutions, i.e., approximately $14,000 (Case Types 1 and 2) and approximately $16,000 (Case Type 3). Urban institutions received higher reimbursement than suburban institutions, i.e., approximately $3000 (Case Types 1 and 2) and approximately $3500 (Case Type 3). Longer stay, from 3 to 8 days, increased reimbursement between $208 and $494 for private institutions and between $1397 and $1879 for academic institutions per stay. CONCLUSIONS Reimbursement is based on many factors not controlled by surgeons or hospitals, but proper DRG coding can significantly impact the financial health of hospitals and availability of quality patient care.

Guideline update for the performance of fusion procedures for degenerative disease of the lumbar spine. Part 3: assessment of economic outcome.

A comprehensive economic analysis generally involves the calculation of indirect and direct health costs from a societal perspective as opposed to simply reporting costs from a hospital or payer perspective. Hospital charges for a surgical procedure must be converted to cost data when performing a cost-effectiveness analysis. Once cost data has been calculated, quality-adjusted life year data from a surgical treatment are calculated by using a preference-based health-related quality-of-life instrument such as the EQ-5D. A recent cost-utility analysis from a single study has demonstrated the long-term (over an 8-year time period) benefits of circumferential fusions over stand-alone posterolateral fusions. In addition, economic analysis from a single study has found that lumbar fusion for selected patients with low-back pain can be recommended from an economic perspective. Recent economic analysis, from a single study, finds that femoral ring allograft might be more cost-effective compared with a specific titanium cage when performing an anterior lumbar interbody fusion plus posterolateral fusion.

Cost-effectiveness of lumbar discectomy and single-level fusion for spondylolisthesis: experience with the NeuroPoint-SD registry.

OBJECT: There is significant practice variation and uncertainty as to the value of surgical treatments for lumbar spine disorders. The authors' aim was to establish a multicenter registry to assess the efficacy and costs of common lumbar spinal procedures by using prospectively collected outcomes. METHODS: An observational prospective cohort study was completed at 13 academic and community sites. Patients undergoing single-level fusion for spondylolisthesis or single-level lumbar discectomy were included. The 36-Item Short Form Health Survey (SF-36) and Oswestry Disability Index (ODI) data were obtained preoperatively and at 1, 3, 6, and 12 months postoperatively. Power analysis estimated a sample size of 160 patients: lumbar disc (125 patients) and lumbar listhesis (35 patients). The quality-adjusted life year (QALY) data were calculated using 6-dimension utility index scores. Direct costs and complication costs were estimated using Medicare reimbursement values from 2011, and indirect costs were estimated using the human capital approach with the 2011 US national wage index. Total costs equaled $14,980 for lumbar discectomy and $43,852 for surgery for lumbar spondylolisthesis. RESULTS: There were 198 patients enrolled over 1 year. The mean age was 46 years (49% female) for lumbar discectomy (n = 148) and 58.1 years (60% female) for lumbar spondylolisthesis (n = 50). Ten patients with disc herniation (6.8%) and 1 with listhesis (2%) required repeat operation at 1 year. The overall 1-year follow-up rate was 88%. At 30 days, both lumbar discectomy and single-level fusion procedures were associated with significant improvements in ODI, visual analog scale, and SF-36 scores (p = 0.0002), which persisted at the 1-year evaluation (p < 0.0001). By 1 year, more than 80% of patients in each cohort who were working preoperatively had returned to work. Lumbar discectomy was associated with a gain of 0.225 QALYs over the 1-year study period ($66,578/QALY gained). Lumbar spinal fusion for Grade I listhesis was associated with a gain of 0.195 QALYs over the 1-year study period ($224,420/QALY gained). CONCLUSIONS: This national spine registry demonstrated successful collection of high-quality outcomes data for spinal procedures in actual practice. These data are useful for demonstrating return to work and cost-effectiveness following surgical treatment of single-level lumbar disc herniation or spondylolisthesis. One-year cost per QALY was obtained, and this cost per QALY is expected to improve further by 2 years. This work sets the stage for real-world analysis of the value of health interventions.