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Updated: Mar 16, 2026
Retzius-Sparing Robot-Assisted Radical Prostatectomy
Published on: May 19, 2022
Identifying Drivers of Episode Cost Variation With Radical Prostatectomy
Lindsey A Herrel1, John D Syrjamaki1, Susan M Linsell2
1Dow Division of Urological Health Services Research, Department of Urology, University of Michigan, Ann Arbor, MI; Michigan Value Collaborative, Ann Arbor, MI.
Objective:
To describe total and component radical prostatectomy (RP) episode costs across a diverse set of hospitals in Michigan, and examine drivers of variation in such payments.
Methods:
We identified Medicare and private payer patients undergoing RP from 2012 to 2014 from the claims-based registry maintained by the Michigan Value Collaborative, a statewide consortium that provides hospitals with price-standardized and risk-adjusted 90-day episode costs for common medical and surgical procedures. We divided hospitals into quartiles based on mean total episode cost for RP. Total episode costs were further classified into 4 payment categories: index hospitalization, professional services, readmissions, and postacute care. Component payments were then compared across high-cost and low-cost hospitals.
Results:
We identified 3077 patients undergoing RP in 42 hospitals. Mean 90-day total episode cost was $14,614, ranging from $13,043 to $16,749 across quartiles (28.4% difference, P < .001). Overall variation in total episode cost was divided nearly equally among readmissions (29%), postacute care (29%), and professional payments (26%). We noted significantly higher readmission ($1442 vs $288, P = .03) and postacute care payments at high-cost hospitals ($1686 vs $522, P = .002).
Conclusion:
Significant variation exists in 90-day total episode costs for RP, suggesting a potential target for bundled payments and other care improvement efforts. Focused efforts on reducing variation in readmissions and postacute care could improve cost-efficiency.
Insights
Radical prostatectomy costs vary significantly across Michigan hospitals. Reducing variation in readmissions and postacute care payments can improve cost-efficiency for this common prostate cancer surgery.
Area of Science:
- Health economics
- Urologic oncology
- Healthcare management
Background:
- Radical prostatectomy (RP) is a common procedure for prostate cancer.
- Significant cost variations exist for RP episodes across healthcare systems.
- Understanding these cost drivers is crucial for improving healthcare value.
Purpose of the Study:
- To analyze total and component costs of radical prostatectomy (RP) episodes.
- To identify factors driving cost variations in RP payments across Michigan hospitals.
Main Methods:
- Utilized claims data from Medicare and private payers for RP patients (2012-2014).
- Employed the Michigan Value Collaborative for price-standardized, risk-adjusted 90-day episode costs.
- Categorized costs into index hospitalization, professional services, readmissions, and postacute care.
Main Results:
- Identified 3077 RP patients across 42 hospitals with a mean 90-day episode cost of $14,614.
- Observed a 28.4% cost difference between the highest and lowest cost quartiles.
- Found readmissions (29%), postacute care (29%), and professional payments (26%) contributed nearly equally to total cost variation.
Conclusions:
- Significant variation in 90-day RP episode costs highlights opportunities for bundled payments.
- Targeting reductions in readmission and postacute care costs can enhance cost-efficiency.
- These findings can inform quality improvement initiatives and value-based care models.
