Abstract
Background: Although the price hospitals charge for operations has broad financial implications, hospital pricing is not subject to regulation. We sought to characterize national variation in hospital price markup for major cardiothoracic and gastrointestinal operations and to evaluate perioperative outcomes of hospitals relative to hospital price markup. Methods: All hospitals in which a patient underwent a cardiothoracic or gastrointestinal procedure were identified using the Nationwide Inpatient Sample for 2012. Markup ratios (ratio of charges to costs) for the total cost of hospitalization were compared across hospitals. Risk-adjusted morbidity, failure-to-rescue, and mortality were calculated using multivariable, hierarchical logistic regression. Results: Among the 3,498 hospitals identified, markup ratios ranged from 0.5-12.2, with a median markup ratio of 2.8 (interquartile range 2.7-3.9). For the 888 hospitals with extreme markup (greatest markup ratio quartile: markup ratio >3.9), the median markup ratio was 4.9 (interquartile range 4.3-6.0), with 10% of these hospitals billing more than 7 times the Medicare-allowable costs (markup ratio ≥7.25). Extreme markup hospitals were more often large (46.3% vs 33.8%, P <.001), urban, nonteaching centers (57.0% vs 37.9%, P <.001), and located in the Southern (46.4% vs 32.8%, P <.001) or Western (27.8% vs 17.6%, P <.001) regions of the United States. Of the 639 investor-owned, for-profit hospitals, 401 hospitals (62.8%) had an extreme markup ratio compared with 19.3% (n = 452) and 6.8% (n = 35) of nonprofit and government hospitals, respectively. Perioperative morbidity (32.7% vs 26.4%, P <.001) was greater at extreme markup hospitals. Conclusion: There is wide variation in hospital markup for cardiothoracic and gastrointestinal procedures, with approximately a quarter of hospital charges being 4 times greater than the actual cost of hospitalization. Hospitals with an extreme markup had greater perioperative morbidity.
| Original language | English (US) |
|---|---|
| Journal | Surgery |
| DOIs | |
| State | Accepted/In press - 2016 |
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ASJC Scopus subject areas
- Surgery
Cite this
Hospital markup and operation outcomes in the United States. / Gani, Faiz; Ejaz, Aslam; Makary, Martin A; Pawlik, Timothy M.
In: Surgery, 2016.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Hospital markup and operation outcomes in the United States
AU - Gani, Faiz
AU - Ejaz, Aslam
AU - Makary, Martin A
AU - Pawlik, Timothy M.
PY - 2016
Y1 - 2016
N2 - Background: Although the price hospitals charge for operations has broad financial implications, hospital pricing is not subject to regulation. We sought to characterize national variation in hospital price markup for major cardiothoracic and gastrointestinal operations and to evaluate perioperative outcomes of hospitals relative to hospital price markup. Methods: All hospitals in which a patient underwent a cardiothoracic or gastrointestinal procedure were identified using the Nationwide Inpatient Sample for 2012. Markup ratios (ratio of charges to costs) for the total cost of hospitalization were compared across hospitals. Risk-adjusted morbidity, failure-to-rescue, and mortality were calculated using multivariable, hierarchical logistic regression. Results: Among the 3,498 hospitals identified, markup ratios ranged from 0.5-12.2, with a median markup ratio of 2.8 (interquartile range 2.7-3.9). For the 888 hospitals with extreme markup (greatest markup ratio quartile: markup ratio >3.9), the median markup ratio was 4.9 (interquartile range 4.3-6.0), with 10% of these hospitals billing more than 7 times the Medicare-allowable costs (markup ratio ≥7.25). Extreme markup hospitals were more often large (46.3% vs 33.8%, P <.001), urban, nonteaching centers (57.0% vs 37.9%, P <.001), and located in the Southern (46.4% vs 32.8%, P <.001) or Western (27.8% vs 17.6%, P <.001) regions of the United States. Of the 639 investor-owned, for-profit hospitals, 401 hospitals (62.8%) had an extreme markup ratio compared with 19.3% (n = 452) and 6.8% (n = 35) of nonprofit and government hospitals, respectively. Perioperative morbidity (32.7% vs 26.4%, P <.001) was greater at extreme markup hospitals. Conclusion: There is wide variation in hospital markup for cardiothoracic and gastrointestinal procedures, with approximately a quarter of hospital charges being 4 times greater than the actual cost of hospitalization. Hospitals with an extreme markup had greater perioperative morbidity.
AB - Background: Although the price hospitals charge for operations has broad financial implications, hospital pricing is not subject to regulation. We sought to characterize national variation in hospital price markup for major cardiothoracic and gastrointestinal operations and to evaluate perioperative outcomes of hospitals relative to hospital price markup. Methods: All hospitals in which a patient underwent a cardiothoracic or gastrointestinal procedure were identified using the Nationwide Inpatient Sample for 2012. Markup ratios (ratio of charges to costs) for the total cost of hospitalization were compared across hospitals. Risk-adjusted morbidity, failure-to-rescue, and mortality were calculated using multivariable, hierarchical logistic regression. Results: Among the 3,498 hospitals identified, markup ratios ranged from 0.5-12.2, with a median markup ratio of 2.8 (interquartile range 2.7-3.9). For the 888 hospitals with extreme markup (greatest markup ratio quartile: markup ratio >3.9), the median markup ratio was 4.9 (interquartile range 4.3-6.0), with 10% of these hospitals billing more than 7 times the Medicare-allowable costs (markup ratio ≥7.25). Extreme markup hospitals were more often large (46.3% vs 33.8%, P <.001), urban, nonteaching centers (57.0% vs 37.9%, P <.001), and located in the Southern (46.4% vs 32.8%, P <.001) or Western (27.8% vs 17.6%, P <.001) regions of the United States. Of the 639 investor-owned, for-profit hospitals, 401 hospitals (62.8%) had an extreme markup ratio compared with 19.3% (n = 452) and 6.8% (n = 35) of nonprofit and government hospitals, respectively. Perioperative morbidity (32.7% vs 26.4%, P <.001) was greater at extreme markup hospitals. Conclusion: There is wide variation in hospital markup for cardiothoracic and gastrointestinal procedures, with approximately a quarter of hospital charges being 4 times greater than the actual cost of hospitalization. Hospitals with an extreme markup had greater perioperative morbidity.
UR - http://www.scopus.com/inward/record.url?scp=84964941415&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84964941415&partnerID=8YFLogxK
U2 - 10.1016/j.surg.2016.03.014
DO - 10.1016/j.surg.2016.03.014
M3 - Article
C2 - 27157120
AN - SCOPUS:84964941415
JO - Surgery
JF - Surgery
SN - 0039-6060
ER -