2006 May 14 Sunday
Surgeon Total Costs Vary Greatly At Same Hospital

Costs generated by different surgeons for similar cases vary greatly.

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."

If I understand this correctly, they aren't just saying that some surgeons charge higher fees. Some use more resources of other people to accomplish similar outcomes. This isn't surprising. Medical care isn't a highly standardized single large transparent market.

Some people might be choosing more expensive surgeons on the theory that more expensive is better. Or maybe some surgeons manage their cases more cost effectively.

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."

If we had a lot more publically available summary information about costs and outcomes comparing hospitals and surgeons people could make better decisions. If I ever have to go into a hospital I'd much rather go to one that has lower rates of nosocomial infections (basically, infections you got while in the hospital) for example. But where you can get that sort of information?

Electronic medical records will help create the potential to extract more information about comparative outcomes. But one thing that holds back quality improvements is the fear of lawsuits. Doctors do not want to be rigorously compared to each other with detailed recording and analysis of every step they make because that invites lawsuits. The sorts of process analyses that can get done in, say, a semiconductor or car manufacturing plant face much bigger legal disincentives in hospitals and doctors' offices.

Share |      By Randall Parker at 2006 May 14 03:21 PM  Economics Health


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