American College Of Surgeons - Inspiring Quality: Highest Standards, Better Outcomes

Higher Volume May Produce Lower Cost

OCTOBER 29, 2019
Clinical Congress Daily Highlights, Tuesday Second Edition

High-volume hospitals not only have better surgical outcomes than low-volume hospitals; they also cost less, according to a new study led by James S. Yoon, MD, Barrow Neurological Institute, Phoenix, AZ.

Although there is extensive documentation of improved outcomes at higher hospital volume for surgical procedures, the relationship between surgical volume and costs is less understood. That’s why Yoon and his fellow researchers set out to do a nationwide analysis of inpatient admissions using surgery-specific DRG codes.

Based on annual surgical volume, they categorized hospitals as high-volume or low-volume centers; there were 3,343 hospitals, out of which 781 were high-volume. They identified all adult surgical admissions in the National Inpatient Sample spanning 2008–2014; of the 84.6 million total admissions that underwent surgical procedures, 68 percent were treated at high-volume hospitals.

The researchers analyzed the data using a multivariate model adjusted for patient demographics, procedural severity, and hospital characteristics (location/teaching status, ownership, region, wage index). Patients at high-volume hospitals are more likely to be older, privately insured, and undergo more resource-heavy operations. Although high-volume hospitals were 16 percent more expensive than low-volume centers, admission to a high-volume hospital was associated with a 5.7 percent reduction in cost following multivariate adjustment, or about $1,016 per patient on average.

As a result, adjusted average costs were significantly lower at high-volume hospitals than low-volume hospitals ($16,833 vs. $17,849; P=0.01). The authors concluded that if 10 percent of transfer candidates were treated at high-volume hospitals, it would result in an estimated $2.93 billion in annual savings.

“We think the explanations are improved outcomes, better care processes, economies of scale, and new payment models, such as bundled payments,” Yoon said.

The authors believe that the trend toward lower cost at high-volume hospitals may have been masked by greater case complexity and procedural intensity. Amid sharply-rising medical costs, treatment at high-volume surgical institutions may be a promising strategy to deliver higher value care.

The drawbacks of pushing more patients to high-volume hospitals include an adverse impact on rural and lower-volume hospitals, and potentially overburdening high-volume institutions.

Additional Information:
The Scientific Forum, Health Services Research IV – Volume-Cost Relationship in Surgery: Nationwide Analysis of 84.6 Million Inpatient Admissions, was held Tuesday, October 29 at the American College of Surgeons Clinical Congress 2019 in San Francisco (program, webcast and audio information).