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AHRQ: Surgical Admissions Bring 48% of Hospital Revenue

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   March 04, 2014

Although 29% of all U.S. hospitalizations in 2011 included a surgical procedure, hospitalizations that involved surgery accounted for nearly half of all hospital costs, says a report from the Agency for Healthcare Research and Quality.

A survey of 2011 hospital costs finds that heart valve procedures were the most expensive operations performed in U.S. hospitals followed by coronary artery bypass procedures, small bowel resections, and cardiac pacemaker or defibrillator procedures.

Based on aggregated costs, however, spinal fusion surgeries drove in the most hospital revenue because of their higher cost per hospital stay and frequency, followed by knee arthroplasty, and percutaneous coronary angioplasty.

In fact, although 29% of all 38.6 million U.S. hospitalizations in 2011 included a surgical procedure, hospitalizations that involved surgery accounted for 48% of $387 billion in hospital costs.

These are findings from the Agency for Healthcare Research and Quality's recent 2011 update of its 2007 report on hospital costs published in 2010, or what payers paid on average for those procedures. The report is part of the AHRQ's Healthcare Cost and Utilization Project or H-Cup periodic reports on healthcare trends.

The recently published 2011 statistical brief found that hospital stays that included surgery were 2.5 times more expensive as stays for treatment of medical conditions without surgery. Surgical stays were longer, and were more likely to be elective rather than emergent, and were less likely to involve patients with extremely severe illnesses.

Compared with the 2007 report, the mean cost for hospital stays involving surgery rose 19.4%, from $13,900 to $16,600.

The report is often used to highlight areas for potential savings in healthcare costs. Regional variation in frequency of these surgeries provides strong evidence that surgeons in some parts of the country perform many procedures that are medically unnecessary. The financial data in the report does not include what physicians and surgeons were paid separately for their inpatient services.

As has long been the case, Cesarean sections were the most common surgical procedure, with more than 1.27 million performed in 2011, or nearly one in three of all births in a year, and accounted for 8.1% of all operating room procedures. The cost per patient was $5,900.

See also: Steep Drop Seen in Medically Unnecessary C-Sections

Numerous other studies have suggested that as many as half may be unnecessary, with numerous campaigns to curtail the practice underway in U.S. hospitals, especially before 39 weeks of gestation. C-sections have a higher death rate than natural childbirth, and impose a higher risk of infection.

The next most common procedures were circumcision, knee arthroplasty, and percutaneous coronary angioplasty.

In 2011, a study by the American College of Cardiology suggested that as many as 12% percutaneous coronary procedures were medically unnecessary, and the medical necessity for another 30% was unclear.

Likewise, studies suggest that physical therapy may make many knee surgeries unnecessary.

The AHRQ's 2011 lineup of the 20 most costly procedures based on aggregated costs for hospital stays "accounted for more than half (54%) of the 15.7 million OR procedures performed in 2011," the reports says.

AHRQ's 20 Most Costly Procedures, 2011

  1. Heart valve procedures ($53,400)
  2. Coronary artery bypass graft ($38,700)
  3. Small bowel resection ($34,500)
  4. Procedures related to cardiac pacemaker or cardioverter/defibrillator ($33,200)
  5. Spinal fusion ($27,600)
  6. Colorectal resection ($23,400)
  7. Lobectomy or pneumonectomy ($23,000)
  8. Amputation of lower extremity ($21,200)
  9. Debridement of wound, infection , or burn ($20,700)
  10. Percutaneous coronary angioplasty ($18,800)
  11. Hip replacement, total and partial ($17,200)
  12. Treatment for fracture or dislocation of hip and femur ($16,800)
  13. Knee arthroplasty ($15,900)
  14. Treatment for fracture or dislocation of lower extremity (other than hip or femur ($13,700)
  15. Cholecystectomy and common duct exploration ($12,900)
  16. Laminectomy, excision intervertebral disc ($11,500)
  17. Hysterectomy, abdominal and vaginal ($9,300)
  18. Appendectomy ($9,200)
  19. Cesarean section ($5,900)
  20. Circumcision ($2,000)

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