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Surgical Cost Disclosure and Operating Room Expenditures

Recent policy changes in the United States are attempting to reduce spending through the development of value-based payment systems that rely heavily on cost transparency.

A study published on Healio, on the past March 24th 2017 was conducted to investigate whether cost disclosure influences surgeons to reduce operating room expenditures.

In the beginning of 2012, surgeon scorecards were distributed at a regional healthcare system which reported the actual direct supply cost per case for a specific procedure and compared each surgeon’s data with those of the other surgeons in the same subspecialty – rotator cuff was chosen for analysis. This direct supply cost was calculated over 2-year period.

The findings suggested that providing physicians with knowledge about their surgical charges can alter per-care expenditures and during the study period, a total of $39,831 was saved.

The constant rising cost of healthcare in the United States has been gathering increasing national attention. Healthcare organizations and bundled medical payments have been implemented to combat the cost increases, in order to motivate healthcare providers and systems to decrease the cost of care and subsequently share any cost savings. For these processes to work, cost data must be readily available and the scorecards should report the surgeons’ quarterly  average costs for specific procedures. So, surgeons within the same subspecialty can be compared by their costs to the respective procedures.

The increasing cost of medical technology is one of the most significant contributors to higher healthcare spending for mostly 3 factors:

  1. The implementation of new medical technology accounts for 38% to 65% of increases in healthcare spending;
  2. New technology expands the range of treatment options which means replacing lower-cost options with higher-cost services;
  3. Expenses with medical procedures go mainly to hospitals and device manufactures, therefore, technology and hospital costs have a greater effect on rising overall healthcare costs than payments to physicians and clinical care providers.

The authors queried surgeons about their level of interest in the surgeon scorecard and where it influenced a change in their practice. The hypothesis was that public disclosure would influence surgeons to reduce operating room expenditures.

The healthcare environment is changing to a value-based system. The relation between cost and quality will place pressure on physicians and motivate a more cost-conscious approach to care givers. Of the participants on this study 56% changed the way they performed surgery, and 33% believed that reducing costs could drive referrals to their practice.

This study was great to determine  surgeons are interested in cost data and willing to adjust practice patterns to reduce operating room expenditures.


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