S. P. Shubeck1,2,3, M. Healy1,2, J. Thumma1,2, E. Norton4,5,6, J. Dimick1,2, H. Nathan1,2 1University Of Michigan,Department Of Surgery,Ann Arbor, MI, USA 2University Of Michigan,Center For Health Outcomes & Policy (CHOP),Ann Arbor, MI, USA 3University Of Michigan,National Clinician Scholars Program,Ann Arbor, MI, USA 4University Of Michigan,Department Of Health Management And Policy,Ann Arbor, MI, USA 5University Of Michigan,Department Of Economics,Ann Arbor, MI, USA 6National Bureau Of Economic Research,Cambridge, MA
Introduction: The Affordable Care Act’s emphasis on value over volume has signaled a shift in responsibility for healthcare costs from payers to providers. Bundled payment programs are increasingly focused on surgical procedures. Population-based management of surgical costs requires that providers can prospectively identify high cost surgical patients. This strategy, known as “hot spotting,” is well developed in medical populations, but little investigation has focused on high cost surgical patients. We sought to assess the feasibility of prospectively hot spotting high cost surgical patients.
Methods: Using 100% Medicare claims data for 2010-2013, we identified patients aged 65-99 years undergoing four elective procedures: colectomy, coronary artery bypass grafting (CABG), total hip arthroplasty (THA), or total knee arthroplasty (TKA). We calculated price-standardized Medicare payments for index hospitalization, physician services, post-acute care, and readmissions for the entire “surgical episode” from the index admission through 30 days after discharge. Patient level factors associated with payments were analyzed by multivariable linear regression.
Results: Medicare patients in the highest decile of spending accounted for a disproportionate share of aggregate costs: 30% in colectomy, 22% in CABG, 19% in THA, and 18% in TKA. Medicare expenditure differences between the highest and lowest deciles (colectomy: $75,164 vs $9,366; CABG: $77,788 vs $20,814; THA: $36,688 vs $11,406; TKA: $35,248 vs $11,647) were explained primarily by a 5-fold difference for colectomy and 3-fold difference for CABG in index hospitalization cost. In contrast, there was an 80-fold difference for THA and 47-fold difference for TKA in post-acute care expenditures between highest and lowest deciles (Figure). In multivariable analyses, patient age, gender, and socioeconomic status had minimal association with episode cost, but patients with ≥3 comorbidities had significantly higher costs compared to those with 0-1 comorbidities (colectomy: +$9,022; CABG: +$3,751; THA: +$3,172; TKA: +$2,604).
Conclusion: We found that a subset of patients was responsible for a disproportionate share of total Medicare spending for these procedures. The individual components of spending that primarily drive expenditures vary by procedure. Providers may control cost by through patient selection when spending is driven by multimorbidity, while limiting post-acute care may be effective in other procedures. These findings suggest that targeting high cost Medicare patients (i.e., hot spotting) for prehabilitation or selective referral would be a potentially effective strategy to reduce costs in surgical populations.
