The author of a new HealthGrades study of bariatric surgery says the wild disparity in cost and quality for the procedures provide a good example of the "twisted market" that often drives elective medicine.
The HealthGrades study of 153,355 bariatric surgeries in 19 states found that, even though the majority of bariatric surgeries are elective, there is little evidence that consumers are demanding a better product at a lower price. The disregard for price may account for the eye-popping disparities in cost and outcomes.
Bariatric surgery in California costs on average about $52,224, and about $14,577 in Maryland, while bariatric surgery patients treated at top-rated hospitals have, on average a 67% lower chance of experiencing serious complications compared to patients who receive treatment at poorly rated hospitals.
"When we saw the numbers we thought that can't possibly be right so we went back and checked it again. They're right," says Rick May, MD, a senior physician at Golden, CO-based HealthGrades, and a coauthor of the Fourth Annual Bariatric Surgery Trends in American Hospitals Study.
May says the study illustrates a key cost driver for the nation's healthcare delivery—the lack of incentive among insured consumers to keep their own healthcare costs low.
"The purchaser who is going out and selecting the provider and the procedure is not the person putting out most of the money. Because of that, it drives a really twisted market," May says. "You are seeing it across healthcare. When you have consumers who are able to select their healthcare with little impact on what they pay, they're like anybody. If you could buy a car and somebody else was going to cover 90% of the cost, you are probably going to buy an Escalade. But if you are paying more of the cost, you will be much more discriminating and realistic about what you purchase."
Another dictum of the free market—you get what you pay for—is also challenged in the HealthGrades study, which found that higher costs don't translate into better outcomes; quite the opposite, in fact.
"There is a correlation, but it's an inverse correlation," May says. "The more expensive places for bariatric surgery tend to have higher complications."
That makes sense when you consider that bad outcomes increase costs. May says the biggest driver of outcomes is experience. HealthGrades found that high bariatric surgery volumes correlate with better outcomes. Hospitals with more than 375 bariatric cases in three years had a 32% lower risk of in-patient complications than lower-volume hospitals with less than 75 cases over three years.
For patients, that expertise translates into shorter hospital stays. Patients having surgery at top-rated hospitals, on average, spent 2.15 days in the hospital. Patients having surgery in low-rated hospitals spent 2.72 days in the hospital. A state-by-state comparison is even more dramatic. Vermont patients, on average, spent 3.26 days in the hospital, while Nevada patients spent 1.56 days in the hospital.
"The really good programs are really good at multiple levels," May says. "They're really dedicated to making a better product. They are looking at the whole spectrum of care. They are looking at proper patient selection. They're looking at educating patients before surgery. They're looking at what are they going to do to optimize the patients medically before they bring them into the hospital. They are standardizing their post-operative care. They are looking at providing good diets. They've been very proactive at addressing everything soup to nuts."
The study analyzed outcomes in 19 states that provide all-payer information for the most common gastric bypass procedures, such as less-invasive laparoscopic procedures, including gastric banding, malabsorbtive procedures, and combined malabsorbtive/restrictive procedures.
May says the disparities in price and outcomes may widen as more insurance companies cover the procedure, more and more increasingly overweight Americans opt for it, and more hospitals, surgeons, and other providers take up the lucrative business line with little if any experience in the field.
"Bariatrics is exploding in terms of how many surgeries are being done because obesity is growing off the charts and that drives a huge expansion in a procedure," May says. "That forces another segment of the provider community to start doing stuff they haven't been doing before. Now you are talking about a huge range of experience between hospitals that have done thousands of these procedures verses hospitals that have done 10, or surgeons that have done hundreds of these procedures versus surgeons who've done five."
If the consumer isn't considering the cost of the procedure, May says maybe the insurance companies should more-aggressively take it upon themselves to find better deals in other hospitals and states. "Frankly, if you are a health insurance company in California, you are better off putting your patients in a first-class seat and flying them to Maryland and having the procedure there and saving a pile of money," he says.