Relationship Between Health Care Spending and Clinical Outcomes in Bariatric Surgery: Implications for Medicare Bundled Payments

Abstract

Objective: To evaluate sources of 90-day episode spending variation in Medicare patients undergoing bariatric surgery and whether spending variation was related to quality of care.

Summary of background data: Medicare's bundled payments for care improvement-advanced program includes the first large-scale episodic bundling program for bariatric surgery. This voluntary program will pay bariatric programs a bonus if 90-day spending after surgery falls below a predetermined target. It is unclear what share of bariatric episode spending may be due to unnecessary variation and thus modifiable through care improvement.

Methods: Retrospective analysis of fee-for-service Medicare claims data from 761 acute care hospitals providing inpatient bariatric surgery between January 1, 2011 and September 30, 2016. We measured associations between patient and hospital factors, clinical outcomes, and total Medicare spending for the 90-day bariatric surgery episode using multivariable regression models.

Results: Of 64,537 patients, 46% underwent sleeve gastrectomy, 22% revisited the emergency department (ED) within 90 days, and 12.5% were readmitted. Average 90-day episode payments were $14,124, ranging from $12,220 at the lowest-spending quintile of hospitals to $16,887 at the highest-spending quintile. After risk adjustment, 90-day episode spending was $11,447 at the lowest quintile versus $15,380 at the highest quintile (difference $3932, P < 0.001). The largest components of spending variation were readmissions (44% of variation, or $2043 per episode), post-acute care (19% or $871), and index professional fees (15% or $450). The lowest spending hospitals had the lowest complication, ED visit, post-acute utilization, and readmission rates (P < 0.001).

Conclusions and relevance: In this retrospective analysis of Medicare patients undergoing bariatric surgery, the largest components of 90-day episode spending variation are readmissions, inpatient professional fees, and post-acute care utilization. Hospitals with lower spending were associated with lower rates of complications, ED visits, post-acute utilization, and readmissions. Incentives for improving outcomes and reducing spending seem to be well-aligned in Medicare's bundled payment initiative for bariatric surgery.