Neighborhood deprivation and Medicare expenditures for common surgical procedures

doi:10.1016/j.amjsurg.2022.06.004

The American Journal of Surgery

Volume 224, Issue 5, November 2022, Pages 1274-1279

https://doi.org/10.1016/j.amjsurg.2022.06.004 Get rights and content

Highlights

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30-day episode spending was $2654 higher among beneficiaries living in neighborhoods with high levels of deprivation compared to those in the least deprived.
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Higher Medicare spending was in part driven by higher rates of readmissions (12.9% vs. 10.8%) and post-acute care (67.8% vs. 61.2%) among beneficiaries living in the most deprived neighborhoods.
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The was a significant difference in payments between dual-eligible beneficiaries in the most and least deprived neighborhoods for the index hospitalization ($21,287 vs. $19,927).

Abstract

Introduction

The Center of Medicare and Medicaid Services valued based payments for inpatient surgical hospitalizations are adjusted for clinical but not social risk factors. While research has shown that social risk is associated with worse surgical patient outcomes, it is unknown if inpatient surgical episode Medicare payments are affected by social risk factors.

Methods

Retrospective review of Medicare beneficiaries, age 65–99, undergoing appendectomy, colectomy, hernia repair, or cholecystectomy between 2014 and 2018. Neighborhood deprivation measured by Area Deprivation Index for beneficiary census tract. We evaluated Medicare payments for a total episode of surgical care comprised of index hospitalization, physician fees, post-acute care, and readmission by beneficiary neighborhood deprivation.

Results

A total of 809,059 patients (Women, 56.0%) and mean (SD) age of 75.7 (7.4 years were included. A total of 145,351 beneficiaries lived in the least deprived neighborhoods and 134,188 who lived in the most deprived neighborhoods. Total surgical episode spending was $2654 higher among beneficiaries from the most deprived neighborhoods compared to those from the least after risk adjustment for clinical and hospital factors. These differences were driven in part by higher rates of readmissions (12.9% vs 10.8%, P < 0.001) and post-acute care (67.8% vs. 61.2%, P < 0.001) among beneficiaries living in the most deprived neighborhoods.

Conclusion

These findings suggest that value-based payment models with inclusion of social risk adjustment may be needed for surgical cohorts. Moreover, efforts focused on investing in deprived communities may be aligned with surgical quality improvement.

Introduction

The Centers for Medicare and Medicaid Services is currently moving towards the inclusion of social risk in risk adjustments for value-based payments for inpatient medical and surgical hospitalizations.¹ Concern has been raised those providers and hospitals caring for disproportionate shares of beneficiaries with higher levels of social risk perform worse on quality measures resulting in higher financial penalties.2, 3, 4, 5, 6 These penalties reduce financial resources in these care delivery settings, which in turn may exacerbate disparities for an already vulnerable patient population.²^,4, 5, 6 Despite the well documented impact of social risk factors on patient outcomes and financial penalization of hospital and providers, implementation of risk adjustment models accounting for social risk for value-based payments remains controversial.¹^,⁷^,⁸ Furthermore, assessments of risk adjustments in episode-payment models, such as bundled payments, have been found to insufficiently address socially-at-risk patients.⁹ To date, no payment models for surgical care include measures of social risk.

Despite studies demonstrating that beneficiary neighborhood characteristics are associated with surgical access and outcomes, the relationship to Medicare payments is unclear.10, 11, 12, 13 On the one hand, patients living in areas with more socioeconomic advantage may have better access, and therefore during an episode of care have lower thresholds to utilize services that lead to higher overall higher spending.¹⁴ Whereas patients from higher deprivation neighborhoods may have unmet social needs following surgery that lead to higher post-acute care utilization and readmission rates driving higher cost.15, 16, 17, 18 Even though surgical care accounts for a significant portion of Medicare spending, the current debate about the inclusion of social risk adjustment for measures used for value-based payments have primarily centered on patients with chronic medical conditions.²^,⁷^,¹⁹

The purpose of this study was to evaluate the association between neighborhood characteristics and Medicare payments for surgical procedures. We used the Area Deprivation Index, a composite measure of economic disadvantage and linked it at the 9-digit zip code level to evaluate spending among Medicare beneficiaries undergoing common general surgery procedures.²⁰^,²¹

Section snippets

Data sources

We used 100% claims from the Medicare Provider Analysis and Review (MedPAR) files from the Centers for Medicare and Medicaid (CMS) for beneficiaries undergoing surgery between January 2014 and December 2018. Patient data including age, demographic information, comorbidities, dual-eligible status and geographic location for patients were extracted from the file. We included only Medicare beneficiaries with complete payment data between 65 and 99 years old who were enrolled in Medicare for at

Results

This study included 809,059 beneficiaries who underwent four common general surgery procedures. The cohort had a mean age of 75.7 (7.4) years and were predominantly women (452,697 [56.0%]) (Table 1). The racial composition of beneficiaries was White (714,720 [88.3%]), Black (55,396 [6.8%]), Asian (10,532 [1.3%]), Hispanic (12,718 [1.6%]), Native American (4780 [0.6%]), and Other (10,913 [1.3%]). Black, Hispanic and Native American were more likely to live in the most deprived neighborhoods

Discussion

Our study has two principal findings that improve our understanding of Medicare payments for surgery and social risk. First, we found that beneficiaries living in more deprived neighborhoods had on average, $2654 more total episode spending compared to beneficiaries in least deprived undergoing common surgical procedures. Second, differential rates of post-acute care services and hospital readmissions contributed significantly to the difference in total episode spending. Third, beneficiaries

Conclusion

We found that higher levels of neighborhood deprivation were significantly associated with higher Medicare spending for common general surgery procedures. Our results suggest that transformation in federal payment policy changes to include social risk for value-based payment models is applicable to surgical cohorts. Policy makers interest in accounting for social risk in risk-adjustment for payment models should consider using beneficiary neighborhood deprivation, which is data point available

Funding sources

Sidra Bonner receives funding from the NIH T32 Multidisciplinary Program in Lung Disease at the University of Michigan NHLBI (T32HL007749). Justin B. Dimick received grant funding from the National Institutes of Health (R01AG039434).

Author contributions

Dr. Bonner and Dr. Ibrahim are responsible for the conceptualization, data interpretation. Dr. Bonner was the primary author with Dr. Ibrahim and Dr. Dimick providing revisions of the manuscript. Dr. Ibrahim was the principal investigator. Mr. Kunnath was responsible for data-analysis.

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The combined effect of race, dual-eligibility and neighborhood deprivation on medicare spending after cancer surgery
2023, American Journal of Surgery
Disparities in clinical outcomes following high-risk cancer operations are well documented, but, whether these disparities contribute to higher Medicare spending is unknown.
Using 100% Medicare claims, White and Black beneficiaries undergoing complex cancer surgery between 2016 and 2018 with dual eligibility status and census tract Area Deprivation Index score were included. Linear regression was used to assess the association of race, dual-eligibility, and neighborhood deprivation on Medicare payments.
Overall, 98,725 White(93.5%) and 6900 Black(6.5%) patients were included. Black beneficiaries were more likely to live in the most deprived neighborhoods(33.4% vs. 13.6%; P < 0.001) and be dual-eligible(26.6% vs. 8.5%; P < 0.001) compared to White beneficiares. Overall, Medicare spending was higher for Black compared to White patients($27,291 vs. 26,465; P < 0.001). Notably, when comparing Black dual-eligible patients living in the most deprived neighborhoods to White non-dual eligible patients living in the least deprived spending($29,507 vs. $25,596; abs diff $3911; P < 0.001).
In this study, Medicare spending was significantly higher for Black patients undergoing complex cancer operations compared to White patients due to higher index hospitalization and post-discharge care payments.
Social determinants of health and surgical care
2023, Current Problems in Surgery
Area-Level Socioeconomic Disadvantage and Health Care Spending A Systematic Review
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Published by Elsevier Inc.

Original Research ArticleNeighborhood deprivation and Medicare expenditures for common surgical procedures

Highlights

Abstract

Introduction

Methods

Results

Conclusion

Introduction

Section snippets

Data sources

Results

Discussion

Conclusion

Funding sources

Author contributions

Surgery

Am J Transplant

J Gastrointest Surg

Surgery

Soc Sci Med

Accounting for Social Risk Factors in Medicare Payment: Identifying Social Risk Factors

Adjusting for social risk factors impacts performance and penalties in the hospital readmissions reduction program

Health Serv Res

Racial and ethnic composition of hospitals' service areas and the likelihood of being penalized for excess readmissions by the medicare program

Med Care

Medicare's hospital readmissions reduction program in surgery may disproportionately affect minority-serving hospitals

Ann Surg

The value-based payment modifier: program outcomes and implications for disparities

Ann Intern Med

Medicare's hospital acquired condition reduction program disproportionately affects minority-serving hospitals

Ann Surg

(Adjusting quality measures for social risk factors can promote equity in health care

Health Aff

Risk Adjustment may lessen penalties on hospitals treating complex cardiac patients under Medicare's bundled payments

Health Aff

Intersection of social vulnerability and residential diversity: postoperative outcomes following resection of lung and colon cancer

J Surg Oncol

Health spending for low-, middle-, and high-income Americans

Health Aff

Socioeconomic status and readmissions: evidence from an urban teaching hospital

Health Aff

Impact of risk adjustment for socioeconomic status on risk-adjusted surgical readmission rates

Ann Surg

Socioeconomic “distressed communities index” improves surgical risk-adjustment

Ann Surg

Original Research Article
Neighborhood deprivation and Medicare expenditures for common surgical procedures