Hospital Surgical Volume and Cost of Inpatient Surgery in the Elderly

BACKGROUND: Strong relationships between hospital volume and quality with inpatient surgery have prompted calls for volume-based referral. However, many are concerned that such policies would steer patients toward higher-cost hospitals. STUDY DESIGN: Using 2005-2007 national Medicare claims, we identified all US hospitals performing elective colectomy for cancer, coronary artery bypass surgery, and abdominal aortic aneurysm repair. Patients were sorted into quintiles based on procedure volumes of the hospital in which they had surgery. For each quintile, we assessed overall 30-day Medicare episode payments adjusted for hospital case mix, including the index hospitalization, readmissions, physician services, and post-discharge ancillary care. RESULTS: Hospitals in the lowest-volume quintile had considerably higher case-mix-adjusted episode payments than those in the highest-volume quintile for coronary artery bypass surgery ($960; 2.2% higher) and abdominal aortic aneurysm ($2,796; 8.5% higher), but differences were small for colectomy ($350; 1.3% higher). For coronary artery bypass surgery and abdominal aortic aneurysm repair, the index hospitalization was the largest source of higher overall payments at very low-volume hospitals. For all 3 procedures, very low-volume hospitals had higher payments for both 30-day readmissions and post-discharge ancillary care. CONCLUSIONS: Volume-based referral policies would not steer patients toward hospitals with high mean costs around episodes of inpatient surgery in the elderly. Minimizing the use of very low-volume hospitals has the potential to reduce costs as well as improve outcomes, particularly for operations with strong volume-outcomes associations.