Outpatient Urological Surgery Costs Significantly Less When Performed in Physician Offices and Ambulatory Care Centers

Shifting care from hospital outpatient departments could save millions, new study in The Journal of Urology® reports

Philadelphia, PA, October 22, 2012 – More and more outpatient surgical procedures are being done at nonhospital-based facilities such as freestanding ambulatory surgical centers and physician offices, instead of at hospital-based outpatient departments. A new study comparing the cost to Medicare of 22 urological surgical procedures performed in each setting has found that ambulatory surgery centers and physician offices are less costly than hospitals. The results are published in the December issue of The Journal of Urology.

“Our findings indicate that for comparable procedures, hospitals were associated with significantly higher payments than ambulatory surgical centers and the physician office,” says lead investigator John M. Hollingsworth, MD, Department of Urology, Dow Division of Health Services Research and Center for Healthcare Outcomes & Policy, University of Michigan, Ann Arbor. “In fact, offloading 50% of the procedures from hospitals to ambulatory surgery centers would save the Medicare program nearly $66 million annually.”

Investigators examined national Medicare claims from 1998 to 2006, identifying elderly patients who underwent one of 22 common outpatient urological procedures. They measured all relevant payments made within 30 days of the procedure to capture any costs that may have resulted from postoperative complications and unexpected hospitalizations. They assessed the extent to which hospital payments, professional services, and facility payments vary by the ambulatory care setting where a procedure is performed.

The authors found that 88% of the procedures examined were performed at an ambulatory surgical center or physician office. Ambulatory surgical centers and physician offices were less costly than hospitals for all but two of the procedures. For instance, average adjusted total payments for urodynamic procedures performed at ambulatory surgical centers were less than a third of those done in hospitals. Compared to hospitals, office based prostate biopsies were nearly 75% less costly. While physician offices tended to be more cost-efficient than ambulatory surgical centers, the difference was not significant. Facility payments tended to be the driver of payment differences.

The average Charlson score, which measures how severely ill a patient is, was lower for patients treated in a nonhospital setting. Dr. Hollingsworth notes that low risk patients may be more likely to be treated in an ambulatory setting, and the results may reflect the lower cost of treating patients who are less seriously ill. While Medicare claims data may not be generalizable to other payers, Dr. Hollingsworth says, “the Medicare program accounts for 19% of total national spending on personal health services, making it the single largest payer in the United States. Therefore, with regard to health care financing, as Medicare goes, so goes the nation.”

Dr. Hollingsworth and his colleagues observe that if the cost differences between nonhospital and hospital settings are unjustified, e.g., due to inefficiencies rather than case mix, service, or content, then Medicare might base payment in the future on costs at the least expensive setting. “Alternatively, Medicare may bundle reimbursements to facilities and physicians involved in care around a single outpatient surgical episode into a single payment. The observed variation in facilities payments suggests opportunities for improvement,” they conclude.

# # #

Notes for editors

“Medicare Payments for Outpatient Urological Surgery by Location of Care,” by John M. Hollingsworth, Chris S. Saigal, Julie C. Lai, Rodney L. Dunn, Seth A. Strope, Brent K Hollenbeck, and the Urologic Diseases in America project (DOI: 10.1016/j.juro.2012.08.031).  The Journal of Urology, Volume 188, Issue 6 (December, 2012).

Supported by Grant R01HS018726 from the Agency for Healthcare Research and Quality

Full text of the article is available to credentialed journalists upon request; contact Linda Gruner at +1-212-633-3923 or jumedia@elsevier.com to obtain copies. To schedule an interview with the authors contact Shantell M. Kirkendoll, Senior Public Relations Representative, University of Michigan Health System, 734-764-2220 or smkirk@umich.edu.

About The Journal of Urology®

Established in 1917, The Journal of Urology (www.jurology.com) is the official journal of the American Urological Association (www.auanet.org). It is the most widely read and highly cited journal in the field. It brings to its readership all the clinically relevant information needed to stay at the forefront of this dynamic field. This top-ranking journal presents investigative studies on critical areas of research and practice, survey articles providing short condensations of the best and most important urology literature worldwide and practice-oriented reports on interesting clinical observations.

About Elsevier
Elsevier is a world-leading provider of information solutions that enhance the performance of science, health, and technology professionals, empowering them to make better decisions, deliver better care, and sometimes make groundbreaking discoveries that advance the boundaries of knowledge and human progress. Elsevier provides web-based, digital solutions — among them ScienceDirect, Scopus, Research Intelligence and ClinicalKey— and publishes over 2,500 journals, including The Lancet and Cell, and more than 35,000 book titles, including a number of iconic reference works. Elsevier is part of RELX Group, a world-leading provider of information and analytics for professional and business customers across industries. www.elsevier.com

Media contact

Linda Gruner

Elsevier

+1-212-633-3923

jumedia@elsevier.com