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Hospital Charges for Urologic Surgery Episodes of Care Are Rising Despite Declining Costs

      Abstract

      Objective

      To investigate the temporal relationship of hospital charges relative to recorded costs for surgical episodes of care.

      Patients and Methods

      This retrospective cohort study selected individuals who underwent any of 8 index urologic surgical procedures at 392 unique institutions from January 1, 2005, through December 31, 2015. For each surgical encounter, cost and charge data reported by hospitals were extracted and adjusted to 2016 US dollars. Trend analysis and multivariable logistic regression modeling were used to assess outcomes. The primary outcome was trend in median charge and cost. Secondary outcomes consisted of hospital characteristics associated with membership in the highest quartile of institutional charge-to-cost ratio.

      Results

      Cohort-level median cost per encounter trended down from $6824 in 2005 to $5586 in 2015 (P for trend<.001), and charges increased from $20,210 to $25,773 during the same period (P for trend<.001). Hospitals in the highest quartile of institutional charge-to-cost ratio were more likely to be safety net, nonteaching, urban, lower surgical volume, smaller, and located outside the Midwest (P<.001 for each characteristic).

      Conclusion

      The pricing trends shown herein could indicate some success in cost-containment for surgical episodes of care, although higher hospital charges may be increasingly used to bolster reimbursement from third-party payers and to compensate for escalating costs in other areas.

      Abbreviations and Acronyms:

      CCR (charge-to-cost ratio), CMS (Centers for Medicare and Medicaid Services), TDABC (time-driven activity-based costing)
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      Linked Article

      • Rising Health Care Charges: A Red Herring in a Value-Based Health Care World?
        Mayo Clinic ProceedingsVol. 94Issue 6
        • Preview
          In this issue of Mayo Clinic Proceedings, through an analysis of urologic surgical episodes of care across 392 hospitals, McClintock et al1 found that although cost per hospital episode of care decreased 20% from 2005 to 2015, the charges for these episodes of care increased more than 25% during this same period. Hospitals with the highest charge to cost ratios were more likely to be safety net, nonteaching, urban, lower surgical volume, smaller, and located outside the Midwest. The methods used in this study meet the traditional criteria for internal validity.
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