Explaining the Volume-Cost Relationship for Cancer SurgeryVivian Ho PhDa Meei-Hsiang Ku-Goto MAaand Thomas Aloia MDb

aRice University and Baylor College of MedicinebMD Anderson Cancer Center*This research was supported by grant number 1R01 CA 138640-01 A2 from the NationalCancer Institute.

Are there determinants of high quality, low cost cancer surgery?*

Background*

BackgroundHigher surgeon volume lowered hospital costs for 6 cancer operations. (Ho and Aloia, Medical Care 2008)Higher hospital volume lowered costs only for colectomy.

Do high volume hospitals spend more to improve outcomes?Broader range of specialists?Advanced ICUs and technology-based services?

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This study*

DataSEER-Medicare filesPatients diagnosed 2001-2005, Medicare claims through 2007.

MedPAR files linked to Carrier claims.Patients who received cancer surgery for 2005-2009.

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*Methods

Dependent VariablesRegressorsHospital characteristicsSurgeon characteristicsPatient characteristics

Methods*

Methods*

MethodsRegressions include year and hospital fixed effects.

Coefficient on volume measures effects of within-hospital changes in volume. Cant specify volume in categories.

Standard errors adjusted for clustering of unobservables across patients within hospitals.*

Methods*

Methods*

Methods*

*

AHRQ Hospital-level Patient Safety Indicators Complications of anesthesia (PSI 1)Death in low mortality DRGs (PSI 2)Decubitus ulcer (PSI 3)Failure to rescue (PSI 4)Foreign body left in during procedure (PSI 5)Iatrogenic pneumothorax (PSI 6)Selected infections due to medical care (PSI 7)Postoperative hip fracture (PSI 8)Postoperative hemorrhage or hematoma (PSI 9)Postoperative physiologic and metabolic derangements (PSI 10)Postoperative respiratory failure (PSI 11)Postoperative pulmonary embolism or deep vein thrombosis (PSI 12)Postoperative sepsis (PSI 13)Postoperative wound dehiscence in abdominopelvic surgical patients (PSI 14)Accidental puncture and laceration (PSI 15)Transfusion reaction (PSI 16)

Costly Hospital ServicesNurse-to-patient ratiosHospital has CT ScannerHospital has Electron beam computed tomography (EBCT)Hospital has Magnetic resonance imaging (MRI)Hospital has Multi-slice spiral computed tomographyHospital has Positron emission tomography

Processes of CareArterial Line Transfusion packed red blood cells or auto-transfusion Critical Care Consultations Central Venous Catheter Daily Epidural Management Epidural Anesthesia Frozen Section Incidental Appendectomy Inpatient Consultations Pulmonary Artery Catheter Re-intubation Total Parenteral Nutrition Total claimed hours for anesthesia

*Figure 1: Hospital Costs by Hospital and Surgeon Volume (SEER)

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Figure 2: PhysicianReimbursements byHospital and SurgeonVolume (SEER)

*Determinants of ln(Hospital Costs + Physician Payments)Colon Resection (SEER Medicare data)All regressions include patient and hospital characteristics, mean nurse wages, and the nurse-to-patient ratio.t-statistics in parentheses*p

*Determinants of ln(Hospital Costs + Physician Payments)Pancreatic Resection (SEER Medicare data)All regressions include patient and hospital characteristics, mean nurse wages, and the nurse-to-patient ratio.t-statistics in parentheses*p

Summary of SEER Results*

Summary of SEER Results*

Summary of SEER Results*

Caveats*

Pancreatic Resection Volume, CMS

HospitalSurgeonMinMedMaxMinMedMax20051314912722006131191254200713138126720081512712542009151381259

Pancreatic Resection Volume, SEER

HospitalSurgeonMinMedMaxMinMedMax200113131110200214151213200314141210200416161314200515191313

Top 5 Hospitals by Pancreatic Resection Volume, CMS 2005

Hospital NameVolumeCityStateSEERJohns Hopkins Hospital149BaltimoreMDNoClarian Health Partners108IndianapolisINNoMemorial Sloan-Kettering Cancer Center94New YorkNYYesMassachusetts General Hospital80BostonMANoSaint Marys Hospital77RochesterMNNo

Within Provider Change in VolumePancreatic Resection, 2005-2009

HospitalSurgeonMinMedMaxMinMedMax-73-222-35027

Average Cost per Pancreatic Resection Patient

Chart1

39304.96

38526.125

39182.859

37285.536

35566.749

Cost per Patient

Sheet1

YearCost per Patient

200539304.96

200638526.125

200739182.859

200837285.536

200935566.749

To resize chart data range, drag lower right corner of range.

Pancreatic Resection Total Cost Regression, FE*All regressions include year dummies.

(1) No Controls(2) + Patient Variables(3) + Hospital VariablesHospital volume0.000663(0.97)-0.000182(-0.31)-0.0000263(-0.07)Surgeon volume= ln(surgeon volume/10)-0.0503***(-6.13)-0.0407***(-5.22)-0.0429***(-5.88)Patient VariablesXXNurse-to-patient ratio0.0267***(3.96)Hospital VariablesX

N135721237712348

Pancreatic Resection Total Cost Regression, FE*Regression includes year dummies and patient and hospital characteristics.

(4)+ Safety IndicatorsHospital volume-0.000193(-0.40)Postop hemorrhage or hematoma0.444***(9.14)Surgeon volume= ln(surgeon volume/10)-0.0357***(-4.76)Postop physio metabol derangement0.280(1.35)Complications of anesthesia-0.0346(-0.27)Postop respiratory failure0.537***(15.84)Decubitus ulcer0.338***(6.19)Postoperative pe or dvt0.303***(10.75)Death among surgical0.275***(5.19)Postoperative wound dehiscence0.503***(5.33)Foreign body left in during proc-0.408***(-5.99)Accidental puncture/laceration0.143***(5.17)Iatrogenic pneumothorax0.152(1.64)

N12348

Pancreatic Resection Total Cost Regression, FE*Regression includes year dummies, patient and hospital characteristics, and PSIs.

(5)+ Birkmeyer Processes of CareHospital volume-0.000661(-1.41)Daily Epidural Management-0.00869(-0.65)Surgeon volume= ln(surgeon volume/10)-0.0193**(-3.07)Re-intubation0.253***(8.36)Incidental Appendectomy0.0131(0.27)Transfusion/auto-transfusion-0.0217* (-2.08)Arterial Line0.0660***(6.84)Critical Care Consultations0.285***(18.83)Central Venous Catheter0.0150(0.26)Total Parenteral Nutrition0.148***(6.94)Epidural Anesthesia-0.00500(-0.39)Inpatient Consultations0.216***(17.66)Frozen Section-0.00557(-0.52)Operating Room Time0.0383***(18.34)Pulmonary Artery Catheter0.190***(8.15)

N11877

Lobectomy Volume, CMS

HospitalSurgeonMinMedMaxMinMedMax20051625513822006162301382200717219138620081822313932009192361377

Lobectomy Volume, SEER

HospitalSurgeonMinMedMaxMinMedMax20011106316642002110701673200311170176220041126317662005112611865

Top 5 Hospitals by Lobectomy Volume, CMS 2005

Hospital NameVolumeCityStateSEERMemorial Sloan-Kettering Cancer Center255New YorkNYYesH Lee Moffitt Cancer Center151TampaFLNoSaint Marys Hospital151RochesterMNNoNew York-Presbyterian Hospital129New YorkNYNoUniversity of Texas MD Anderson Cancer Center111HoustonTXNo

Within Provider Change in VolumeLobectomy, 2005-2009

HospitalSurgeonMinMedMaxMinMedMax-58036-37153

Average Cost per Lobectomy Patient

Chart1

23292.178

23285.009

22926.612

22245.323

21858.237

Cost per Patient

Sheet1

YearCost per Patient

200523292.178

200623285.009

200722926.612

200822245.323

200921858.237

To resize chart data range, drag lower right corner of range.

Lobectomy Total Cost Regression, FE*All regressions include year dummies.

(1) No Controls(2) + Patient Variables(3) + Hospital VariablesHospital volume=(hospital volume/100)^3-0.0149**(-2.78)0.00845(0.63)0.00760(0.58)Surgeon volume=(surgeon volume/10)^.5-0.0487***(-4.16)-0.0403***(-4.32)-0.0403***(-4.31)Patient VariablesXXNurse-to-patient ratio0.00938*(2.36)Hospital VariablesX

N570205283552675

Lobectomy Total Cost Regression, FE*Regression includes year dummies and patient and hospital characteristics.

(4) + Safety IndicatorsHospital volume=(hospital volume/100)^30.00990(0.67)Postoperative hip fracture0.404**(2.72)Surgeon volume=(surgeon volume/10)^.5-0.0391***(-4.58)Postop hemorrhage or hematoma0.360***(5.29)Complications of anesthesia0.0611(0.82)Postop physio metabol derangement0.385***(5.65)Decubitus ulcer0.494***(10.74)Postop respiratory failure0.770***(37.43)Death among surgical0.537***(19.57)Postoperative pe or dvt0.349***(14.91)Foreign body left in during proc0.200(1.41)Accidental puncture/laceration0.191***(10.20)Iatrogenic pneumothorax0.0336***(3.32)

N52675

Lobectomy Total Cost Regression, FE*Regression includes year dummies, patient and hospital characteristics, and PSIs.

(5) + Birkmeyer Processes of CareHospital volume=(hospital volume/100)^30.0116(0.91)Daily Epidural Management0.0158**(2.92)Surgeon volume=(surgeon volume/10)^.5-0.0048(-0.66)Re-intubation0.412***(31.60)Incidental Appendectomy1.250***(4.78)Transfusion/auto-transfusion0.0954***(16.61)Arterial Line0.0180***(4.01)Critical Care Consultations0.282***(30.11)Central Venous Catheter0.122*(2.52)Total Parenteral Nutrition0.313***(11.20)Epidural Anesthesia-0.00768(-1.62)Inpatient Consultations0.186***(34.42)Frozen Section0.0426***(10.63)Operating Room Time0.0742***(33.22)Pulmonary Artery Catheter0.177***(11.04)

N48689

Colon Resection Volume, CMS

HospitalSurgeonMinMedMaxMinMedMax2005123368177020061233721784200712434516832008127342168020091252531558

Colon Resection Volume, SEER

HospitalSurgeonMinMedMaxMinMedMax20051249615362006126127164120071251041636200812510616272009125981637

Top 5 Hospitals by Colon Resection Volume, CMS 2005

Hospital NameVolumeCityStateSEERFlorida Hospital368OrlandoFLNoNew York-Presbyterian Hospital291New YorkNYNoChristiana Care Health System264NewarkDENoMethodist Hospital262San AntonioTXNoBeaumont Hospital Royal Oak252Royal OakMIYes

Within Provider Change in VolumeColon Resection, 2005-2009

HospitalSurgeonMinMedMaxMinMedMax-647147-22356

Average Cost per Colon Resection Patient

Chart1

19916.529

20385.956

20255.139

19934.386

20606.862

Cost per Patient

Sheet1

YearCost per Patient

200519916.529

200620385.956

200720255.139

200819934.386

200920606.862

To resize chart data range, drag lower right corner of range.

Colon Resection Total Cost Regression, FE*All regressions include year dummies.

(1) No Controls(2) + Patient Variables(3) + Hospital VariablesHospital volume0.000149(1.01)-0.0000399(-0.31)-0.0000180(-0.14)Surgeon volume-0.00532***(-16.35)-0.00201***(-9.07)-0.00202***(-9.08)Patient VariablesXXNurse-to-patient ratio0.0104***(3.74)Hospital VariablesX

N160712149803148925

Colon Resection Total Cost Regression, FE*Regression includes year dummies and patient and hospital characteristics.

(4) + Safety IndicatorsHospital volume0.0000110(0.09)Postop hemorrhage or hematoma0.458***(15.73)Surgeon volume-0.00187***(-8.52)Postop physio metabol derangement0.525***(8.63)Complications of anesthesia-0.133*(-2.50)Postop respiratory failure0.631***(45.37)Decubitus ulcer0.320***(18.70)Postoperative pe or dvt0.365***(34.24)Death among surgical0.274***(15.55)Postoperative wound dehiscence0.677***(27.33)Foreign body left in during proc0.216*(2.03)Accidental puncture/laceration0.209***(22.38)Iatrogenic pneumothorax0.350***(9.11)Transfusion reaction-0.0720***(-10.43)Postoperative hip fracture0.614***(5.75)

N148925

Colon Resection Total Cost Regression, FE*Regression includes year dummies, patient and hospital characteristics, and PSIs.

(5) + Birkmeyer Processes of CareHospital volume-0.000101(-0.92)Daily Epidural Management0.0259***(5.05)Surgeon volume-0.000370(-1.87)Re-intubation0.260***(27.95)Incidental Appendectomy0.0303***(4.57)Transfusion/auto-transfusion0.0831***(27.13)Arterial Line0.157***(36.19)Critical Care Consultations0.331***(66.48)Central Venous Catheter0.00459(0.15)Total Parenteral Nutrition0.238***(42.61)Epidural Anesthesia-0.00146(-0.30)Inpatient Consultations0.242***(74.07)Frozen Section0.0632***(15.31)Operating Room Time0.0893***(36.53)Pulmonary Artery Catheter0.189***(13.15)

N138488

Policy ImplicationsSurgeon volume is more closely associated with average costs than hospital volume.Given that higher surgeon volume lowers mortality, should states report surgeon volumes & mortality?

Processes of care explain much of the surgeon volume-cost relationship.

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Conclusions*

Caveats*

*Note: Real costs per patient fell over time.

**These variables have not been included in the regression results for SEER data yet.*Natural log scale masks potentially large differences in mean costs. (inverse ln of 8.9 and 9.0 are $7,331 and $8.103 respectively). Predicted costs appear lower for patients in lower tertile of hosp volume (1 to 35/yr) relative to highest tertile (>65)*Mcare only values***Mcare only values*WANT TO INCLUDE THOSE NOT IN SAMPLE?*Mcare only values*