J. Tseng1, B. Loper1, A. V. Lewis1, E. Ngula1, R. F. Alban1 1Cedars-Sinai Medical Center,Department Of Surgery,Los Angeles, CA, USA
Introduction:
Healthcare is one of the largest sectors in the economy, and its expenditures are rapidly growing. Nationwide efforts are being directed to curb waste and incentivize high value care. Hospital chargemaster prices are being criticized for their lack of transparency, and are also potential targets for cost savings. Physician fees for surgical procedures are similarly scrutinized. To better understand general surgery as a practice, we analyzed financial data of the Medicare Fee for Service program and its relationship to provider characteristics and patient demographics.
Methods:
Using the Medicare Provider Fee-For-Service Utilization and Payment Data Public Use Files from 2012-2015, we identified providers who billed for common general surgical operations, including appendectomies, cholecystectomies, colectomies, hernia repair, and small bowel resection. Markup ratios, defined as the amount charged divided by the amount allowed by Medicare, were calculated. Provider zip codes were matched to census data from the 2011-2015 American Community Survey. Provider and patient demographic data were obtained and compared to markup ratios.
Results:
Male surgeons performed the majority of general surgical operations (89.3%) in comparison to females (4.6%) and ambulatory surgical centers (6.1%). Females and ASC’s consistently increased their market share annually to a peak of 6.0% and 6.7% in 2015. This trend was most dramatic in hernia repairs, where women increased their market share by 77% from 2012 to 2015. Colorectal surgeons also increased their share of cases from 46.1% to 52.0% in the same time period. Billing practices did not vary between male and female surgeons (3.71 vs 3.70, p=0.961), while ASC’s billed at higher markup ratios for all procedures (4.80 vs 3.71, p<.001). Markup ratios were highest at both ends of the income spectrum (3.6 and 5.49), and lowest at the 50th percentile (3.33, p<.001). Markup ratios were highest in populations with the most minorities (4.05 for Latinos and 4.3 for Asians, respectively), and were lowest in neighborhoods that were predominantly White (3.32). Areas with more than 30% uninsured had higher markup ratios (4.28). Markup ratios decreased as the proportion of publically insured patients increased (5.73 in 0-10% versus 2.92 in 75-100% uninsured).
Conclusion:
General surgery is a rapidly changing, yet imbalanced field of medicine. While male surgeons still perform the majority of cases, females, ASC’s, and specialists claim a larger bite of market share every year. Though billing practices do not vary between males and females, ASC’s consistently bill more than individual surgeons. Finally, providers appear to adjust charges based on patient socioeconomic demographics such as age, race, insurance status and income. These patterns may reflect a combination of maximizing revenue by capitalizing on wealth, while charging higher prices to in areas at higher risk of nonpayment.