Spinal surgery: variations in health care costs and implications for episode-based bundled payments.
METHODS
Retrospective, observational.


OBJECTIVE
To simulate what episodes of care in spinal surgery might look like in a bundled payment system and to evaluate the associated costs and characteristics.


BACKGROUND
Episode-based payment bundling has received considerable attention as a potential method to help curb the rise in health care spending and is being investigated as a new payment model as part of the Affordable Care Act. Although earlier studies investigated bundled payments in a number of surgical settings, very few focused on spine surgery, specifically.


METHODS
We analyzed data from MarketScan. Patients were included in the study if they underwent cervical or lumbar spinal surgery during 2000-2009, had at least 2-year preoperative and 90-day postoperative follow-up data. Patients were grouped on the basis of their diagnosis-related group (DRG) and then tracked in simulated episodes-of-care/payment bundles that lasted for the duration of 30, 60, and 90 days after the discharge from the index-surgical hospitalization. The total cost associated with each episode-of-care duration was measured and characterized.


RESULTS
A total of 196,918 patients met our inclusion criteria. Significant variation existed between DRGs, ranging from $11,180 (30-day bundle, DRG 491) to $107,642 (30-day bundle, DRG 456). There were significant cost variations within each individual DRG. Postdischarge care accounted for a relatively small portion of overall bundle costs (range, 4%-8% in 90-day bundles). Total bundle costs remained relatively flat as bundle-length increased (total average cost of 30-day bundle: $33,522 vs. $35,165 for 90-day bundle). Payments to hospitals accounted for the largest portion of bundle costs (76%).


CONCLUSIONS
There exists significant variation in total health care costs for patients who undergo spinal surgery, even within a given DRG. Better characterization of impacts of a bundled payment system in spine surgery is important for understanding the costs of index procedure hospital, physician services, and postoperative care on potential future health care policy decision making.


METHODS
N/A.
From the Departments of *Neurosurgery and †Bioinformatics and Biostatistics, School of Public Health and Information Science (SPHIS), University of Louisville, Louisville, KY; and ‡Division of Neurosurgery, Department of Surgery, Duke University Medical Center, Durham, NC.
Beatrice
B
Ugiliweneza
Maiying
M
Kong
Kristin
K
Nosova
Kevin T
KT
Huang
Ranjith
R
Babu
Shivanand P
SP
Lad
Maxwell
M
Boakye
D000328:Adult; D000368:Aged; D000369:Aged, 80 and over; D002574:Cervical Vertebrae / Q000601:surgery; D003695:Delivery of Health Care / Q000191:economics; D003953:Diagnosis-Related Groups / Q000191:economics; D017050:Episode of Care; D018588:Fee-for-Service Plans / Q000191:economics; D005249:Fees and Charges; D005260:Female; D017048:Health Care Costs; D005102:Health Expenditures / Q000706:statistics & numerical data; D006760:Hospitalization / Q000191:economics; D006801:Humans; D008159:Lumbar Vertebrae / Q000601:surgery; D008297:Male; D008875:Middle Aged; D019637:Orthopedic Procedures / Q000191:economics* / Q000379:methods*; D058991:Patient Protection and Affordable Care Act / Q000191:economics; D012189:Retrospective Studies; D013131:Spine / Q000601:surgery*; D014481:United States; D055815:Young Adult