Rising hospital costs outpace reimbursement for common vascular procedures

Area of Science:

• Healthcare Economics
• Vascular Surgery
• Hospital Financial Management

Background:

• Hospitals face escalating operating costs due to the COVID-19 pandemic, including labor, supply chain, and inflation issues.
• Reimbursement rates have not kept pace with these rising costs, creating financial challenges for healthcare institutions.

Purpose of the Study:

• To analyze the financial impact of increased operating costs on commonly performed vascular procedures.
• To evaluate changes in hospital costs, reimbursement, and procedural margins from 2019 to 2022.

Main Methods:

• Financial data from 2019-2022 for five vascular procedures (AV fistula, AV graft, carotid endarterectomy, EVAR, lower extremity angiography with intervention) were analyzed.
• Direct hospital costs, reimbursement, and contribution to indirect costs were calculated and standardized per case.
• Data from a large tertiary health system were used to assess trends in procedural margins.

Main Results:

• Direct hospital costs for vascular procedures increased by approximately 32% from 2019 to 2022.
• Reimbursement for these procedures rose by only 21% during the same period, leading to an 11% decrease in procedural margins.
• The contribution to indirect costs per case decreased by 20%, from $1,470 in 2019 to $1,177 in 2020-2022.

Conclusions:

• Vascular procedure financial performance has significantly eroded, with margins declining substantially.
• Rising costs, not changes in utilization, are the primary drivers of worsening financial performance.
• There is an urgent need for updated reimbursement models that accurately reflect the costs of complex vascular care.