Surgeons’ Costs Differ Widely within the Same Hospital, Study Claims

May 15, 2006

Two surgeons at the same hospital perform the same operations on patients with similar medical histories. Their costs to the hospital are similar, right? Not necessarily.

The difference in cost could be as much as 45 percent.

New research from Washington University in St. Louis finds that even when controlling for complexity of the operation and patient risk, surgeons incurred a wide range of hospital costs.

The findings come out of the first study to analyze individual surgeon’s costs within the same hospital. According to the authors, the results have broad implications for rising health care costs.

“If it’s truly the case that one doctor generates lower costs for the same outcomes as another doctor, then it’s fair to say there is room for cost reductions,” says Bart Hamilton, professor of management, economy and entrepreneurship in the Olin School of Business. “The big problem we all face now is high rates of medical cost inflation. So this research could at least flag areas for potential improvement.”

Co-author Bruce Hall, assistant professor of surgery at Washington University’s medical school, says the varying costs could be the result of the differences in how surgeons utilize resources.

“Surgeons should be evaluated individually based on performance,” Hall says. “There’s no gold standard of how to do that. This study provides surgeons with their risk-adjusted and procedure-adjusted estimates of cost. It should enable them to examine whether they do things efficiently.”

The researchers say they hope hospitals can use their findings to improve quality and reduce costs. Some places, however, may have a tougher time leveling costs than others. In one case, a surgeon generated costs that were 45 percent lower than the standard, or “reference,” surgeon. Other surgeons’ costs were 39 percent lower.

“People may feel that a higher cost surgeon gets better results,” says Hall. “This study is standardized by surgical procedure and patient. So the question is not, does a more expensive surgeon have better results? We’re asking whether surgeons differ in their costs even when they are performing the same kinds of procedure on the same kinds of patients.”

“Hospitals may be able to generate cost efficiencies without sacrificing the quality of care in this area and use the monies saved for other things, such as prenatal care or the provision of care to the uninsured and poor.” Hamilton says.

The study was published in the April issue of the Journal of the American College of Surgeons.

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