Surgonomics: the cost of cholecystectomy

Health care costs presently comprise more than one tenth of the nation's gross national product: One third of these expenditures are made by Medicare-Medicaid. National reimbursement changes for Medicare under a Diagnostic-Related Group system began October 1, 1983. Hospital charges (excluding physician charges) for all patients who underwent cholecystectomy without common bile duct exploration (Diagnostic-Related group 197 and 198) from Jan. 1, 1983 to March 31, 1983 were examined to quantify mean charges, variances, and components of hospital charges. Twenty-one patients (mean age 46.1 years) underwent elective cholecystectomy and 24 patients (mean age 64.9 years) underwent emergency cholecystectomy. The mean charge for elective cholecystectomy was $4763 +/- $1656; the mean length of stay (LOS) was 8.0 +/- 3.2 days. Low and high trim points were $3211 to $10,639 and 5 to 19 days LOS. Quartile cost analysis of the cost per patient showed that Q1 = 18.5%, Q2 = 21.2%, Q3 = 24.0%, and Q4 = 36.3%. Analysis of services showed that laboratory work (urinalysis, hematology, coagulation, microbiology, and biochemistry) averaged $451 +/- $298 (9.5% of total), room and board $2635 +/- $1044 (55.3% of total), operating and recovery room $924 +/- $167 (19.4% of total), and central supply-pharmacy $350 +/- $158 (7.4% of total). The mean charge for patients undergoing emergency cholecystectomy was $11,436 +/- $4185; mean LOS was 17.8 +/- 6.5 days. Low and high trim points were $6353 to $19,734; LOS was 9 to 30 days. Services as percent of total were laboratory 15.8%, room and board 53.7%, operating and recovery room 9.14%, central supply-pharmacy 7.3%, and radiology 8.2%. Several important findings are noted: (1) For a given disease there is marked variance of hospital charges. (2) Mean charges of emergency patients were 240% that of elective patients. (3) Consumption of services varies significantly within each group and between groups. This study demonstrates the importance of in depth financial analysis of therapies. This is a first step to identify the components of variance where reduction will not affect quality of care.