Impact of Surgical Quality Improvement on Payments in Medicare Patients

Abstract

Objective To examine the financial impact of quality improvement using Medicare payment data. Background Demonstrating a business case for quality improvement – i.e. that fewer complications translates into lower costs – is essential to justify investment in quality improvement. Prior research is limited to cross-sectional studies showing that patients with complications have higher costs. We designed a study to better evaluate the relationship between payments and complications by using quality improvement itself as a measured outcome. Methods We used national Medicare data for patients undergoing general (n= 1,485,667) and vascular (n= 531,951) procedures. We calculated hospitals’ rates of serious complications in two time periods: 2003-2004 and 2009-2010. We sorted hospitals into quintiles by the change in complication rates across these time periods. Costs were assessed using price-standardized Medicare payments, and regression analyses used to determine the average change in payments over time. Results There was significant change in serious complication rates across the two time periods. The top 20% of hospitals demonstrated a 38% decrease (14.3% vs. 11.6%, p<.001) in complications; in contrast the bottom 20% demonstrated a 25% increase (11.1% vs. 16.5%, p<.001). There was a strong relationship between quality improvement and payments. The top hospitals reduced their payments by $1544 per patient (95% CI, $1334-1755), whereas the bottom of hospitals had no significant change (average $67 increase, 95% CI, -$123 to $258). Conclusions Hospitals that reduced their complications over time had significant reductions in Medicare payments. This demonstrates that payers are clearly incentivized to invest in quality improvement.

Global patient outcomes after elective surgery: prospective cohort study in 27 low-, middle- and high-income countries

“…Postoperative complications increase treatment costs 6 and reduce both life expectancy and quality of life 7 8 Nonetheless, our global understanding of outcomes after surgery remains limited.…”

Ventral and incisional hernia: the cost of comorbidities and complications

“…In an effort to determine the financial impact of quality improvement, Scally et al [23], reviewed inpatient Medicare claims data for all Medicare beneficiaries that underwent 11 general and vascular procedures for two time periods several years apart. These authors found that hospitals that improved quality of care (evidenced by a significant decrease in complication rates between the two time periods) also significantly reduced their Medicare payments.…”

“…as [19][20][21][22][23][24][25] % for open repairs [7,8]. Other reasons for unplanned 30-day readmission following VIHR are ileus or obstruction, bleeding, pulmonary issues, and venous thromboembolism (VTE) [1].…”

Hospital Quality and Medicare Expenditures for Bariatric Surgery in the United States

“…We added this length of stay criteria as done in previous studies to give clinical face validity (i.e. that the complication had meaningful clinical impact) to the rate and make it more specific 11,18 .…”

“…For example, one report of Medicare beneficiaries undergoing major inpatient surgery found that hospitals with higher costs to payers were associated with better outcomes 9 . In contrast, delivering high quality care could reduce costs to payers, particularly if complications and associated expenditures are avoided 10,11 . Moreover, in the context of population health, it is unclear the extent to which targeting quality improvement initiatives aimed at high risk populations undergoing surgery can reduce overall costs 12 .…”