Each year, more than 400,000 people choose various types of spinal fusion procedures to improve stability, correct a deformity or reduce pain, with the most common procedure being lumbar fusion. Spinal fusion is generally a safe procedure, although carries the potential risk of complications including infection, poor wound healing, bleeding, blood clots, injury to blood vessels or nerves in and around the spine, and pain at the site from which the bone graft is taken.

Spinal-fusion surgery is one of the most lucrative areas of medicine for hospitals, although its benefits and costs are increasingly scrutinized by public and private payers aiming to control in the variable costs of patient care in value-based payment and reimbursement models, such as material expenses, length of hospital stay, and rehabilitation. Reimbursement for spinal fusion procedures is increasingly tied to care quality and patient safety as part of value-based reimbursement programs.

Recent analysis of Medicare data over a recent 10-year period shows that the incidence of spinal fusion has increased at a higher rate than total joint arthroplasty, and that that hospital charges for this procedure experienced a 3.3-fold increase compared with 2.3-fold increases in charges associated with joint replacement, resulting in a $33.9 billion national expense in 20081.

To further assess the impact of quality and patient safety performance on the variable costs of spinal fusion procedures, Quantros analyzed the difference in excess charges, excess cost and excess days of care for hospitals ranked #1 in their respective state for medical excellence in spinal fusion (DRG 453, 454, 455, 456, 457, 458, 459, 460, 471, 472, 473), and then compared these with those hospitals ranked lowest in the state using the 2018 CareChex National Quality Ratings Database (NQRD). All of the associated excess charge, cost and length of stay assumptions rely upon Quantros’ proprietary risk adjustment model which accounts for differences in patient risk factors using select AHRQ Patient Safety Indicators (PSI-2, PSI-3, PSI-6, PSI-7, PSI-8, PSI-9, PSI-10, PSI-11, PSI-12, PSI-13, PSI-14, and PSI-15). The NQRD comprises ten (10) quarters of Medicare Fee for Service (FFS) claims data (January 2014 to June 2016) and includes virtually all general, acute, non-federal U.S. hospitals (+/- 4,500).

Quantros’ analysis reflects that in the aggregate across all U.S. States, for the Spinal Fusion procedures examined, lowest performing hospitals had nearly four times the amount of excess charges and costs, and over three times the amount of excess days of care as compared to the aggregate national cohort of top ranked hospitals:

Aggregate Excess Data for Medical Excellence in Spinal Fusion

  Total Excess Charges Total Excess Cost Total Excess Days of Care Total Excess Deaths
All Top Ranked Hospitals in each State $276,110,406 $82,800,410 22,153 75
All Bottom Ranked Hospitals in each State $1,034,199,559 $319,800,870 74,206 297

Source: 2018 CareChex National Quality Ratings Database (NQRD)

(Data Time Period: January 2014 – June 2016)

On average, the bottom ranked hospital in each state had 365% more excess charges, 376% more excess costs, a 326% increase in excess days of care and 231% more excess deaths than the #1 ranked hospital.

Average Excess Data for Medical Excellence in Spinal Fusion

  Average Excess Charges Average Excess Cost Average Excess Days of Care Average Excess Deaths
All Top Ranked Hospitals in each State $7,266,063 $2,178,958 582.97 3.57
All Bottom Ranked Hospitals in each State $26,517,937 $8,200,022 1,902.72 8.25

Source: 2018 CareChex National Quality Ratings Database (NQRD)

(Data Time Period: January 2014 – June 2016)

EMERGING VALUE-BASED PERFORMANCE MEASURES IN SPINAL FUSION CARE

Spinal surgeries look to be the next orthopedic procedure in line for value-based care implementation, as evidenced by the actions of insurance companies like United Healthcare, which already has expanded its Spine and Joint Solutions initiative to cover spinal fusion and spinal disc repair, aligning those procedures with the value-based payment system applied to knee and hip procedures.

Beginning in 2019, CMS is proposing to include three clinical episode-based payment measures in the Hospital Inpatient Quality Reporting Program including the Spinal Fusion Clinical Episode-Based Payment (“SFusion Payment”) Measure. The proposed SFusion Payment measure includes the set of medical services related to a hospital admission for a spinal fusion, including treatment, follow-up, and post-acute care and assesses the payment for services clinically related to the spinal fusion procedure initiated during an episode that spans three days prior to the Medicare patient’s hospital admission for surgery and extends 30 days following the Medicare patient’s discharge from the hospital.

CMS selected the procedures for which to develop clinical episode-based payment measures based on the following criteria:

  1. the condition constitutes a significant share of Medicare payments and potential savings for hospitalized patients during and surrounding a hospital stay;
  2. there was a high degree of agreement among consulting clinical experts that standardized Medicare payments for services provided during this episode can be linked to the care provided during the hospitalization;
  3. episodes of care for the condition are comprised of a substantial proportion of payments and potential savings for post-acute care, indicating episode payment differences are driven by utilization outside of the MS-DRG payment;
  4. episodes of care for the condition reflect high variation in post discharge payments, enabling differentiation among hospitals; and
  5. the medical condition is managed by general medicine physicians or hospitalists and the surgical conditions are managed by surgical subspecialists, enabling comparison between similar practitioners.

CONCLUSION

Spinal-fusion surgery is one of the most lucrative areas of medicine for hospitals, although its benefits and costs are increasingly scrutinized by public and private payers aiming to control in the variable costs of patient care in value-based payment and reimbursement models, such as material expenses, length of hospital stay, and rehabilitation. Reimbursement for spinal fusion procedures is increasingly tied to care quality and patient safety as part of value-based reimbursement programs.

The reduction of potentially preventable complications and adverse events can have a material influence on the variable costs of spinal fusion procedures. Standardizing the outcome measures that define value in a spinal procedure, and optimizing those outcomes in a cost-effective manner, will be instrumental to the expansion of value-based payment reform across all orthopedic procedures.


1 Sullivan R, Jarvis LD, O’Gara T, Langfitt M, Emory C. Bundled payments in total joint arthroplasty and spine surgery. Current Reviews in Musculoskeletal Medicine. 2017;10(2):218-223. doi:10.1007/s12178-017-9405-8.

 

 

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