title: Financial implications of ventral hernia repair: a hospital cost analysis.
abstract: BACKGROUND
  Complicated ventral hernias are often referred to tertiary care centers. Hospital costs associated with these repairs include direct costs (mesh materials, supplies, and nonsurgeon labor costs) and indirect costs (facility fees, equipment depreciation, and unallocated labor). Operative supplies represent a significant component of direct costs, especially in an era of proprietary synthetic meshes and biologic grafts. We aim to evaluate the cost-effectiveness of complex abdominal wall hernia repair at a tertiary care referral facility.
  
  
  METHODS
  Cost data on all consecutive open ventral hernia repairs (CPT codes 49560, 49561, 49565, and 49566) performed between 1 July 2008 and 31 May 2011 were analyzed. Cases were analyzed based upon hospital status (inpatient vs. outpatient) and whether the hernia repair was a primary or secondary procedure. We examined median net revenue, direct costs, contribution margin, indirect costs, and net profit/loss. Among primary hernia repairs, cost data were further analyzed based upon mesh utilization (no mesh, synthetic, or biologic).
  
  
  RESULTS
  Four-hundred and fifteen patients underwent ventral hernia repair (353 inpatients and 62 outpatients); 173 inpatients underwent ventral hernia repair as the primary procedure; 180 inpatients underwent hernia repair as a secondary procedure. Median net revenue ($17,310 vs. 10,360, p < 0.001) and net losses (3,430 vs. 1,700, p < 0.025) were significantly greater for those who underwent hernia repair as a secondary procedure. Among inpatients undergoing ventral hernia repair as the primary procedure, 46 were repaired without mesh; 79 were repaired with synthetic mesh and 48 with biologic mesh. Median direct costs for cases performed without mesh were $5,432; median direct costs for those using synthetic and biologic mesh were $7,590 and 16,970, respectively (p < .01). Median net losses for repairs without mesh were $500. Median net profit of $60 was observed for synthetic mesh-based repairs. The median contribution margin for cases utilizing biologic mesh was -$4,560, and the median net financial loss was $8,370. Outpatient ventral hernia repairs, with and without synthetic mesh, resulted in median net losses of $1,560 and 230, respectively.
  
  
  CONCLUSIONS
  Ventral hernia repair is associated with overall financial losses. Inpatient synthetic mesh repairs are essentially budget neutral. Outpatient and inpatient repairs without mesh result in net financial losses. Inpatient biologic mesh repairs result in a negative contribution margin and striking net financial losses. Cost-effective strategies for managing ventral hernias in a tertiary care environment need to be developed in light of the financial implications of this patient population.
authors.affiliation: Division of General Surgery, Department of Surgery, University of Kentucky College of Medicine, Lexington, KY, USA.
authors.forename: Drew
authors.initials: D
authors.lastname: Reynolds
authors.forename: Daniel L
authors.initials: DL
authors.lastname: Davenport
authors.forename: Ryan L
authors.initials: RL
authors.lastname: Korosec
authors.forename: J Scott
authors.initials: JS
authors.lastname: Roth
mesh_terms: D003362:Cost-Benefit Analysis; D004180:Direct Service Costs / Q000706:statistics & numerical data*; D006555:Hernia, Ventral / Q000191:economics / Q000601:surgery*; D059685:Herniorrhaphy / Q000191:economics* / Q000295:instrumentation; D017721:Hospital Costs / Q000706:statistics & numerical data*; D006801:Humans; D007629:Kentucky; D013526:Surgical Mesh / Q000191:economics / Q000706:statistics & numerical data; D062606:Tertiary Care Centers / Q000191:economics* / Q000706:statistics & numerical data