Variations in hospitals costs for surgical procedures: inefficient care or sick patients?

Background: Reducing unwanted variations has been identified as an avenue for cost containment. We sought to characterize variations in hospital costs after major surgery and quantitate the variability attributable to the patient, procedure, and provider.

Methods: A total of 22,559 patients undergoing major surgical procedure at a tertiary-care center between 2009 and 2013 were identified. Hierarchical linear regression analysis was performed to calculate risk-adjusted fixed, variable and total costs.

Results: The median cost of surgery was $23,845 (interquartile ranges, 13,353 to 43,083). Factors associated with increased costs included insurance status (Medicare vs private; coefficient: 14,934; 95% CI = 12,445.7 to 17,422.5, P < .001), preoperative comorbidity (Charlson Comorbidity Index = 1; coefficient: 10,793; 95% CI = 8,412.7 to 13,174.2; Charlson Comorbidity Index ≥2; coefficient: 24,468; 95% CI = 22,552.7 to 26,383.6; both P < .001) and the development of a postoperative complication (coefficient: 58,624.1; 95% CI = 56,683.6 to 60,564.7; P < .001). Eighty-six percent of total variability was explained by patient-related factors, whereas 8% of the total variation was attributed to surgeon practices and 6% due to factors at the level of surgical specialty.

Conclusions: Although inpatient costs varied markedly between procedures and providers, the majority of variation in costs was due to patient-level factors and should be targeted by future cost containment strategies.