Understanding the Costs Associated With Surgical Care Delivery in the Medicare Population

Abstract

Background: Surgical care has been largely untargeted by Medicare payment reforms because episode costs associated with its delivery are not currently well understood. Objective: To quantify the costs of inpatient and outpatient surgery in the Medicare population. Methods: We analyzed claims data from a 20% national sample of Medicare beneficiaries (2008–2014). For a given study year, we identified all inpatient and outpatient procedures and constructed claims windows around them to define surgical episodes. After summing payments for services rendered during each episode, we totaled all inpatient and outpatient episode payments by surgical specialty. For inpatient episodes, we determined component payments related to the index hospitalization, readmissions, physician services, and postacute care. For outpatient episodes, we differentiated by the site of care (hospital outpatient department versus physician office versus ambulatory surgery center). We used linear regression to evaluate temporal trends in inpatient and outpatient surgical spending. Finally, we estimated the contribution of surgical care to overall Medicare expenditures. Results: Total Medicare payments for surgical care are substantial, representing 51% of Program spending in 2014. They declined modestly over the study period, from $133.1 billion in 2008 to $124.9 billion in 2014 (−6.2%, P = 0.085 for the temporal trend). While spending on inpatient surgery contributed the most to total surgical payments (69.4% in 2014), it declined over the study period, driven by decreases in index hospitalization (−16.7%, P = 0.002) and readmissions payments (−27.0%, P = 0.003). In contrast, spending on outpatient surgery increased by $8.5 billion (28.7%, P < 0.001). This increase was realized across all sites of care (hospital outpatient department: 36.6%, P < 0.001; physician office: 22.1%, P < 0.001; ambulatory surgery center: 36.6%, P < 0.001). Ophthalmology and hand surgery witnessed the greatest growth in surgical spending over the study period. Conclusions and Relevance: Surgical care accounts for half of all Medicare spending. Our findings not only highlight the magnitude of spending on surgery, but also the areas of greatest growth, which could be targeted by future payment reforms.

Estimated GFR and Incidence of Major Surgery: A Population-Based Cohort Study

“…Surgical exposure is not without risk. 32 The costs associated with surgery in people with CKD are worth future investigation, though it is expected as in other settings that the proportional costs will be significantly higher in patients with CKD than in those with normal kidney function. 33,34 Overall, our results suggest that we need to understand why people with the lowest kidney function have such high rates of surgery, so that we may target risk factors not only for postoperative outcomes, but for the upstream indications for surgery themselves.…”

The Incidence and Cumulative Risk of Major Surgery in Older Persons in the United States

“…The copyright holder for this this version posted November 30, 2020. ; https://doi.org/10.1101/2020.11.26.20239228 doi: medRxiv preprint and nearly 50% of hospitalization costs are related to operating room-based procedures, 42,43 the ability of Medicare to continue to cover all major surgery in the future will be fiscally challenging.…”

A Standardized Framework for Evaluating Surgical Enhanced Recovery Pathways: A Recommendations Statement from the TDABC in Health-care Consortium

“…With millions of surgeries performed annually in the United States, an estimated 51% of the total Medicare expenses are consumed by surgical care, and these expenditures continue to rise. 43 From 2005 to 2025, the aggregate surgical expenses will increase by approximately 100%. 44 By understanding the burden of surgical episodes in the health system, reimbursement and ERP designs have been introduced to reduce health-care costs (and waste) and improve the quality of care.…”

“…4 However, the cost of surgical care is currently poorly understood. 43 The framework introduced here can guide decisions in an era where how things are being done is just as important as what it is being done. In emerging economies where the administrative and patient outcomes data availability is limited, the redesign of surgical pathways can be facilitated by following the proposed step-by-step process.…”