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Cost Variation Within Spinal Fusion Payment Groups.

David J Wright1, Dana B Mukamel2, Sheldon Greenfield3

  • 1Irvine School of Medicine, University of California, Orange County, CA.

Spine
|April 26, 2016
PubMed
Summary
This summary is machine-generated.

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Spinal fusion surgery costs vary significantly within diagnosis-related groups (DRGs), exceeding benchmarks from total joint arthroplasty. This cost variation may impact hospital finances and patient access to care.

Area of Science:

  • Health Economics
  • Spine Surgery
  • Healthcare Policy

Background:

  • Medicare reimburses hospitals fixed amounts for spinal fusion surgery based on diagnosis-related groups (DRGs).
  • This payment model assumes homogenous resource use within DRGs, which may not reflect the reality of spinal fusion surgery.
  • Previous research in total joint arthroplasty (TJA) indicated significant cost variations within DRGs, leading to financial losses for hospitals.

Purpose of the Study:

  • To investigate the extent of cost variation within current spinal fusion diagnosis-related groups (DRGs).
  • To compare the cost variation in spinal fusion DRGs to established benchmarks from total joint arthroplasty (TJA).

Main Methods:

  • Retrospective analysis of a large administrative database (2011 Nationwide Inpatient Sample).

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  • Included patients undergoing spinal fusion (DRGs 453-460) and TJA (DRGs 466-470).
  • Calculated the coefficient of variation (CV) for direct hospital costs within each DRG and compared spinal fusion CVs to a TJA benchmark.

    • Main Results:

    • Cost variation within spinal fusion DRGs, measured by CV, ranged from 44.16 to 52.6.
    • These CVs were significantly higher than the CV of 38.2 observed in the TJA benchmark group (P < 0.0001).

    Conclusions:

    • Significant cost variation exists within spinal fusion DRGs, similar to TJA.
    • This variation may lead to discrepancies between hospital costs and Medicare reimbursement, potentially causing financial strain and affecting patient access to care.
    • Further research is needed to identify cost drivers and refine DRG classifications for more equitable reimbursement and access.