Variation in Surgical Spending Among the Highest Quality Hospitals for Cancer Surgery

Objective: This study evaluates the variation in spending by the highest-quality hospitals performing complex cancer surgery in the United States.

Summary background data: As mortality rates for high-risk cancer surgery have improved, increased attention has focused on other elements of quality, such as complications. However, high-value surgical care requires both high-quality care and cost savings. Therefore, understanding any residual cost variation among high-quality hospitals is essential in order to better direct efforts to achieve efficient, high-value care.

Methods: Medicare beneficiaries age 65 to 99 who underwent surgery for pancreas, esophageal, lung, rectal, and colon cancer from 2014 to 2016 were identified. The highest-quality hospitals were identified as those in the quintile with the lowest risk- and reliability-adjusted serious complication rates for each operation. Within this cohort of high-quality hospitals, thirty-day total episode, index hospitalization, physician, postacute care, and readmission spending was analyzed. Logistic regression models were utilized to estimate the probability of postoperative outcomes and post-discharge resource utilization.

Results: 43,007 Medicare patients underwent either pancreas, esophageal, lung, rectal, or colon resection for cancer at a hospital within the highest-quality quintile. Among the highest quality hospitals, total episode spending ranged from $18,712 for colectomy to $38,054 for esophagectomy. Spending between the lowest- and highest spending hospitals varied from $1,207 (CI95% $1,195 to $1,220) or 6.6% of total episode spending in the lowest tertile for colectomy to $5,706 (CI95% $5,506 to $5,906) or 16.1% of total episode spending in the lowest tertile for esophagectomy. The largest component of variation was from postacute care spending followed by readmission. For all operations the risk-adjusted rate of postacute care facility utilization was lower among the lowest spending hospitals compared to the highest spending hospitals. For example, for pancreas the lowest-spending hospitals on average discharged patients to a postacute care facility at a rate of 18,6% (CI95% 16.2 to 20.9) compared to 31.0% (CI95% 28.2 to 33.9) in the highest-spending hospitals. In all operations, the risk-adjusted readmission rate was lower among the lowest-spending hospitals compared to the highest-spending hospitals. For instance, within the esophagus cohort, the lowest-spending hospitals had an average risk-adjusted readmission rate of 17.3% compared to 29.4% in the highest spending hospitals (p < 0.001).

Conclusions and relevance: Even among the highest-quality hospitals, significant cost variation persists among cancer operations. Post-acute care variation, rather than residual variation in complication rates, explains the majority of this variation and represents an immediately actionable target for increased cost efficiency.