Abstract: PD14-01
Sources of Funding: National Cancer Institute (1-R01-CA-174768-01-A1) to Dr. David Miller

Introduction

Aiming to reduce variation in spending for common surgical procedures, Medicare and other payers have moved toward alternative reimbursement models such as episode-based bundled payments. However, little is known about the variation in 90-day episode spending for urological cancer surgery.

Methods

Using linked SEER-Medicare data, we identified a study cohort that included all Medicare beneficiaries who underwent cystectomy, prostatectomy, or nephrectomy for cancer from 2008 through 2011. We then calculated total episode payments by aggregating hospital, physician, and post-acute care claims from the index surgical hospitalization through 90 days post-discharge. Total payments were then compared to examine hospital level-variation within each procedure type. Next, we evaluated differences in hospital, physician, and post-acute care payments between the highest and lowest spending quartiles based on mean total episode payments. Finally, we assessed the &[Prime]payment signatures&[Prime] among the most expensive hospitals for each condition.

Results

From 2008 through 2011, we identified 90-day episodes of care for 1,768 cystectomies, 8,755 prostatectomies, and 4,305 nephrectomies. We observed wide variation in mean episode payments for all three conditions (cystectomy mean $31,836: range $22,322 to $41,706, prostatectomy mean $9,580: range $7,535 to $15,694, nephrectomy mean $16,554: range $10,857 to $25,675). For cystectomy, payments for the index hospitalization represented 50.1% of the total cost variation, whereas for prostatectomy the primary driver was physician fees (34.6%), and for nephrectomy post-acute care costs varied the greatest (37.7%). Each of the most expensive hospitals demonstrated a unique signature for the payment component that was driving high total episode payments (Figure).

Conclusions

Ninety-day episode payments for urological cancer surgery vary widely across hospitals in the United States. The key drivers of payment variation differ for individual procedures and hospitals. Accordingly, hospitals will need individualized data and clinical re-design strategies to succeed with implementation of episode-based payment models for urological cancer care.

Funding

National Cancer Institute (1-R01-CA-174768-01-A1) to Dr. David Miller