Toward Strategies for Cost Containment in Surgical Patients

Abstract

The University of Rochester, Department of Surgery, in response to an experimental community-wide limit on hospital budgets, studied high-cost general surgical patients as a potential source of leverage for containment of hospital costs. It was found that a small number of patients impact significantly on hospital costs. In 1980, 3935 patients at Strong Memorial Hospital (SMH) had at least one contact with a general surgical patient care or intensive care unit; 261 patients (6.6%) had total 1980 charges of more than $20,000 each. They contributed 32% of the total of both general surgical charges and patient days. A subset of 2021 patients was selected to represent more precisely the general surgical patient. The 85 high-cost patients (4.2%) of this subset were chosen for intensive study. These patients generated a significant and disproportionate per cent of total (2021) general surgical charges (26.8%) and hospital days (27.6%). Average total charges were more than 8 times those of the complementary general surgical subset (1936). Nineteen of the 85 patients (22.3%) died in the hospital and 42 patients (49.4%) were dead within 2 1/2 years. Forty patients (of the 85) were then further identified as "complex", based on multiple, usually unrelated, illnesses and multiple annual admissions. Tending to be elderly with poor prognoses, 60% of them had died by April 1983. The major criterion of complexity was the lack of a well-focused medical problem; the cure for one problem simply relinquished primacy to another. A parallel study of hospital ancillary procedures disclosed a similar high-cost pattern. Of approximately 4000 ancillary procedures, 100 (2.5%) had annual charges of $100,000 or over, accounting for two-thirds of total 1980 ancillary charges. Roughly 20% of a single patient's ordered procedures accounted for 80% of the patient's ancillary charges, thus allowing concentrated study of a relatively small number of charges. Means for cost containment may be applied logically to the high-cost patient and particularly toward the complex patient. The complex patient is especially suited for consideration, since it is postulated that these patients are endemic to all general hospitals and to all clinical services. Strategies to be developed should include: 1) a managerial system in which physicians have an incentive to contain costs, 2) an online data system, 3) an accurate, efficient way to identify prospective high-cost and complex patients and, 4) awareness by physicians, patients, and society that less expensive modes of diagnosis and therapy are an appropriate response to rationed health resources.