• Current data on the surgical management of breast carcinoma support the selective use of conservative surgery, ie, lumpectomy, axillary sampling, plus irradiation, rather than modified radical mastectomy. An economic comparison of these two forms of surgical therapy was conducted. Total charges for treatment (hospital and physician) of 79 patients with stage I or II breast cancer at our hospital during 1983 and 1984 utilizing either therapy demonstrated that mean total charges per patient for lumpectomy (N =49) were $14176± $4262, and for mastectomy (N=30) were $10 345±$3134. Although hospital inpatient fees were significantly less for lumpectomy ($5741) than for mastectomy ($7328), mean total physician fees were significantly higher for lumpectomy ($4505). Radiotherapist fees and the substantial radiation therapy hospital outpatient charge for lumpectomy ($5015) made the mean total charges for lumpectomy significantly higher than for mastectomy. (Arch Surg1986;121:1297-1301)
Hospitals face increasing uncertainty under prospective payment systems such as Medicare's DRG system. We analyzed the equity of the DRG system for 2622 Medicare surgical patients in the 82 non-age stratified surgical DRGs. Patients age 70 and over had higher total hospital costs (P less than .05), a longer hospital length of stay, more diagnoses per patient, losses under DRG payment (P less than .01), a greater percentage of outliers (P less than .05) and higher mortality than patients in these same DRGs under 70 years of age. This data suggests that the current DRG classification scheme may be inequitable vis-a-vis older Medicare patients in the non-age stratified surgical DRGs, and could provide financial disincentives that limit both their access and quality of care in the future.
Health care expenditures for 2005 in the United States were $1.9733 trillion and 15.9% of the gross domestic product (GDP). Twenty-nine percent of those expenditures were secondary to surgical revenues. Health care expenditures are increasing 2(1/2) times the rate of the general US economy and are being fed by new technologies, new medications, the aging population, more services provided per patient, defensive medicine and little tort reform, the insurance system, and the free rider problem, ie, patients are cared for as emergencies regardless of insurance coverage and legality, which all have contributed to rising health care and surgical expenditures over the last 50 years.The purpose of this study was to project aggregate national health care expenditures, aggregate surgical health care expenditures, and the United States GDP for the years 2005-2025. Model building and existing state and national data were used. Aggregate surgical health care expenditures were computed as 29% of aggregate health care expenditures using a unique model developed by the late Dr. Francis D. Moore. The model of Dr. Moore which used 1981 federal data was verified/tested using data from UMDNJ-University Hospital, and New Jersey and national data from 2005. From 1965 to 2005 mean health care expenditures increased at 4.9% per year, and US GDP increased at a mean of 2.1% per year.Aggregate surgical expenditures are expected to grow from $572 billion in 2005 (4.6% of US GDP) to $912 billion (2005 dollars) in the year 2025 (7.3% of US GDP). Aggregate health care expenditures are projected to increase from $5572 per capita (15.9% of GDP) in 2005 to $8832 per capita (2005 dollars) in 2025 (25.2% of US GDP). Both surgery and national health care expenditures are expected to expand by almost 60% during the period 2005-2025. Thus, surgical health care expenditures by 2025 are likely to be 1/14 of the US economy, and health care expenditures will be (1/4) of the US economy.Real per capita GDP growth is relatively flat in the United States. Rising surgical health care expenditures and national health care expenditures are a significant issue for the US population. Unfortunately, programs at the state and federal level as well as private programs, for the last 50 years have not been able to slow the growth in health care expenditures. These trends are likely to continue and the effects will be: * A change in the US standard of living as surgical and health care expenditures become a larger part of the earned dollar per American especially with the current volatility of the US economy, * A rise in the cost of products made in the United States to pay the rising health care bill with a concomitant change in our national and international standard of living, and * An increasing debt and increases in federal and state taxes which will be required to maintain the current health care system, ie, Medicare, Medicaid, and the private health care insurance payment scheme, which has not changed substantially over the past 40 to 50 years. Surgeons must look at the incremental benefit of new technologies and procedures and determine which to choose if we are to slow the growth of surgical health care expenditures.
This article details data that suggest significant inequities in the current DRG prospective payment system vis-à-vis surgical mortalities. Important health policy issues, in addition to the ability of outcome data to function as a proxy for quality, involve the usefulness of stratifying DRGs vis-à-vis outcome or severity of illness in the future. Much interest has emerged in outcome data--especially with regard to its ability to function as a risk-adjusted quality-of-care screen for hospitals. A study of hospital resource consumption comparing survivors and mortalities demonstrated that surgical mortalities had a much greater intensity of hospital resource utilization and a substantial financial risk under Medicare's DRG prospective payment pricing system, as compared to surgical survivors. Hospital length of stay for mortalities proved very unprofitable. Emergency-admitted patients who died tended to have shorter hospital stays and less financial risk under DRGs than nonemergency mortalities. Mortalities referred to surgery from other clinical services tended to have greater resource utilization and financial risk under DRGs than nonreferred mortalities.
• The importance of delivering cost-effective quality surgical care has increased with the introduction of new payment mechanisms designed to slow the rise in health care costs. We examined the reasons for the use of a commonly used surgical input—a drain—to determine surgeons' feelings about the importance of costs. Both resident and attending general surgeons felt that the cost of the input was not an important consideration in the decision-making process of choosing the input. We believe that these findings are applicable across the range of inputs (hospital days, laboratory tests, ancillary procedures) used by surgeons in their practices. Unless this changes in the future, surgeons will not be able to provide quality surgical care within economic constraints. (Arch Surg1985;120:1285-1287)
We analyzed all adult surgical patients requiring readmission to the surgical service of an acute care academic hospital for a four-year period (1/1/85-12/31/88). We stratified surgical readmissions by the number of times the patient was readmitted to surgery (from one to five times). For surgical patients 41.1 per cent of the readmission population was readmitted more than once, only 4.4 per cent were readmitted five or more times. Patients requiring three or more admissions generally had the greatest hospital resource utilization, financial risk under DRG payment, and mortality, compared with other surgical readmissions. This analysis suggests that within the surgical readmission population resource parameters may differ by the number of readmissions per patient. Factors were identified which corresponded to a greater likelihood of surgical readmission, and possibly allow the focus of outpatient services which may reduce hospital inpatient costs in the future.
The purpose of this study was to analyze hospital cost, resource utilization, and outcome by age for a large group of hospitalized plastic surgical patients using the DRG format. Hospital cost per patient for all plastic surgical admissions (both inpatient and potentially ambulatory patients) treated (N = 1632) at an academic medical center increased with age and peaked for plastic surgical patients 75 to 80 years of age ($11,585 per patient). Although DRG payment would have produced an aggregate profit of $2,404,854, older plastic surgical patients (65 years of age and above) generally produced losses. Older plastic surgical patients demonstrated a longer hospital length of stay, a greater severity of illness, a higher percent of outliers, and a greater mortality than younger plastic surgical patients. In addition, older plastic surgical patients had higher clinical resource utilization based on a number of clinical parameters such as emergency admission, SICU utilization, need for blood transfusions, and need for plasma product infusions. This study suggests that the current DRG reimbursement methodology may be inequitable vis-à-vis the older plastic surgical patient. As additional pressures encourage the performance of more ambulatory procedures (previously performed as inpatients), our profit margins may decline and possibly affect our ability to provide quality plastic surgical care.
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