Why do sicker patients cost more? A charge-based analysis of patients undergoing prostatectomy

Hospitals are reimbursed a greater amount for Medicare patients undergoing prostate surgery who have comorbid and complicating conditions than for patients without these conditions, since the former have been shown to have higher hospital costs and charges. We attempted to determine whether the higher hospital charges are due to duration of hospital stay and/or intensity of services. We analyzed hospital discharge data from 799 patients undergoing radical or transurethral prostatectomy during a 3-year period (1988 to 1991) at 2 major teaching hospitals by examining length of stay (duration), charges per hospital day (intensity) and total charges per stay. Mean lengths of stay were significantly longer for sicker versus healthier patients undergoing radical prostatectomy (7.4 versus 6.8 days at hospital 1 and 8.9 versus 7.8 days at hospital 2, p < 0.05) and transurethral prostatectomy (3.5 versus 2.8 days at hospital 1 and 3.5 versus 2.5 days at hospital 2, p < 0.05). Total hospital charges were significantly higher for sicker versus healthier patients undergoing radical prostatectomy ($14,557 versus $13,357 at hospital 1 and $17,864 versus $16,080 at hospital 2, p < 0.05) and transurethral prostatectomy ($6,446 versus $5,012 at hospital 1 and $5,468 versus $3,710 at hospital 2, p < 0.05). However, sicker and healthier patients had similar charges per day for radical prostatectomy ($1,959 versus $1,961 at hospital 1 and $2,006 versus $2,073 at hospital 2, p not significant) and for transurethral prostatectomy ($1.839 versus $1,800 at hospital 1 and $1.544 versus $1,488 at hospital 2, p not significant). On specified hospital days the charges per day for room/nursing, medical/surgical supplies, laboratory services and pharmacy services were similar for patients with and without comorbid conditions. Patients who are more ill at admission remain hospitalized longer after prostatectomy. However, they do not receive more intense care during their stays. For these procedures duration and not intensity appears to be the primary determinant of higher hospital charges for sicker patients.