158. Determinants of variability in observed costs in spinal surgery episodes within the bundled care payment initiative

Abstract

BACKGROUND CONTEXT As the overall cost of health care and its proportion of gross domestic product (GDP) continue to rise, bundled payment initiatives have been developed as a response in order to simultaneously decrease costs and improve outcomes. These initiatives have been successfully implemented in the field of hip and knee arthroplasty, where treatment algorithms are standardized and predictable. Few have looked at the applicability of bundled care payments to the complicated and often unstandardized field of spine surgery. The goal of our study was to quantify realized costs across episodes of care in commonly performed spinal surgeries and identify variability within proposed bundles. PURPOSE To delineate observed costs and understand variability within proposed spine bundles using an internal dataset. OUTCOME MEASURES Observed costs incurred in each episode of care within the bundled care initiative. METHODS Three bundles were identified as well as their respective diagnosis-related groups (DRG). The three bundles consisted of non-fusion neck and back surgery (DRG 518, 519, 520), cervical spinal fusion (DRG 471, 472, 473), and non-cervical spinal fusion (DRG 459, 460). Total costs per episode were calculated for all episodes beginning first quarter 2014 to the third quarter of 2016. Total costs per episode were compared to CMS target prices in 2018 real dollars. Subanalyses were performed to define the variability within each bundle as well as to identify outliers. RESULTS A total of 591 episodes of care were identified over 11 financial quarters: 145 non-fusion neck and back surgeries, 185 cervical fusion episodes, and 261 non-cervical fusions. The average cost per episode across these 11 quarters was $39,953.94 (SD $27,284.76), $65,499.07 (SD $36,909.95), and $78,241.24 (SD $35,899.00), respectively. There was statistically significant inter-DRG variability within each bundle (p CONCLUSIONS Bundled payment care initiatives may have a role in spinal surgery if standardized treatment algorithms can be implemented and outliers can be minimized. Our analysis showed significant intra-bundle and inter-DRG variability. Postacute care contributed the most to the variability and appears to be the most modifiable factor in an effort to decrease costs. Professional fees also contributed to variability in spine episodes (contrasting to arthroplasty) though only within fusion episodes. Outliers alone may dictate the economic viability of bundled care initiatives. Further analysis is required to be able to predict and modify variables that lead to significant deviation from the norm. FDA DEVICE/DRUG STATUS This abstract does not discuss or include any applicable devices or drugs.