Hospital Quality and the Cost of Bariatric Surgery in the United States

Andrew M Ibrahim, MD, Amir A Ghaferi, MD, MS, Jyothi Thumma, MPH, Justin B Dimick, MD, MPH. University of Michigan

Introduction: Efforts from payers, policy makers and professional organizations to improve outcomes after bariatric surgery have been widely implemented.  In addition to improving quality, they also aim to reduce the associated healthcare costs. In this context, we sought to examine the relationship between hospital outcomes and expenditures in patients undergoing bariatric surgery in the United States. 

Methods: We performed a retrospective review of 24,353 Medicare beneficiaries undergoing bariatric surgery between 2009 and 2010. We ranked hospitals into quintiles by their risk- and reliability-adjusted post-operative serious complications. We then examined the relationship between upper and lower outcomes quintiles with risk-adjusted, total episode payments.  Additionally, we stratified patients by their risk (low, medium, high) of developing a complication to understand how this impacted payment.

Results: We found a strong correlation between hospital complication rates and episode payments. For example, hospitals in the lowest quintile of complication rates had average total episode payments that were $1,988 per patient less than hospitals in the highest quintile ($11,069 versus $13,057, P<0.005). Cost savings was more prominent amongst high risk patients where the difference of total episode payments per patient between lowest and highest quintile hospitals was $2,720 (11,830 versus $14,550; P<0.005). In addition to total episode payment savings, hospitals with the lowest complication rates also had decreased costs for index hospitalization, readmissions, physician services and post-discharge ancillary care compared to hospitals with the highest complication rates.

Conclusions: Medicare payments for bariatric surgery are significantly lower at hospitals with low complication rates. These findings suggest that efforts to improve bariatric surgical quality may ultimately help reduce costs. Additionally, these costs savings may be most prominent amongst the patients at the highest risk for complications. 

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