Importance The effect of surgical complications on hospital finances is unclear.
Objective To determine the relationship between major surgical complications and per-encounter hospital costs and revenues by payer type.
Design, Setting, and Participants Retrospective analysis of administrative data for all inpatient surgical discharges during 2010 from a nonprofit 12-hospital system in the southern United States. Discharges were categorized by principal procedure and occurrence of 1 or more postsurgical complications, using International Classification of Diseases, Ninth Revision, diagnosis and procedure codes. Nine common surgical procedures and 10 major complications across 4 payer types were analyzed. Hospital costs and revenue at discharge were obtained from hospital accounting systems and classified by payer type.
Main Outcomes and Measures Hospital costs, revenues, and contribution margin (defined as revenue minus variable expenses) were compared for patients with and without surgical complications according to payer type.
Results Of 34 256 surgical discharges, 1820 patients (5.3%; 95% CI, 4.4%-6.4%) experienced 1 or more postsurgical complications. Compared with absence of complications, complications were associated with a $39 017 (95% CI, $20 069-$50 394; P < .001) higher contribution margin per patient with private insurance ($55 953 vs $16 936) and a $1749 (95% CI, $976-$3287; P < .001) higher contribution margin per patient with Medicare ($3629 vs $1880). For this hospital system in which private insurers covered 40% of patients (13 544), Medicare covered 45% (15 406), Medicaid covered 4% (1336), and self-payment covered 6% (2202), occurrence of complications was associated with an $8084 (95% CI, $4903-$9740; P < .001) higher contribution margin per patient ($15 726 vs $7642) and with a $7435 lower per-patient total margin (95% CI, $5103-$10 507; P 96 hours), triggering a 5-fold increase in Medicare reimbursement.14 On the other hand, some complications—such as certain “never event” complications—are no longer reimbursed by many payers.15,16 Previous estimates suggest that reducing surgical complications could harm hospital financial results but have been limited by use of small data sets or simplified surrogates such as patient length of stay.17- 20
We therefore conducted a study to measure the financial implications associated with postsurgical complications, using internal claims-administration and cost-accounting data of a nonprofit southern US hospital system with both higher- and lower-volume facilities located in urban and suburban/rural areas that included academic and nonacademic surgical departments. The goal was to evaluate the fixed and variable hospital costs and revenues associated with the occurrence of 1 or more major postsurgical complications for 4 primary payer types—private insurance, Medicare, Medicaid, and self-payment.
— source jama.jamanetwork.com