Spinal surgery: Variations in healthcare costs and implications for episode-based bundled payments
Study Design. Retrospective, observational.Objective. To simulate what episodes-of-care in spinal surgery might look like in a bundled payment system and to evaluate the associated costs and characteristics.Summary of Background Data. Episode-based payment bundling has received considerable attention as a potential method to help curb the rise in healthcare spending and is being investigated as a new payment model as part of the Affordable Care Act. While earlier studies investigated bundled payments in a number of surgical settings, very few focused on spine surgery specifically.Methods. We analyzed data from MarketScan. Patients were included in the study if they underwent cervical or lumbar spinal surgery in 2000-2009, had at least 2 years pre-operative and 90 days post-operative follow-up data. Patients were grouped based on their Diagnosis Related Group (DRG) and then tracked in simulated episodes-of-care/payment bundles that lasted for the duration of 30, 60, and 90 days following the discharge from the index-surgical hospitalization. Total costs associated with each episode-of-care duration were measured and characterized.Results. A total of 196,918 patients met our inclusion criteria. Significant variation existed between DRGs, ranging from $11,180 (30-day bundle, DRG 491) to $107,642 (30-day bundle, DRG). There were significant cost variations within each individual DRG. Post-discharge care accounted for a relatively small portion of overall bundle costs (range 4-8% in 90-day bundles). Total bundle costs remained relatively flat as bundle-length increased (total average cost of 30-day: $33,522 vs. $35,165 for 90-day). Payments to hospitals accounted for the largest portion of bundle costs (76%)Conclusion. There exists significant variation in total healthcare costs for spinal surgery patients, even within a given DRG. Better characterization of impacts of a bundled payment system in spine surgery is important for understanding the costs of index procedure hospital, physician services and post-operative care on potential future healthcare policy decision making.
Ugiliweneza, B; Kong, M; Nosova, K; Huang, KT; Babu, R; Lad, SP; Boakye, M
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