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Analysis of commercially negotiated hospital prices for spinal deformity surgery in the United States
Jonathan Wang1, Rodrigo Saad Berreta2, Eric Mao1
1School of Medicine, Johns Hopkins University, 733 N. Broadway, Baltimore, MD 21205, USA.
Background Context:
Spinal deformity surgery is among the most resource-intensive inpatient procedures in the United States. Despite increased transparency in commercial pricing, the structural drivers of cost variation for complex spine surgery remain unclear.
Purpose:
To characterize hospital-, market-, and community-level factors associated with variation in commercially negotiated prices for thoracolumbar spinal deformity surgery.
Study Design/Setting:
Cross-sectional analysis.
Patient Sample:
A total of 6,253 commercially negotiated prices for surgical thoracolumbar spinal deformity treatment (MS-DRG 456-458) were analyzed from 2,449 US hospitals across five major commercial payers.
Outcome Measures (Functional Measures):
The primary outcome measure was the log-transformed commercially negotiated price for thoracolumbar spinal deformity surgery.
Methods:
Hospital-level variables included bed size, teaching status, ownership, Case-Mix Index (CMI), and system affiliation. Market-level variables included wage index and concentration (Herfindahl-Hirschman Index). Community-level variables encompassed uninsured rate, Social Deprivation Index, racial composition, and population health metrics. Prices were log-transformed to address skewness. Multivariable linear regression utilized a hospital-payer-DRG contract-level dataset (n=6,253 contracts from 2,449 hospitals), reflecting 30.5% attrition from the initial 3,526 hospitals due to complete-case exclusion for missing covariates (eg, wage index and CMI).
Results:
The fully specified model, inclusive of state and insurer fixed effects (adjusted R²=0.244), revealed that system affiliation was the strongest predictor of higher prices, with affiliated hospitals charging 21.1% to 41.8% more (p<.001). Larger bed count (p=.008) and higher CMI (p=.015) were also associated with higher prices, whereas nonteaching hospitals (p=.042) had lower prices. Higher labor costs (p<.001) and lower market competition (7.5%-7.8% higher prices, p<.05) were each associated with higher prices. At the community level, higher uninsured rates (+13.4% per SD, p=.020) correlated with higher prices, whereas poorer health (-6.9% per SD, p=.045) and lower Social Deprivation Index (-4.1% per SD, p=.048) were linked to lower prices.
Conclusions:
Hospital system size, labor costs, market concentration, and community context were associated with substantial variation in negotiated prices for surgical spinal deformity treatment.
