259. Hospital mark-up and outcomes following lumbar fusions: moving towards the era of transparency in prices

Abstract

BACKGROUND CONTEXT Even though charges levied by hospitals for provision of surgical services has broad financial implications on insurance contracts, pricing is not subject to regulation. As a result, hospital mark-ups (1/charge-to-cost ratio (CCR)) are known to vary significantly across the nation. While hospital administrators argue that higher hospital mark ups are reflective of high-quality care, no study have evaluated the impact of undergoing surgery in high markup hospitals on 90-day outcomes following lumbar fusions. PURPOSE To evaluate whether hospitals with higher mark-up ratios for lumbar fusions is associated with improved/better outcomes. STUDY DESIGN/SETTING Retrospective review of 100% Medicare Standard Analytical Files (SAF100) database. PATIENT SAMPLE The 2014 100% Medicare Standard Analytical Files (SAF100) was queried using DRG code 469 (SPINAL FUSION EXCEPT CERVICAL W/O MCC) to identify patients undergoing lumbar fusions. Hospital mark-up of facilities was calculated using a previously validated formula: (1/CCR). Hospital were divided into three groups – 1) low mark-up (0-2.99), 2) medium mark-up (3.00-5.49) and 3) high mark-up (>5.49). OUTCOME MEASURES Ninety-day complications and readmissions. METHODS Multivariate logistic regression analyses were used to assess for differences in 90-day outcomes between high, medium and low markup hospitals, while controlling for age, gender, region, Elixhauser Comorbidity Index, diagnosis (fracture or degenerative lumbar pathology), approach (anterior or posterior), type of fusion (primary vs revision), extent of fusion (1-3 level or 4-8 level), use of interbody, BMP, neuromonitoring, concurrent laminectomy or discectomy, hospital bed size, teaching status, hospital location (urban or rural), ownership (government, proprietary or voluntary), and whether hospital was a high volume facility (≥ 70 cases/year). A p-value of less than 0.025 was considered significant, due to comparison being carried out between three groups. RESULTS A total of 75,707 patients undergoing surgery in 1,365 hospitals were included – out of which 17,466 (23.1%) received surgery in high mark-up hospitals (N=341), 36,888 (48.7%) received surgery in medium mark-up hospital (N=805) and 21,353 (28.2%) received surgery in low mark-up hospitals (N=341). Following adjustment for baseline demographics, hospital-level factors and clinical characteristics, undergoing surgery at high mark-up hospital (vs low mark-up hospital) was not associated with significant differences in wound complications (p=0.935), sepsis (p=0.139), revision fusion (p=0.139), acute renal failure (p=0.098), myocardial infarction (p=0.774), deep venous thrombosis (p=0.046), pulmonary embolism (p=0.442), and urinary tract infections (p=0.739). High mark-up hospitals, vs low mark-up hospitals, had slightly lower odds of pneumonia (OR 0.76 [95% CI 0.64-0.92]; p=0.004) and readmissions (0.91 [95% CI 0.84-0.98]; p=0.012). Similarly, no significant differences in outcomes were noted between medium mark-up hospitals (vs low mark-up hospitals), with the exception of slightly lower odds of urinary tract infections (p=0.009). CONCLUSIONS Based on the findings of the study, it appears that hospital markup is not largely correlated with the quality of surgical care following lumbar fusions. Moving forward, price transparency in billings will be essential for controlling the ever-increasing cost burden associated with spinal fusions. FDA DEVICE/DRUG STATUS This abstract does not discuss or include any applicable devices or drugs.