A. R. Ahn1, C. Wirtalla2, J. Tong3, E. Brooks1, C. Lancaster3, R. Kelz1,2,3 1University Of Pennsylvania,Perelman School Of Medicine,Philadelphia, PA, USA 2University Of Pennsylvania,Center For Surgery And Health Economics,Philadelphia, PA, USA 3Hospital Of The University Of Pennsylvania,Department Of Surgery,Philadelphia, PA, USA
Introduction:
Horizontal integration across hospitals results in the formation of hospital systems. This phenomenon has taken many forms including the “Hub and Spoke” model which has particular importance in surgery. This design establishes a dominant hospital, the Hub (HH), where the majority of specialized care is delivered, and “feeder” spoke hospitals (SH). The purpose of this study is to analyze the impact of hospital network formation via the costs of care at HH and SH within systems.
Methods:
Using discharge data from the Healthcare Cost and Utilization Project State Inpatient Database linked to the American Hospital Association (AHA) Annual Survey (2013-2016) across 10 diverse states, adult patients who underwent a common or complex general surgery operation were selected for inclusion. Hospital system affiliations were defined using the AHA. A hospital performing at least 75% of complex cases within a system was designated as a HH; otherwise the hospital was labeled SH. Wage index adjusted hospital costs were calculated in 2016 US dollars using Cost-to-Charge Ratios. Multivariable linear regression was used to examine mean costs with adjustment for patient characteristics and hospital setting. Subset analysis for common and complex operations was performed.
Results:
Among 122,001 patients, 69,494 were treated in systems without a HH (57%), and 52,507 in systems affiliated with a HH (43%). Of the 52,507 treated in systems with a HH, 34,134 (65%) were treated in HH and 18,373 (35%) in SH. Differences in hospital characteristics are displayed in Table 1.
The adjusted cost at hospitals within systems with a HH was $2,188 (95% CI, $2,041 – $2,363) more than that of hospitals within systems without a HH. When comparing HH to SH, the adjusted cost difference was $790 (95% CI, $573 – $1,006) greater at the HH. Common operations were less costly at systems without a HH, and when performed in SH compared to HH. The adjusted cost of complex operations at hospitals within systems with a HH was $2,463 (95% CI, $1,717 – $3,209) more than that of hospitals within systems without a HH. The adjusted cost difference for complex operations was $1,164 (95% CI, $123 – $2,204) less at the HH compared to the SH.
Conclusion:
The major difference between systems with and without a HH is the inclusion of hospitals with a medical school affiliation. These hospitals almost always represent the HH which are often larger than the SH, and perform the majority of the complex operations. Overall costs are greater at systems with a HH and within the HH except for complex operations which cost less at the HH. Systems should consider shifting common cases to the SH in order to reduce the overall cost of surgical care.
