The Balanced Budget Act: potential implications for the practice of vascular surgery

Previous study results have shown a favorable impact on stroke rate with an increasing hospital volume of carotid endarterectomies (CEAs). This is not only the most frequently performed peripheral vascular procedure in the United States but also perhaps the most widely dispersed procedure relative to hospital type. Medical centers have adopted various strategies to lower the cost of hospitalization by reducing the length of stay (LOS), the major component of hospital cost. By 2002, the Balanced Budget Act is projected to reduce Medicare provider payments to academic medical centers (AMCs) by 15.5%, a reduction that is twice that for minor or nonteaching hospitals. We assessed the relationships between hospital costs, CEA volume, and stroke-mortality rates in AMCs and non-AMCs in Massachusetts.

With patient level data from the Massachusetts Division of Health Care Finance and Policy and with hospital cost and charge reports from the Health Care Financing Administration, HealthShare Technology provided data for all the patients discharged from a Massachusetts hospital who underwent CEA (n = 10,211) during the fiscal years 1995, 1996, and 1997, including cost, LOS, and disposition. The outcomes were further defined with in-hospital stroke and mortality rates. Five high volume AMCs (HVAMCs) were compared with all other nonacademic hospitals, which were further subdivided by annual volume into high volume non-AMCs (> or =50 cases), medium volume non-AMCs (24-49 cases), and low volume non-AMCs (12-23 cases). Statistical analysis was performed with analysis of variance to compare the means of all the cost and LOS data, and chi(2) test was used for comparison of incidence (significance assumed for P < or =. 05).

Hospital costs were comparable among the four hospital types during individual years and averaged $6200, but HVAMCs were significantly more expensive overall, with a mean cost of $7882. The only centers to decrease their costs during the years evaluated were the HVAMCs, from $8706 to $6784. Length of stay did not differ among the groups in any year or overall, with a mean of 3.8 days, but did decrease between years at HVAMCs from 3.9 to 2.5 days. The combined stroke-mortality rates were significantly less at the HVAMCs (0.9%) than at either the high volume non-AMCs (1.9%) or the medium volume non-AMCs (2.5%). There was no significance in the analysis results of all the data within the low volume non-AMCs.

Patients in HVAMCs have the best outcomes after CEA. Despite the achievement of significant efficiencies, AMCs have a small cushion to reduce further either LOS or resources to maintain a competitive cost position and to compensate for the fixed expenses of academic medicine. The Balanced Budget Act raises an equity concern for AMCs because it differentially affects the centers with the best outcomes. The financial implication of this may be a direct incentive for procedures to be done in centers with less optimal outcomes.