Estimating cost savings from regionalizing cardiac procedures using hospital discharge data
Petersen, Laura A.
Background: We examined whether higher procedure volumes for coronary artery bypass graft (CABG) surgery or percutaneous coronary interventions (PCI) were associated with lower costs per patient, and if so, estimated the financial savings from regionalizing cardiac procedures. Methods: Cost regressions with hospital-specific dummy variables measured within-hospital cost reductions associated with increasing hospital volume. We used the regression estimates to predict the change in total costs that would result from moving patients in low-volume hospitals to higher volume facilities. Results: A 10% increase in PCI procedure volume lowered costs per patient by 0.7%. For the average hospital performing CABG in 2000, a 10% increase in volume was associated with a 2.8% reduction in average costs. Despite these lower costs, the predicted savings from regionalizing all PCI procedures in the sample from lower to high-volume hospitals amounted to only 1.1% of the entire costs of performing PCI procedures for the sample in 2000. Similarly, the cost savings for CABG were estimated to be only 3.5%. Conclusion: Higher volumes were associated with lower costs per procedure. However, the total potential savings from regionalizing cardiac procedures is relatively minor, and may not justify the risks of reducing access to needed services.