Variations in Post-Acute Surgical Care Signal Opportunities to Cut Costs

Costs for episodes of care for three common surgeries may vary threefold based on post-surgical physician orders. Better guidance on care standards may help.

Whether to inpatient rehab, a skilled nursing facility, or home with some help for outpatient rehab, where post-surgical patients are sent to recover has a lot to do with healthcare spending.

That finding makes intuitive sense, but a study by University of Michigan researchers published in Health Affairs details huge variations in where patients with similar severities are sent based on geography and standards of practice, among other variables.

And those variables don't come cheap. Episodes of care resulting from a similar surgery on a similar patient at one hospital can cost as much as three times as much at another.

Getting the Value Out of Postacute Care

The researchers looked at the impact of sending patients home with some in-house or outpatient help versus sending them to a skilled nursing or inpatient rehabilitation center.

They examined hundreds of thousands of patients covered by traditional Medicare between 2009 and 2012 in the 90 days following one of three common surgeries: hip replacement, heart bypass surgery, and colectomy.

Part of the reason for the wide variation is that physicians have little official guidance or objective measurements to help them decide which patients will do best in each setting, says Lena Chen, MD, the study's lead author and an assistant professor at the University of Michigan Medical School.

"Based on these findings and others, we can see that it's going to be really important to find out which type of care setting will have value to which patients, and when," she said in a media statement.

The need for such tools is evident because hospitals are increasingly being penalized or rewarded financially by Medicare and other payers for the total cost of their surgical patients' care. Algorithms and better guidance on care standards may be able to help this process in the future. One example is CMS's tool called the Continuity Assessment Record and Evaluation (CARE) Item Set.

Other findings by the University of Michigan researchers:

• Even though skilled nursing facilities charge for every day that a patient is there, the length of stay in such facilities didn't matter as much as the decision to send a patient to such a facility or to a rehab facility, compared with the lower-cost home-based or outpatient care.
• High-cost hospitals and their patients were more likely than other hospitals and patients to choose skilled nursing and inpatient rehabilitation settings. After a particular post-acute care setting was chosen, the intensity of utilization did not explain meaningful differences in spending.
• Compared to hospitals in the lowest spending quintile, those in the highest spending quintile for total hip replacement were also more likely to be teaching hospitals and for-profit hospitals and to be located in the Northeast.
• Variation in price-standardized, risk-adjusted payments for post-acute care was due more to choice of care settings than to the intensity of the care.

Chen is calling for more research on which patients get the most benefit from what post-acute care settings in part because the potential return on investment is so high.

"Once providers better understand what setting has value and when, the payment system can better incentivize appropriate decisions," she said. "Right now, we know so little about what is the best, and who gets the most benefit from the highest-cost options."