Hospital Teaching Status and Medicare Expenditures for Complex Surgery

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To evaluate the relationship between hospital teaching intensity, Medicare payments, and perioperative outcomes.


Several emerging payment policies penalize hospitals for low-value healthcare. Teaching hospitals may be at a disadvantage given the perception that they deliver care less efficiently.


Using Medicare Provider and Analysis Review files, we studied patients from age 65 to 100 years who underwent abdominal aortic aneurysm (AAA) repair (n = 71,422), pulmonary resection (n = 93,056), or colectomy (n = 277,619) from 2009 to 2012. Patients’ hospitals were categorized into quintiles of teaching intensity (very major, major, minor, very minor, and nonteaching hospitals) based on the resident-to-bed ratio. Risk-adjusted 30-day Medicare payments were price-standardized to account for graduate medical education payments, disproportionate share costs, and regional wage-index adjustments. Risk-adjusted perioperative outcomes were also assessed.


Comparing risk-adjusted Medicare payments per episode of surgery, very major teaching hospitals were $14,145 more expensive than nonteaching hospitals for AAA repair ($45,570 vs $31,426; P < 0.001), $9,812 more expensive for pulmonary resection ($39,550 vs $29,738; P < 0.001), and $19,147 more expensive for colectomy ($51,893 vs $32,746; P < 0.001). However, after accounting for social subsidies and regional variation in Medicare spending, risk-adjusted Medicare payments were not statistically different between very major teaching hospitals and nonteaching hospitals for AAA repair ($29,946 vs $27,993; P = 0.18) and pulmonary resection ($25,407 vs $26,813; P = 1.00); a statistically significant but attenuated difference persisted for colectomy ($34,949 vs $30,352; P < 0.001). Very major teaching hospitals generally had higher risk-adjusted rates of serious complications and readmissions, but lower risk-adjusted rates of failure to rescue and 30-day mortality than did nonteaching hospitals.


After price-standardization to account for intended differences in Medicare spending, risk-adjusted Medicare payments for an episode of surgical care were similar at teaching hospitals and nonteaching hospitals for three complex inpatient operations.

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