Postoperative Complications and Hospital Payment: Implications for Achieving Value

Jason B. Liu, Julia R. Berian, Shenglin Chen, Mark E. Cohen, Karl Y. Bilimoria, Bruce L. Hall, Clifford Y. Ko

Research output: Contribution to journalArticlepeer-review

16 Scopus citations


Background As the current healthcare structure moves toward value-based purchasing, it is helpful for stakeholders to understand costs, particularly for those associated with postoperative complications. The objectives of this study were to assess hospital reimbursements for postoperative complications and generate insight into sustainability of quality. Study Design American College of Surgeons NSQIP and Medicare claims data from 2009 to 2012 were merged for elective colectomy, total knee arthroplasty, and carotid endarterectomy. Payments associated with 7 postoperative complications across each operation were estimated from multivariable regression models. The impact on hospital marginal costs was estimated from the regression results by accounting for complication incidence rates. Results Mean hospital payments per uncomplicated procedure were approximately $13,500 for colectomy (n = 19,089), $12,300 for total knee arthroplasty (n = 17,834), and $7,300 for carotid endarterectomy (n = 16,207). The payment amount per complication increased at a rate of $10,996 for colectomy, $13,732 for total knee arthroplasty, and $8,435 for carotid endarterectomy. When distinguishing between types of complications, the most expensive complication was prolonged ventilation, increasing mean payment by approximately $14,100 (colectomy) and $6,700 (carotid endarterectomy), respectively. Hospital marginal costs accounting for complication rates added additional amounts ranging from 0.82% to 9.2%. Conclusions Postoperative complications add an important marginal cost to Medicare payments, and lead to a substantial portion of payments to hospitals. Using high-quality clinical registry data to measure complication rates, we estimated the cost of complications for 3 commonly performed operations among the Medicare population. Harmonizing financial incentives for both payers and providers are needed to improve the delivery of high-quality surgical care.

Original languageEnglish
Pages (from-to)779-786.e2
JournalJournal of the American College of Surgeons
Issue number5
StatePublished - May 2017


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