Study shows disparity between hospital costs and reimbursement

Disparity Between Hospital Costs and Reimbursement Could Have Implications for Various Patient Populations and Delivery of Healthcare Services

Study results released today at the Society of NeuroInterventional Surgery (SNIS) 8^th Annual Meeting reveals that treatment costs for some neurovascular conditions remain higher than reimbursement in the form of Medicare payments.  For many hospitals across the nation, particularly those that are already financially strapped, these results shed additional light on an already sobering reality.

"In today's economy, many hospitals are feeling the strain of higher costs and stable or lower reimbursements," said Harry Cloft, M.D., Professor of Radiology & Neurosurgery at Mayo Clinic and study author.  A detailed assessment of both of these factors is necessary to helping us understand the impact on these institutions and explore the potential consequences for patient populations who benefit from these treatments, such as the elderly."

Two data sets were released in tandem with studies designed to assess costs vs. reimbursements for treatment (clipping and coiling) of unruptured aneurysms, as well as therapies to address carotid stenosis (carotid endarterectomy and carotid stenting) in asymptomatic patients.  For the first study, results showed that costs of both clipping and coiling have increased from 2001 to 2008.  Additionally, the median hospital costs for clipping and coiling were higher than the average Medicare payment in cases without complication, complicated by major morbidity and complicated by mortality.

For the second study, results showed that out of the total 181,200 carotid endarterectomy procedures (CEA) and 12,485 carotid artery stenting procedures (CAS), carotid artery stenting was associated with significantly higher costs than carotid endarterectomy.  For treatment with favorable outcomes, Medicare reimbursement was $1,318 and $3,241 less than CEA and CAS costs respectively.  Greater payment-to-cost disparities were noted for both CEA and CAS in patients with unfavorable outcomes.

As the collective hospital financial picture has come under greater scrutiny over the past five years, this data reinforces concerns voiced consistently by many across the healthcare industry, including the hospital executives who are faced with keeping hospitals financially healthy every day. According to survey results released earlier this year by the American College of Healthcare Executives, financial challenges, namely reimbursement issues, ranked first among hospital CEOs' top concerns in 2010, making it their primary concern for the last six years.  

"When considering how to maximize healthcare for every American, we must consider the whole picture," said Cloft.  "Scientific advancement in many fields, including the field of neurointervention, is at a peak, but all of the various healthcare system stakeholders must work together to ensure that hospitals are alleviated of the financial pressures that can stymie these innovative treatments and impede access to enhanced quality of care."

Study Methodology

In the analysis of aneurysm costs, ICD-9 codes were cross-matched with procedure codes for clipping or coiling of cerebral aneurysms, and excluded all patients with subarachnoid hemorrhage and intracerebral hemorrhage.  Hospital costs for 2008 were correlated with age, gender, and discharge status, and compared to Medicare payments.

For the study on carotid endarterectomy and carotid stenting, average CMS reimbursement rates for CEA and CAS were obtained from CMS.gov.  Annual trends in hospital costs were analyzed by Sen's slope analysis, and associations between length of stay and hospital costs with respect to gender, age, discharge status, complication type, and co-morbidity were analyzed using the Wilcoxon rank sum test.  Least-squares regression models were used to predict which variables had the greatest impact on length of stay and hospital costs.