BACKGROUND/RATIONALE:
The VA health care system continues to devote significant effort and resources toward improving operational quality and economic efficiency. However, there has been relatively little research examining the economic effects of quality initiatives. As health care costs continue to climb, creating a "business case for quality" is a critical component of sustained quality improvement and has been identified as one of the major potential mechanisms for achieving quality and safety goals.


OBJECTIVE(S):
This project examined the benefit of investing in surgical quality improvement programs from a business perspective. Specifically, cost savings that may be achieved by reducing surgical complications were estimated. The specific aims were:

Aim 1: Determine the costs of surgical complications in VHA, adjusting for patient level determinants of costs and hospital-level variation.

Aim 2: Determine variations in the costs of surgical complications across individual hospitals.

Aim 3: Determine variations in the costs of complications for different types of surgical procedures.

Aim 4: Calculate the reduction in costs within VHA nationally associated with specific levels of reduction in surgical complication rates.

Additional objectives addressed in a project modification were to determine the relationship between surgical process measures and the likelihood of post-surgical complications and post-surgical costs of care.

METHODS:
This was a retrospective analysis of 50,344 inpatient surgeries performed in 118 VA hospitals during fiscal year 2006. The study used data from two sources: 1) the Veterans Affairs Surgical Quality Improvement Program (VASQIP), which provides detailed information on preoperative risk factors and on the occurrence of 18 specific postoperative complications; and 2) the VA Decision Support System (DSS), which provides detailed cost data of all patient encounters within VA.

For Aim 1, hierarchical models were used to estimate risk-adjusted hospital costs associated with 6 groups of complications (wound, respiratory, urinary, cardiac, neurology, and other). For Aim 2, variation in the relative cost of complications across hospitals was estimated using hospital-level random intercepts and random complication coefficients. For Aim 3, costs of complications were estimated separately for 5 high volume surgical specialties. Finally, Aim 4 estimated total costs assuming different reductions in complication rates for hospitals with complication rates above the 75th percentile.

The analysis of surgical performance measures used facility performance data from the VA Office of Quality and Performance (OQP), and VA administrative patient-level data on outcomes of surgery, including mortality, readmissions, post-surgical complications, length of stay, and costs.


FINDINGS/RESULTS:
The overall complication rate was 14.7%. The average (unadjusted) cost for patients with no complication was $23,836 ($26,870) while the average cost for patients with any complication was more than 2 times higher at $56,494 ($54,524). After controlling for hospital variation in cost levels and patient risk factors, the relative costs were 69% greater for patients with any complication, relative to patients with no complication (95% confidence interval [CI], 65% to 72%; p<.001), translating to roughly $17,500 in additional costs per risk-adjusted patient when a complication occurs. The relative costs varied by type of complication and were 1.35, 1.42, 1.52, 1.62, and 2.09 for complications of surgical wounds, cardiovascular system, central nervous system, urinary system, and respiratory system, respectively (p<.001 for all). Within surgical specialties, the cost for patients with any complication relative to patients with no complication were 1.84 (95% CI, 1.70-2.00) for neurosurgery, 1.81 (95% CI, 1.75-1.87) for general surgery; 1.74 (95% CI, 1.63-1.85) for urology; 1.58 (95% CI, 1.51-1.64) for peripheral vascular surgery, and 1.35 (95% CI, 1.3 -1.41) for orthopedic surgery.

Savings that could be realized through quality improvement efforts at hospitals with risk-adjusted complication rates above the 75th percentile are estimated at $10 million, $22.8 million, and $32.4 million, if the complication rate can be improved to the 75th percentile, 50th percentile, or 25th percentile, respectively.

In multivariable analyses controlling for the admitting hospital with random effects and patient characteristics, the provision of appropriate VTE prophylaxis and antibiotic therapy peri-operatively were associated with significantly reduced likelihood of death and readmission to the hospital. However, costs were higher for patients undergoing surgeries in hospitals with higher than average performance scores. We attribute this finding to the possibility that hospitals that invest in high quality surgical processes incur greater costs.


IMPACT:
Identifying the determinants and costs of surgical complications provides a critical element in the economic evaluation of surgical process improvement initiatives. It is often argued that the cost savings associated with surgical process improvement more than offset the costs of implementing improvement initiatives. However, there is comparatively little direct evidence to support the conjecture that quality improvement unambiguously "pays for itself." Our analyses suggest that significant cost savings would result from even modest reductions in surgical complications.

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External Links for this Project

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PUBLICATIONS:

Journal Articles

1. Vaughan-Sarrazin MS, Bayman L, Cullen JJ. Costs of postoperative sepsis: the business case for quality improvement to reduce postoperative sepsis in veterans affairs hospitals. Archives of surgery (Chicago, Ill. : 1960). 2011 Aug 1; 146(8):944-51. [view]
2. Wakefield H, Vaughan-Sarrazin M, Cullen JJ. Influence of obesity on complications and costs after intestinal surgery. American journal of surgery. 2012 Oct 1; 204(4):434-40. [view]
3. Vaughan-Sarrazin M, Bayman L, Rosenthal G, Henderson W, Hendricks A, Cullen JJ. The business case for the reduction of surgical complications in VA hospitals. Surgery. 2011 Apr 1; 149(4):474-83. [view]

Conference Presentations

1. Cullen J. Business Case for Reduction in Surgical Complications. Paper presented at: Academic Surgical Congress; 2010 Feb 5; San Antonio, TX. [view]
2. Schweizer ML, Cullen J, Vaughan-Sarrazin MS. Costs Associated with Surgical Site Infections in VA Hospitals. Paper presented at: VA HSR&D / QUERI National Meeting; 2012 Jul 17; National Harbor, MD. [view]
3. Wakefield H, Vaughan-Sarrazin MS, Cullen J. Influence of Obesity on Complications and Costs Following Intestinal Surgery. Paper presented at: VA Association of Surgeons Annual Meeting; 2011 Apr 11; Irvine, CA. [view]
4. Kamath AS, Vaughan-Sarrazin MS, Vander Weg MW, Cullen J, Katz DA. Surgical Costs Associated with Smoking in Veterans Undergoing General Surgery. Poster session presented at: Society of General Internal Medicine Annual Meeting; 2011 May 6; Phoenix, AZ. [view]

DRA: Health Systems Science
DRE: none
Keywords: Cost effectiveness, Utilization patterns
MeSH Terms: none