Relationship between occurrence of surgical complications and hospital finances.

Published

Journal Article

IMPORTANCE: The effect of surgical complications on hospital finances is unclear. OBJECTIVE: To determine the relationship between major surgical complications and per-encounter hospital costs and revenues by payer type. DESIGN, SETTING, AND PARTICIPANTS: Retrospective analysis of administrative data for all inpatient surgical discharges during 2010 from a nonprofit 12-hospital system in the southern United States. Discharges were categorized by principal procedure and occurrence of 1 or more postsurgical complications, using International Classification of Diseases, Ninth Revision, diagnosis and procedure codes. Nine common surgical procedures and 10 major complications across 4 payer types were analyzed. Hospital costs and revenue at discharge were obtained from hospital accounting systems and classified by payer type. MAIN OUTCOMES AND MEASURES: Hospital costs, revenues, and contribution margin (defined as revenue minus variable expenses) were compared for patients with and without surgical complications according to payer type. RESULTS: Of 34,256 surgical discharges, 1820 patients (5.3%; 95% CI, 4.4%-6.4%) experienced 1 or more postsurgical complications. Compared with absence of complications, complications were associated with a $39,017 (95% CI, $20,069-$50,394; P < .001) higher contribution margin per patient with private insurance ($55,953 vs $16,936) and a $1749 (95% CI, $976-$3287; P < .001) higher contribution margin per patient with Medicare ($3629 vs $1880). For this hospital system in which private insurers covered 40% of patients (13,544), Medicare covered 45% (15,406), Medicaid covered 4% (1336), and self-payment covered 6% (2202), occurrence of complications was associated with an $8084 (95% CI, $4903-$9740; P < .001) higher contribution margin per patient ($15,726 vs $7642) and with a $7435 lower per-patient total margin (95% CI, $5103-$10,507; P < .001) ($1013 vs -$6422). CONCLUSIONS AND RELEVANCE: In this hospital system, the occurrence of postsurgical complications was associated with a higher per-encounter hospital contribution margin for patients covered by Medicare and private insurance but a lower one for patients covered by Medicaid and who self-paid. Depending on payer mix, many hospitals have the potential for adverse near-term financial consequences for decreasing postsurgical complications.

Full Text

Duke Authors

Cited Authors

  • Eappen, S; Lane, BH; Rosenberg, B; Lipsitz, SA; Sadoff, D; Matheson, D; Berry, WR; Lester, M; Gawande, AA

Published Date

  • April 17, 2013

Published In

Volume / Issue

  • 309 / 15

Start / End Page

  • 1599 - 1606

PubMed ID

  • 23592104

Pubmed Central ID

  • 23592104

Electronic International Standard Serial Number (EISSN)

  • 1538-3598

Digital Object Identifier (DOI)

  • 10.1001/jama.2013.2773

Language

  • eng

Conference Location

  • United States