Structured Abstract
Objective:
To examine temporal trends of out-of-pocket (OOP) expenses, total payments, facility fees, and professional fees for outpatient surgery.
Summary Background Data:
Approximately 48 million outpatient surgeries are performed annually with a limited financial understanding of these procedures. High OOP expenses may influence treatment decisions, delay care, and cause financial burden for patients.
Methods:
We conducted a retrospective cohort study of patients with employer-sponsored insurance undergoing common outpatient surgical procedures (cholecystectomy, cataract surgery, meniscectomy, muscle/tendon procedures, and joint procedures) from 2011-2017. Total payments for surgical encounters paid by the insurer/employer and patient OOP expenses were calculated. We used multivariable linear regression to predict total payments and OOP expenses, with costs adjusted to the 2017 U.S. dollar.
Results:
We evaluated 5,261,295 outpatient surgeries (2011-2017). Total payments increased by 29%, with a 53% increase in facility fees and no change in professional fees. OOP expenses grew by 50%. After controlling for procedure type, procedures performed in ambulatory surgery centers conferred an additional $2,019 in predicted total payments (95%CI:$2,002-$2,036) and $324 in OOP expenses (95%CI:$319-$328) compared to predicted cost for office-based procedures. Hospital-based procedures cost an additional $2,649 in predicted total payments (95%CI:$2,632-$2,667) and $302 in predicted OOP expenses (95%CI:$297-$306) compared to office procedures.
Conclusion:
Increases in outpatient surgery total payments were driven primarily by facility fees and OOP expenses. OOP expenses are rising faster than total payments, highlighting the transition of costs to patients. Healthcare cost reduction policies should consider the largest areas of spending growth such as facility fees and OOP expenses to minimize the financial burden placed on patients.
Keywords: cost, outpatient surgery, out-of-pocket expenses
Mini Abstract
In this study of 5,261,295 outpatient surgeries from 2011 to 2017, we found that total payments increased by 29%, driven primarily by a 53% increase in facility fees and a 50% increase in out-of-pocket expenses. Health policies aimed at cost reduction should target these areas of spending growth.
Introduction
Elective surgical care has largely transitioned from inpatient hospitalizations to outpatient ambulatory surgery. In 2010, over 48.3 million patients underwent outpatient ambulatory surgery.1 Outpatient surgery rates have grown by over 40% in the past ten years, with a 60% increase in the number of ambulatory surgery centers (ASCs) providing outpatient surgical care.2 The direct medical costs of outpatient surgery are enormous with multiple initiatives aimed at cost reduction. However, healthcare reimbursement is evolving with costs being transitioned from payers to patients through rising deductibles, coinsurance, and copayments. These out-of-pocket (OOP) expenses have implications for access to care, treatment adherence, health-related outcomes, delays in care, and possible financial harm for patients.3-6
The contribution of OOP expenses to the cost of outpatient surgical care is poorly understood. OOP expenses for pharmaceuticals and inpatient hospitalizations have grown substantially over the past ten years.7,8 Specifically, there has been a rise of 86% for deductibles and a rise of 33% for coinsurance for inpatient hospitalizations.7 For plastic surgical procedures performed between 2009 and 2017, there has been a 54% increase in OOP expenses compared to a 23% increase in total payments, revealing that OOP expenses are increasing out of proportion to total payments. However, little is known surrounding the contribution of OOP expenses relative to total payments for the most common outpatient surgical procedures. With a substantial rise in outpatient ambulatory surgery, an understanding of OOP expenses and total spending for surgical care warrants further investigation.
Given the possible negative consequences of OOP expenses, we sought to understand the temporal trends of OOP expenses for the most common outpatient elective surgical procedures. Specifically, we aim to investigate the comparison of OOP expenses relative to total payments, facility fees, and professional fees for outpatient surgery. Additionally, we sought to examine the effect of operative setting on OOP expenses and total payments. These data will help inform policy makers and providers on opportunities for cost reduction to minimize the financial burden placed on patients.
Methods
Data Source/Cohort Selection
In this retrospective cohort study, we examined insurance claims data from the IBM MarketScan Research from 2011-2017, which include the Commercial Claims and Encounters Database and the Medicare Supplemental and Coordination of Benefits Database. The IBM MarketScan Databases aggregate inpatient and outpatient clinical utilization, prescription drug coverage, and payment data for over 350 payers and covers over 55 million beneficiaries annually who are covered and contain employer-sponsored health insurance data.9 The Medicare Supplemental Database and Coordination of Benefits Database contains Medicare supplemental insurance paid by employers (beyond Medicare part A). The study cohort consisted of patients, age 18 years or older, undergoing the most common outpatient surgical procedures as defined by the Agency for Healthcare Research and Quality (AHRQ), Center for Delivery, Organization, and Markets, Healthcare Cost and Utilization Project (HCUP): muscle/tendon/soft tissue procedures, joint procedures, cholecystectomy, meniscectomy, and lens/cataract procedures.10 The Clinical Classification Software (CCS) provided by HCUP was used to obtain Current Procedural Terminology (CPT) codes for the surgical procedures of interest (Supplemental Digital Content 1). We excluded procedures performed in an inpatient setting (Supplemental Digital Content 2). This study qualified for exempt status from the Institutional Review Board.
Outcome Variable
Our primary outcome of interest was variable OOP expenses for the outpatient surgical encounter and any claims 6 days after surgery. This time period was chosen to ensure that all pathology and other surgery-related expenses were captured. OOP expenses comprised of deductible, coinsurance, and copayments. The deductible consists of the amount of money an enrollee pays for covered healthcare services prior to when the insurer assumes payments. After an enrollee meets his/her deductible, coinsurance is the percentage of covered healthcare services that an enrollee must pay. Copayments are a set amount that an enrollee pays for covered healthcare services regardless of whether his/her deductible has been met. We also collected total payment, defined as the total amount paid by the insurer/employer plus the OOP expenses for the outpatient surgical procedures and claims filed 6 days after surgery. For beneficiaries with self-insured health plans in this analysis, the total amount paid for healthcare services is paid by the employer while the insurance company takes on the administrative burden of claims processing. Total payments were separated into facility fees and professional fees. All costs were inflation adjusted to the 2017 United States dollar value.
Patient Factors
We collected patient-level sociodemographic characteristics including age, sex, geographic region, insurance type, and median household income. Insurance type was separated into four categories, including fee-for-service, Medicare fee-for-service, managed care, and Medicare managed care. We also noted enrollment in a high-deductible health plan. As a proxy for health status, we calculated the Elixhauser Comorbidity score for each patient using International Classification of Disease, Ninth Revision (ICD-9) and International Statistical Classification of Diseases and Related Health Problems, Tenth Revision diagnosis codes (ICD-10).11,12 Location of the outpatient surgical procedure was collected and included ambulatory surgery center (ASCs), hospital outpatient departments (HOPDs), and the office setting.13
Statistical Analysis
We used descriptive statistics to examine the temporal trends in mean OOP expenses and mean total payments between 2011 and 2017. We performed bivariate analyses comparing the change in OOP expenses and total payments based on patient-level factors in 2011 and 2017 using the Chi-square test for categorical variables and generalized linear modeling for continuous variables. Generalized linear modeling with log-link and gamma distribution was used to predict the factors associated with OOP expenses and total payments in 2017. The model coefficients are cost ratios, representing the multiplicative change in the outcome (total payments or OOP expenses) relative to the reference group. Covariates included patient sex, median household income, geographic region, Elixhauser Comorbidity score, insurance type, surgical procedure, and surgical location. The post-estimation average marginal effects was calculated to determine the change in the outcome (total payments or OOP expenses) relative to the comparison group. All analyses were performed using SAS software (version 9.4; SAS Institute Inc.). We set a significance level of P<0.05.
Results
Among the most common outpatient surgical procedures, 5,261,295 procedures met inclusion criteria between January 1, 2011 to December 31, 2017. Table 1 describes the demographic and clinical characteristics of the study. Comparing patients who had procedures performed in 2011 to those in 2017, there was a notable increase in patients with high deductible health plans (4.7% in 2011 vs. 16.1% in 2017, P<0.001) undergoing elective outpatient surgery.
Table 1:
Demographic and Clinical Characteristics of Patients Undergoing Outpatient Surgery (2011-2017)
| Patient Characteristics | Overall Number (%) |
2011 Number (%) |
2017 Number (%) |
P-value | |||
|---|---|---|---|---|---|---|---|
| Total | 5,261,295 | 1,050,676 | 439,733 | ||||
| Gender | 0.19 | ||||||
| Female | 2,266,067 | (43.1) | 451,285 | (43) | 189,390 | (43.1) | |
| Male | 2,995,228 | (56.9) | 599,391 | (57) | 250,343 | (56.9) | |
| Age | <.001 | ||||||
| 18-34 | 495,760 | (9.4) | 99,317 | (9.5) | 43,703 | (9.9) | |
| 35-44 | 476,447 | (9.1) | 98,973 | (9.4) | 40,783 | (9.3) | |
| 45-54 | 872,720 | (16.6) | 176,105 | (16.8) | 78,136 | (17.8) | |
| 55-64 | 1,360,761 | (25.9) | 251,256 | (23.9) | 135,150 | (30.7) | |
| ≥65 | 2,055,607 | (39.1) | 425,025 | (40.5) | 141,961 | (32.3) | |
| Median Household Income | <.001 | ||||||
| <40,000 | 128,283 | (2.4) | 26,980 | (2.6) | 6,888 | (1.6) | |
| 40,000-50,000 | 1,318,998 | (25.1) | 260,244 | (24.8) | 84,065 | (19.1) | |
| 50,000-60,000 | 1,821,125 | (34.6) | 380,546 | (36.2) | 124,898 | (28.4) | |
| 60,000-70,000 | 625,684 | (11.9) | 128,003 | (12.2) | 30,528 | (6.9) | |
| >70,000 | 204,782 | (3.9) | 44,260 | (4.2) | 11,525 | (2.6) | |
| Unspecified | 1,162,423 | (22.1) | 210,643 | (20) | 181,829 | (41.3) | |
| Geographic Region | <.001 | ||||||
| Northeast | 906,294 | (17.2) | 175,616 | (16.7) | 73,494 | (16.7) | |
| North Central | 1,348,479 | (25.6) | 280,590 | (26.7) | 106,737 | (24.3) | |
| South | 2,010,970 | (38.2) | 386,931 | (36.8) | 198,909 | (45.2) | |
| West | 885,507 | (16.8) | 175,717 | (16.7) | 59,870 | (13.6) | |
| Unspecified | 110,045 | (2.1) | 31,822 | (3) | 723 | (0.2) | |
| Elixhauser Comorbidity Score | <.001 | ||||||
| 0 | 2,836,957 | (53.9) | 502,865 | (47.9) | 304,162 | (69.2) | |
| 1-3 | 486,438 | (9.2) | 100,932 | (9.6) | 38,126 | (8.7) | |
| 4-7 | 999,081 | (19) | 216,578 | (20.6) | 61,718 | (14) | |
| ≥8 | 938,819 | (17.8) | 230,301 | (21.9) | 35,727 | (8.1) | |
| Insurance Type | <.001 | ||||||
| FFS | 3,291,324 | (62.6) | 635,725 | (60.5) | 307,966 | (70) | |
| MC | 386,719 | (7.4) | 81,364 | (7.7) | 35,177 | (8) | |
| Medicare-FFS | 1,418,897 | (27) | 298,006 | (28.4) | 83,088 | (18.9) | |
| Medicare-MC | 164,355 | (3.1) | 35,581 | (3.4) | 13,502 | (3.1) | |
| HDHP | <.001 | ||||||
| Yes | 447,425 | (8.5) | 49,752 | (4.7) | 70,785 | (16.1) | |
| Procedure Type | <.001 | ||||||
| Lens/cataract | 1,768,969 | (33.6) | 352,760 | (33.6) | 137,540 | (31.3) | |
| Cholecystectomy | 559,192 | (10.6) | 118,844 | (11.3) | 46,025 | (10.5) | |
| Meniscectomy | 450,939 | (8.6) | 77,466 | (7.4) | 40,533 | (9.2) | |
| Muscle/Tendon Procedure | 1,231,640 | (23.4) | 236,685 | (22.5) | 114,434 | (26) | |
| Joint Procedure | 581,164 | (11) | 118,080 | (11.2) | 47,780 | (10.9) | |
| Multiple Procedures | 669,391 | (12.7) | 146,841 | (14) | 53,421 | (12.1) | |
| Operative Setting | <.001 | ||||||
| Office | 399,029 | (7.6) | 76,555 | (7.3) | 33,303 | (7.6) | |
| HOPD | 2,950,155 | (56.1) | 649,227 | (61.8) | 229,468 | (52.2) | |
| ASC | 1,912,111 | (36.3) | 324,894 | (30.9) | 176,962 | (40.2) | |
ASC: ambulatory surgery center, FFS: fee-for-service, HDHP: high-deductible health plan, HOPD: hospital outpatient department, MC: managed care
On average, the total payment for an outpatient surgical procedure between 2011 and 2017 was $2,827 (Table 2). The mean total payments increased by 29% from 2011 to 2017 (average total payment in 2011: $2,611 vs. average total payment in 2017: $3,369). Within this time period, we found a 53% increase in facility fees (P<0.001) where professional fees remained unchanged (Figure 1). Increases in total payments were seen regardless of the procedure performed (Table 2). Additionally, there was a 10% increase in total payments for procedures performed in the office setting, a 36% increase in HOPDs, and a 26% increase in ASCs.
Table 2:
Average Payments for the Outpatient Surgical Episode Plus Six Days Postoperatively
| Characteristic | Total Payments | ||||
|---|---|---|---|---|---|
| Average Total Payments, $* |
Average Payments 2011, $* |
Average Payments 2017, $* |
2011-2017, % change |
P- Value# |
|
| Total Payments | 2,827 | 2,611 | 3,369 | 29 | <.001 |
| Facility Fee | 1,673 | 1,442 | 2,204 | 53 | <.001 |
| Professional Fee | 1,154 | 1,170 | 1,165 | 0 | 0.01 |
| Insurance Type | |||||
| FFS | 3,235 | 2,972 | 3,645 | 23 | <.001 |
| MC | 3,038 | 2,732 | 3,423 | 25 | <.001 |
| Medicare-FFS | 1,909 | 1,872 | 2,556 | 37 | <.001 |
| Medicare-MC | 2,081 | 2,087 | 1,913 | −8 | <.001 |
| HDHP | |||||
| Yes | 3,051 | 2,560 | 3,597 | 41 | <.001 |
| No | 2,806 | 2,614 | 3,325 | 27 | <.001 |
| Geographic Region | |||||
| Northeast | 3,092 | 2,811 | 4,092 | 46 | <.001 |
| North Central | 2,812 | 2,639 | 3,287 | 25 | <.001 |
| South | 2,620 | 2,379 | 3,073 | 29 | <.001 |
| West | 3,071 | 2,882 | 3,609 | 25 | <.001 |
| Operative Setting | |||||
| Office | 836 | 833 | 917 | 10 | <.001 |
| HOPD | 3,302 | 2,933 | 3,998 | 36 | <.001 |
| ASC | 2,510 | 2,388 | 3,014 | 26 | <.001 |
| Procedure Type | |||||
| Lens/Cataract | 1,848 | 1,821 | 2,219 | 22 | <.001 |
| Cholecystectomy | 4,162 | 3,679 | 4,885 | 33 | <.001 |
| Meniscectomy | 3,184 | 2,879 | 3,692 | 28 | <.001 |
| Muscle/tendon | 2,371 | 2,126 | 2,845 | 34 | <.001 |
| Joint Procedure | 3,169 | 2,775 | 3,870 | 39 | <.001 |
| Mixture | 4,601 | 4,156 | 5,450 | 31 | <.001 |
ASC: ambulatory surgery center, FFS: fee-for-service, HDHP: high deductible health plan, HOPD: hospital outpatient department, MC: managed care
All costs inflation-adjusted to 2017 dollar value.
P-values obtained using generalized linear model for trend.
Figure 1:
Total Payments for Outpatient Surgical Episode (2011-2017)
For OOP expenses, on average patients paid $347 for their outpatient elective surgical procedure. There was a 50% increase in OOP expenses from 2011 to 2017 (P<0.001) (Table 3). Figure 2 demonstrates the trends in total OOP expenses, deductible, copayments, and coinsurance from 2011 to 2017. Within OOP expenses, we found an 84% increase in deductible payments ($93 in 2011 vs. $171 in 2017), 41% increase in coinsurance ($185 in 2011 vs. $261 in 2017), and a 30% decrease in copayments ($20 in 2011 vs. $14 in 2017) (P<0.001). Patients with high-deductible health plans paid on average $619 for their outpatient surgical procedure during the study period compared to $322 for patients without high-deductible health plans. Patients with high-deductible health plans incurred an increase in OOP expenses of 49% from 2011 to 2017 compared to a 36% increase in OOP expenses for patients without a high-deductible health plan. From 2011 to 2017, patients receiving procedures performed in the office incurred a 51% increase in OOP expenses compared to a 44% increase for HOPDs and a 62% increase in ASCs. This increase in OOP expenses was seen for all outpatient surgical procedures (Table 3).
Table 3:
Average Out-of-Pocket Expenses for Outpatient Surgical Procedure Plus Six Days Postoperatively
| Characteristic | Out-of-Pocket Expenses | ||||
|---|---|---|---|---|---|
| Average Total OOP Expenses, $* |
Average OOP Expenses 2011, $* |
Average OOP Expenses 2017, $* |
2011-2017, % change |
P-Value# | |
| Total | 347 | 298 | 447 | 50 | <.001 |
| Deductible | 120 | 93 | 171 | 84 | <.001 |
| Coinsurance | 210 | 185 | 261 | 41 | <.001 |
| Copayment | 17 | 20 | 14 | −30 | <.001 |
| Insurance Type | |||||
| FFS | 466 | 401 | 567 | 41 | <.001 |
| MC | 200 | 166 | 282 | 70 | <.001 |
| Medicare-FFS | 137 | 133 | 121 | −9 | <.001 |
| Medicare-MC | 119 | 120 | 135 | 13 | <.001 |
| HDHP | |||||
| Yes | 619 | 485 | 724 | 49 | <.001 |
| No | 322 | 288 | 393 | 36 | <.001 |
| Geographic Region | |||||
| Northeast | 224 | 174 | 316 | 82 | <.001 |
| North Central | 349 | 292 | 423 | 45 | <.001 |
| South | 403 | 361 | 493 | 37 | <.001 |
| West | 354 | 298 | 497 | 67 | <.001 |
| Operative Setting | |||||
| Office | 127 | 108 | 163 | 51 | <.001 |
| HOPD | 368 | 321 | 463 | 44 | <.001 |
| ASC | 361 | 295 | 478 | 62 | <.001 |
| Procedure Type | |||||
| Lens/Cataract | 234 | 207 | 305 | 47 | <.001 |
| Cholecystectomy | 461 | 392 | 569 | 45 | <.001 |
| Meniscectomy | 434 | 348 | 563 | 62 | <.001 |
| Muscle/tendon | 336 | 281 | 430 | 53 | <.001 |
| Joint Procedure | 369 | 303 | 481 | 59 | <.001 |
| Mixture | 493 | 433 | 622 | 44 | <.001 |
ASC: ambulatory surgery center, FFS: fee-for-service, HDHP: high deductible health plan, HOPD: hospital outpatient department, MC: managed care, OOP: out-of-pocket
All costs inflation-adjusted to 2017 dollar value.
P-values obtained using generalized linear model for trend.
Figure 2:
Out-of-Pocket Expenses for Outpatient Surgical Episode (2011-2017)
After controlling for potential confounders, patients with higher comorbidity scores had significantly larger total payments (Table 4). Managed care payments were significantly lower ($-203, 95% CI: $-233 to $-173) compared to fee-for-service payments. Additionally, high-deductible health plans resulted in a decrease in total payments of approximately 73 dollars (95%CI: $-96 to $-50) compared to patients without high-deductible health plans. Procedures performed in HOPDs cost an additional $2,649 (95% CI: $2,632 to $2,667) compared to office-based procedures, and procedures performed in ASCs conferred an additional $2,019 (95% CI: $2,002-$2,036) in total payments compared to office-based procedures.
Table 4:
Generalized Linear Regression of Total Payments in 2017a
| Characteristics | Cost Ratio (95% CI) | P-value | $ Change (95% CI)b |
|---|---|---|---|
| Elixhauser Comorbidity Score | |||
| 0 | 1[Reference] | - | - |
| 1-3 | 1.02 (1.01-1.03) | <.001 | 61 (32 to 91) |
| 4-7 | 1.05 (1.05-1.06) | <.001 | 191 (166 to 215) |
| ≥8 | 1.19 (1.18-1.2) | <.001 | 670 (634 to 705) |
| Insurance Type | |||
| FFS | 1[Reference] | - | - |
| MC | 0.95 (0.94-0.95) | <.001 | −203 (−233 to −173) |
| Medicare-FFS | 0.93 (0.92-0.93) | <.001 | −282 (−306 to −257) |
| Medicare-MC | 0.71 (0.7-0.72) | <.001 | −1100 (−1137 to −1064) |
| HDHP | |||
| No | 1[Reference] | - | - |
| Yes | 0.98 (0.97-0.99) | <.001 | −73 (−96 to −50) |
| Operative Setting | |||
| Office | 1[Reference] | - | - |
| HOPD | 2.87 (2.85-2.9) | <.001 | 2649 (2632 to 2667) |
| ASC | 2.43 (2.4-2.45) | <.001 | 2019 (2002 to 2036) |
| Procedure Type | |||
| Lens/Cataract | 1[Reference] | - | - |
| Cholecystectomy | 1.91 (1.89-1.93) | <.001 | 2455 (2415 to 2495) |
| Meniscectomy | 1.36 (1.35-1.37) | <.001 | 967 (937 to 997) |
| Muscle/tendon | 1.12 (1.11-1.12) | <.001 | 315 (296 to 333) |
| Joint Procedure | 1.48 (1.47-1.5) | <.001 | 1308 (1278 to 1338) |
| Mixture | 2.05 (2.03-2.07) | <.001 | 2831 (2792 to 2869) |
ASC: ambulatory surgery center; FFS: fee-for-service; HDHP: high-deductible health plan; HOPD: hospital outpatient department; MC: managed care
Model included gender, median household income, geographic region, Elixhauser Comorbidity Score, insurance type, HDHP, operative setting, and procedure type.
Changes in total payments obtained using post-estimation average marginal effect.
In the adjusted regression for OOP expenses, patients with high-deductible health plans paid an addition $222 for their outpatient surgical procedure compared to patients without high-deductible health plans (95%CI: $216 to $229) (Table 5). Procedures performed in ASCs and HOPDs had approximately a 200% increase in the predicted OOP expenses relative to procedures performed in the office. Procedures performed in HOPDs conferred an additional $302 in predicted OOP expenses (95% CI: $297 to $306) compared to office-based procedures. Procedures performed in ASCs were associated with an added $324 in OOP expenses (95% CI: $319 to $328) compared to the office.
Table 5:
Generalized Linear Regression of OOP Expenses in 2017a
| Characteristics | Cost Ratio (95% CI) | P-value | $ Change (95% CI)b |
|---|---|---|---|
| Elixhauser Comorbidity Score | |||
| 0 | 1[Reference] | - | - |
| 1-3 | 0.87 (0.86-0.88) | <.001 | −83 (−89 to −76) |
| 4-7 | 0.85 (0.85-0.86) | <.001 | −92 (−97 to −87) |
| ≥8 | 0.77 (0.76-0.78) | <.001 | −146 (−152 to −140) |
| Insurance Type | |||
| FFS | 1[Reference] | - | - |
| MC | 0.72 (0.71-0.73) | <.001 | −195 (−201 to −188) |
| Medicare-FFS | 0.31 (0.31-0.31) | <.001 | −475 (−478 to −472) |
| Medicare-MC | 0.41 (0.4-0.42) | <.001 | −405 (−411 to −398) |
| HDHP | |||
| No | 1[Reference] | - | - |
| Yes | 1.4 (1.39-1.41) | <.001 | 222 (216 to 229) |
| Place of Service | |||
| Office | 1[Reference] | - | - |
| HOPD | 1.98 (1.96-2.01) | <.001 | 302 (297 to 306) |
| ASC | 2.05 (2.03-2.08) | <.001 | 324 (319 to 328) |
| Procedure Type | |||
| Lens/Cataract | 1[Reference] | - | - |
| Cholecystectomy | 1.29 (1.28-1.31) | <.001 | 162 (154 to 171) |
| Meniscectomy | 1.1 (1.09-1.12) | <.001 | 56 (49 to 63) |
| Muscle/tendon | 0.98 (0.97-0.99) | <.001 | −10 (−15 to −5) |
| Joint Procedure | 1.06 (1.04-1.07) | <.001 | 30 (24 to 37) |
| Mixture | 1.3 (1.28-1.31) | <.001 | 165 (157 to 172) |
ASC: ambulatory surgery center; FFS: fee-for-service; HDHP: high-deductible health plan; HOPD: hospital outpatient department; MC: managed care; OOP: out-of-pocket
Model included gender, median household income, geographic region, Elixhauser Comorbidity Score, insurance type, HDHP, operative setting, and procedure type.
Changes in OOP expenses obtained using post-estimation average marginal effect.
Discussion
In this population-based study of patients with employer-based health insurance, total payments for outpatient elective surgical care have grown by 29% from 2011 to 2017. This growth is driven largely by a 53% increase in facility fees and a 50% increase in OOP expenses. Modifiable cost contributors such as operative setting augment the growth in total payments and OOP expenses. These findings suggest that cost reduction policies should target the growth in facility fees and OOP expenses for elective outpatient surgery.
Surgical care accounts for a large portion of healthcare spending. In a study using Medicare claims, Kaye et al. determined that surgical care accounted for 51% of all Medicare spending in 2014 with a substantial increase in specifically outpatient surgical spending from 2008 to 2014.14 From 2008 to 2014, the cost of outpatient surgical care increased by approximately 8.5 billion dollars, regardless of operative location. Our nationwide study of employer-sponsored health insurance corroborates these findings. Outpatient surgical spending from 2011 to 2017 grew by 29%. During this time, facility fees for outpatient surgery increased by 50% after adjusting for inflation. This substantial growth in facility fees has been demonstrated in other studies. Cooper et al. assessed facility and professional fees for all inpatient and hospital-based outpatient care. Between 2007 and 2014, total facility fees for hospital prices grew by 42% while for hospital-based outpatient care hospital prices grew by 25%.15 Given the substantial increase in facility fees, cost reduction policies for private insurance should target the largest growth in healthcare costs: facility prices.
Our findings suggest that patients with employer-sponsored health insurance are bearing a greater burden of their medical care with a 50% growth in OOP expenses. A study by the Commonwealth fund defined underinsurance in instances where OOP expenses over the year prior were equal to 10% or more of household income. In this study, they found that the Affordable Care Act (ACA) resulted in fewer uninsured patients with an increase underinsured patients.16 This increase in underinsured patients was seen primarily in adults age 19-64 with private health insurance. Our findings echo this concern that private health insurance may lead to an increase in underinsurance where patients with private insurance may incur financial harm for healthcare services. Specifically, within the United States, there has been a growth in workers enrolled in high-deductible health plans. In 2019, 28% of workers were enrolled in high-deductible health plans compared to 7% of workers in 2009, resulting in larger OOP maximums for patients.17 In this study, we found a 49% increase in variable OOP expenses for patients with high-deductible health plans compared to a 36% increase if patients did not have a high-deductible health plan. However, studies have shown that patients lack a robust understanding of health insurance and cost sharing. Approximately 78% of patients understand the notion of a deductible compared to 34% of patients who understand the concept of coinsurance, highlighting the complexities of health insurance and cost sharing.18 Moreover, there is a lack of price transparency for healthcare, even for elective procedures. Patients do not have ready access to procedural costs upfront, thus limiting their ability to compare prices and reduce risks of financial harm. Mathews et al. argued that physicians and hospitals should be accountable for billing quality metrics, including providing itemized bills in understandable language and price transparency.19 However, even with price transparency, there should be standardized quality transparency to provide the highest value care for patients. Given the current lack of price transparency, a 50% increase in OOP expenses for outpatient elective surgery can potentially lead to substantial financial hardship for patients. State and federal policies should consider the impact of OOP expenses on surgical care to prevent unintended financial harm for patients.
Operative setting is one modifiable cost contributor for specific outpatient surgical procedures. In this population-based study, procedures performed in the office were significantly less expensive for patients and payers alike. In a single institution study by Rhee et al., minor hand procedures performed in the office saved approximately $393,100 compared to similar procedures performed in the operating room.20 A prior population-based study demonstrated that shifting minor hand procedures from ASCs and HOPDs to the office could potentially save patients $6 million annually.21 However, not all procedures can be performed in the office setting, with likely more complex and costly procedures scheduled in ASCs and HOPDs. Nevertheless, for minor procedures, such as cataract surgery, financial incentives are lacking for hospitals and providers to perform these procedures in the office given the potential barriers in transitioning minor procedures to office settings (e.g.: investment in instruments, need for surgical assistants, instrument processing, etc.). These financial incentives may be one avenue for cost reduction for total payments and OOP expenses for procedures that can be safely carried out in office procedure rooms.
Our study has several limitations inherent to insurance claims data. Claims data are determined by coding practices, which may affect the accuracy and validity of the data. Additionally, the IBM MarketScan databases do not contain granular clinical data, such as disease severity, which may influence costs and operative setting. The IBM MarketScan databases include employer-sponsored health insurance which has substantially different cost sharing than government-sponsored health insurance, such as Medicaid. Therefore, these findings are not generalizable to uninsured patients, patients with Medicare, and patients with Medicaid. Premium costs are not available in the IBM MarketScan databases, which have additional implications on the financial burden of surgery for patients, particularly patients with high-deductible health plans. Patients with specific health plans may gain financial benefits from reduced premiums that may be offset by higher OOP expenses. Additional research is needed to understand the totality of the OOP expenses associated with surgical care. Lastly, we analyzed costs of the surgical episode and 6 days after surgery and did not account for complications or re-admissions within the global period.
Despite these limitations, this nationwide analysis of employer-sponsored health insurance demonstrates that spending for elective outpatient surgery has increased substantially between 2011 and 2017, driven primarily disproportionate increases in facility fees and OOP expenses. Given these increases in OOP expenses for outpatient elective surgery, price and quality transparency may permit a better understanding of costs that patients will incur, allow for price comparisons among surgeons, hospitals, and health systems, and promote high value healthcare. Moreover, for minor procedures, providers should consider operative setting and its impact on costs borne by the patient. Policies aimed at cost reduction should target the largest areas of spending growth such as facility fees and OOP expenses, with a consideration of the financial burden placed on patients.
Supplementary Material
Supplemental Digital Content 1: Current Procedural Terminology Codes
Supplemental Digital Content 2: Inclusion and Exclusion Criteria
Acknowledgements/Funding:
Dr. Erika D. Sears is supported by a Career Development Award Number IK2 HX002592 from the United States (U.S.) Department of Veterans Affairs Health Services R&D (HSRD) Service. Dr. Chang-Fu Kuo and Dr. Kevin C. Chung receive support from Chang Gung Memorial Hospital-University of Michigan Medical Center grant (CORPG3H0071, CORPG3J0191, CORPG3J0201). Dr. Kuo receives support from the Maintenance Project of the Center for Big Data Analytics and Statistics (Grant CLRPG3D0046) and Center for Artificial Intelligence in Medicine (Grant CLRPG3H0012, CIRPG3H0012) at Chang Gung Memorial Hospital. Dr. Kevin C. Chung receives book royalties from Wolters Kluwer and Elsevier. He has received financial support from Axogen. The funding organizations had no role in the design and conduct of the study, including collection, management, analysis, and interpretation of the data. The content is solely the responsibility of the authors and does not necessarily represent the official views of the United States government or Veterans Administration.
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Associated Data
This section collects any data citations, data availability statements, or supplementary materials included in this article.
Supplementary Materials
Supplemental Digital Content 1: Current Procedural Terminology Codes
Supplemental Digital Content 2: Inclusion and Exclusion Criteria