Impact of cost valuation on cost-effectiveness in adult spine deformity surgery

Jeffrey L. Gum, Richard Hostin, Chessie Robinson, Michael P. Kelly, Leah Yacat Carreon, David W. Polly, R. Shay Bess, Douglas C. Burton, Christopher I. Shaffrey, Justin S. Smith, Virginie LaFage, Frank J. Schwab, Christopher P. Ames, Steven D. Glassman

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

Background Context Over the past decade, the number of adult spinal deformity (ASD) surgeries has more than doubled in the United States. The complex surgeries needed to manage ASD are associated with significant resource utilization and high cost, making them a primary target for increased scrutiny. Accordingly, it is important to not only demonstrate value in ASD surgery as clinical effectiveness but also to translate outcome assessment to cost-effectiveness. Purpose To compare the difference between Medicare allowable rates and the actual, direct hospital costs for ASD surgeries. Study Design Longitudinal cohort. Patient Sample Consecutive patients enrolled in an ASD database from a single institution. Outcome Measures Short Form (SF)-6D. Methods Consecutive patients enrolled in an ASD database from a single institution from 2008 to 2013 were identified. Direct hospital costs were collected from hospital administrative records for the entire inpatient episode of surgical care. Medicare allowable rates were calculated for the same inpatient stays using the year-appropriate Center for Medicare-Medicaid Services Inpatient Pricer Payment System Tool. The SF-6D, a utility index derived from the SF-36v1, was used to determine quality-adjusted life years (QALY). Costs and QALYs were discounted at 3.5% annually. Results Of 580 surgical ASD patients eligible for 2-year follow up, 346 (60%) had complete baseline and 2-year data, and 60 were Medicare beneficiaries comprising the cohort for the present study. Mean SF-6D gained is 0.10 during year 1 after surgery and 0.02 at year 2, resulting in a cumulative SF-6D gain of 0.12 over 2 years. Mean Medicare allowable rate over the 2 years is $82,050 (range $42,383 to $220,749) and mean direct cost is $99,114 (range $28,447 to $217,717). Mean cost per QALY over 2 years is $683,750 using Medicare allowable rates and $825,950 using direct costs. This difference of $17,181 between the 2 cost calculation represents a 17% difference, which was statistically significant (p<.001). Conclusions There is a significant difference in direct hospital costs versus Medicare allowable rates in ASD surgery and in turn, there is a similar difference in the cost per QALY calculation. Utilizing Medicare allowable rates not only underestimates (17%) the cost of ASD surgery, but it also creates inaccurate and unrealistic expectations for researchers and policymakers.

Original languageEnglish (US)
Pages (from-to)96-101
Number of pages6
JournalSpine Journal
Volume17
Issue number1
DOIs
StatePublished - Jan 1 2017

Bibliographical note

Funding Information:
Author disclosures: JLG: Consulting: Medtronic (C), Alphatec (B), Stryker (B), LifeSpine (C), Pacira (A), PAKMed (A), Gerson Lehrman Group (A), outside the submitted work; Speaking and/or Teaching Arrangements: MiMedx (Honorarium) (A), outside the submitted work; Trips/Travel: Acuity (A), Medtronic (B, Paid to the institution), outside the submitted work; Scientific Advisory Board/Other Office: American Journal of Orthopaedics (Unpaid position), The Spine Journal (Reviewer) (Unpaid position), outside the submitted work; Research Support (Staff/Materials): International Spine Study Group Foundation (Paid to the institution), Intellirod Spine Inc. (Paid to the institution), Integra Lifesciences (D, paid to the institution), NuVasive (Database support) (Paid to the institution), outside the submitted work; Grants: Fischer Owen Fund (B), outside the submitted work; Fellowship Support: OREF, AOSPINE, outside the submitted work. RH: Consulting: DePuy Spine (D), outside the submitted work; Grants: NuVasive (F, Paid to the institution), Seeger (F, Paid to the institution), DJO (E, Paid to the institution), DePuy Spine (F, Paid to the institution), K2M (D, Paid to the institution), outside the submitted work. CR: Nothing to disclose. MPK: Grants: AO Spine (D, Paid to the institution), Barnes Jewish Foundation (C, Paid to the institution), Orthopedic Research Education Foundation (D, Paid to the institution), Cervical Spine Research Society (B, Paid to the institution), outside the submitted work; Fellowship Support: AO Spine (E, Paid to the institution), Orthopedic Research Education Foundation (D, Paid to the institution), outside the submitted work. LYC: Trips/Travel: University of Louisville Institutional Review Board (Annual required Continuing Education for Institutional Review Board Members Association for Collaborative Spine Research) (B), Center for Spine Surgery and Research, region of Southern Denmark (Travel and accommodations for Study Planning Meetings June 2012, February 2014, and June 2014) (B), Study Planning Meetings October 2013, May 2014, September 2014, December 2014, May 2015, August 2015 (Travel and accommodations) (C), outside the submitted work; Scientific Advisory Board/Other Office: Medtronic (Honoraria for participation in Global Evidence Advisory Board, October 2012 and April 2013) (B), National Institutes of Health (Honoraria for participation in Review Panel, October 2012) (A), Children's Tumor Foundation (Honoraria for participation in Review Panel, April 2013) (A), Spine (Editorial Advisory Board) (None), The Spine Journal (Editorial Advisory Board) (None), University of Louisville Institutional Review Board (Member) (None), Scoliosis Research Society (Research Committee Member) (None), outside the submitted work; Research Support (Staff/Materials): Orthopedic Research and Educational Fund (A, Paid to the institution), Norton Healthcare (D, Paid to the institution), Scoliosis Research Society (A, Paid to the institution), outside the submitted work; Grants: NuVasive (Provides funds directly to database company. No funds are paid directly to individual or individual's institution, June 2012 to April 2015), Fischer-Owen/Kotcamp Fund (B, Payment of Open Access publication fee for Scoliosis Research Society Members Attitudes Towards Physical Therapy and Physiotherapeutic Scoliosis Specific Exercises for Adolescent Idiopathic Scoliosis), outside the submitted work. DWP: Nothing to disclose. RSB: Royalties: Pioneer (B), outside the submitted work; Consulting: K2 Medical (B), NuVasive (Nonfinancial), Innovasis (Nonfinancial), Allosource (B), outside the submitted work; Grants: K2 Medical (F, paid to the institution), NuVasive (F, paid to the institution), Innovasis (F, paid to the institution), DePuy Synthes (E, paid to the institution), outside the submitted work. DCB: Royalties: DePuy Spine (B, Paid to the author and the institution), outside the submitted work; Consulting: DePuy Spine (None), outside the submitted work; Board of Directors: University of Kansas Physicians, Inc. (None), International Spine Study Group (None), outside the submitted work; Research Support (Staff/Materials): DePuy Spine (B, Paid to the institution), outside the submitted work. CIS: Royalties: Biomet (F, Paid to the author and the institution), Medtronic (F, Paid to the author and the institution), NuVasive (E, Paid to the author and the institution), outside the submitted work; Stock Ownership: NuVasive (F), outside the submitted work; Consulting: K2M (C), Stryker (D), outside the submitted work; Board of Directors: AANS and CSRS (None), outside the submitted work; Grants: NIH (C, Paid to the institution), Department of Defense (F, Paid to the institution), ISSG Foundation (D, Paid to the institution), outside the submitted work; Fellowship Support: AO (E, Paid to the institution), NREF (E, Paid to the institution), outside the submitted work. JSS: Royalties: Biomet (C, Paid to the author and the institution), outside the submitted work; Consulting: Biomet (D), NuVasive (B), Cerapedics (B), Medtronic (None), DePuy (None), outside the submitted work; Speaking and/or Teaching Arrangements: K2M (B), DePuy (B), outside the submitted work; Grants: DePuy/ISSG (C, Paid to the institution), outside the submitted work; Fellowship Support: NREF (E, Paid to the institution), AO (E, Paid to the institution), outside the submitted work. VL: Stock Ownership: Nemaris, Inc. (20% shareholder), outside the submitted work; Speaking and/or Teaching Arrangements: Nemaris, Inc. (20% shareholder), MSD (A), Medicrea (B), DePuy (B), outside the submitted work; Board of Directors: Nemaris, Inc. (20% shareholder), outside the submitted work; Grants: SRS (D, Paid to the institution), NIH (C, Paid to the institution), DePuy Spine (Paid through ISSGF) (H, Paid to the institution), outside the submitted work. FJS: Royalties: K2M (D), MSD (D), outside the submitted work; Stock Ownership: Nemaris, Inc. (30% shareholder), outside the submitted work; Consulting: Medicrea (D), K2M (B), MSD (B), Zimmer Biomet (B), NuVasive (B), outside the submitted work; Speaking and/or Teaching Arrangements: Medicrea (B), NuVasive (B), K2M (B), Zimmer Biomet (B), MSD (B), outside the submitted work; Board of Directors: Nemaris, Inc. (30% shareholder), outside the submitted work; Grants: SRS (D, Paid to the institution), AO (C, Paid to the institution), DePuy Spine (Paid through ISSGF) (H, Paid to the institution), outside the submitted work. CPA: Royalties: Stryker (F), Biomet Spine (E), outside the submitted work; Stock Ownership: Doctors Research Group (<1%), outside the submitted work; Consulting: Stryker (B), DePuy (C), Medtronic (B), outside the submitted work. SDG: Royalties: Medtronic (G, as reported on the CMS website), outside the submitted work.

Publisher Copyright:
© 2016 Elsevier Inc.

Keywords

  • Adult spine deformity surgery
  • Cost per QALY calculations
  • Cost-effectiveness
  • Hospital costs
  • Medicare allowable rates
  • Quality-adjusted life years

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