Quantifying the Burden of Interhospital Cost Variation in Pediatric Surgery

Abstract

Practice variation is believed to be a driver of excess health care spending, although few objective data exist to guide the prioritization of comparative effectiveness research (CER) in pediatric surgery. To identify high-priority general pediatric surgical procedures for CER on the basis of the following 2 complementary measures: the magnitude of interhospital cost variation as a surrogate for the need for and potential effect of CER at the patient level and the cumulative fiscal burden of this cost variation when considering the case volume from all hospitals as a surrogate for public health relevance. This was a cohort study of patients undergoing 1 of the 30 most costly pediatric surgical operations at 45 children's hospitals between January 1, 2014, and September 30, 2015. Cost data were extracted from the Pediatric Health Information System database and adjusted for differences in unit-based costing at the hospital level and for differences in case mix and disease severity at the patient level. First, the width of the interquartile range (WIQR) of the adjusted procedure-specific median cost across hospitals. Second, the procedure-specific cost variation burden, which was calculated as the aggregate sum of absolute cost differences between the overall adjusted median cost derived from all patients treated at all hospitals and the adjusted cost of each individual patient treated at all hospitals. A total of 92 535 encounters were analyzed. The median number of encounters per hospital was 2011 (interquartile range [IQR], 1224-2619), and the median number of encounters per procedure was 610 (IQR, 442-2610). In the final cohort, 66.9% (n = 61 933) of the patients were male, and the median age was 7 years (IQR, 1.9-12.3 years). Cost variation at the hospital level was greatest for gastroschisis (WIQR, $48 471; median, $111 566 [IQR, $91 195-$139 936]), congenital diaphragmatic hernia (WIQR, $43 948; median, $154 730 [IQR, $129 764-$173 712]), tracheoesophageal fistula/esophageal atresia (WIQR, $39 206; median, $105 259 [IQR, $87 335-$126 541]), and total colectomy for ulcerative colitis (WIQR, $24 497; median, $34 910 [IQR, $28 815-$53 312]). The following 5 diagnoses accounted for 52.5% of the cumulative cost variation burden from all 30 conditions: uncomplicated appendicitis (18.0% [$66 205 117]), complicated appendicitis (14.1% [$51 702 402]), gastroschisis (9.5% [$34 940 331]), gastrostomy (5.8% [$21 227 436]), and small-intestinal atresia (5.1% [$18 840 546]). Neonatal cases contributed 3.6% of the case volume and accounted for 26.8% of the cumulative cost variation burden from all 30 conditions. A small number of procedures account for most of the cost variation burden in pediatric surgery, with some demonstrating wide cost variation among hospitals. Gastroschisis and small-intestinal atresia may be particularly high-yield targets for multidisciplinary CER efforts, while the management of appendicitis and gastrostomy should be considered high-priority conditions among pediatric surgeons.