Cost and quality effects of outpatient cataract removal

In March 1985, a Health Care Financing Administration regulation went into effect requiring that cataract removal without exceptional circumstances be done in outpatient settings. In this paper, we study implications of that mandate by comparing the cost and quality outcomes of cataract removal in outpatient and inpatient settings both before and after the regulation went into effect. After controlling for population and physician differences for both study periods, we found by chi square significantly fewer infections, suture adjustments, and pain requiring medication among outpatients than inpatients. Log-linear regression, however, found that the only significant predictor was inpatient or outpatient, and only for infection (p = .02), with an odds ratio of 7.55 (95% confidence interval; .92-61.60). We also found lower Medicare payments for outpatients in both study periods. For the preregulation study groups, inpatient care was 34.8% more costly than outpatient care; the cost differential dropped to 32.5% for the postregulation study groups.