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Member Research & Reports

Member Research & Reports

Michigan Researchers Find That Type of Post-Surgery Care Affects Cost More Than Intensity of Care

SPH professors Dr. Mousumi Banerjee of the department of biostatistics, and Dr. Edward C. Norton of health management and policy, have collaborated with other UM researchers to publish an article in a recent issue of Health Affairs examining spending patterns for post-surgery patient care.

edward-c-norton mousumi-banerjee
[Photo: Dr. Edward C. Norton (left) and Mousumi Banerjee]

The study collected post-surgical care data from over 600,000 patients in thousands of hospitals that had undergone either a total hip replacement, coronary artery bypass grafting, or a colectomy. After their procedures, these patients were referred to one of four types of services: home health, skilled nursing facilities, inpatient rehabilitation facilities or outpatient rehabilitation. Actual costs, Medicare payments, and billed prices were recorded for each case.

After initial data collection it was clear that the costs associated with post-surgical care varied widely among patients receiving all of the three included procedures. In fact, there was a three-fold difference between the highest and lowest spending data.

Intuitively this may not seem surprising. Though two patients received the same surgery, one may have had more complications than the other and would therefore require more intense and expensive rehabilitation care. However, statistical analysis of the collected data revealed that intensity of care explained only a small portion of the wide variation in costs. Rather, the type of care chosen, and often the billing or reimbursement structure associated with it, was the largest determinant in price variation. Hospitals that sent their patients to inpatient rehabilitation center or skilled nursing facilities had, overall, higher spending on post-acute care.

The implications of these findings could be significant in many hospitals’ efforts to reduce healthcare spending and the variations within it in response to the strong interest in accountable care organizations. Some suggestions from the authors are to both try to reduce length-of-stay in skilled nursing facilities, and to have more standardized methods to assess the rehabilitation needs of the patient and refer them to a type of care accordingly, making sure that they are not paying for unnecessary care measures, and that they are receiving the best value as far as cost relative to benefit to their health.

Read the full article here: