Hospital Variation in Spending for Lung Cancer Resection in Medicare Beneficiaries

Abstract

Background: As cancer payment models transition from fee for service toward payment "bundles" based on episodes of care, a deeper understanding of the costs associated with stage I lung cancer treatment becomes increasingly relevant. To better understand costs in early lung cancer care, we sought to characterize hospital-level variation in Medicare expenditure after lobectomy for stage I non-small cell lung carcinoma.

Methods: Patients who were diagnosed with stage I non-small cell lung carcinoma from 2006 through 2011 and undergoing lobectomy were selected from the Surveillance, Epidemiology and End Results-Medicare linked database. We used Medicare claims to estimate costs of care in the 90 days after initial surgical hospitalization. Hospitals were grouped into quintiles of mean excess cost, calculated as the mean difference between observed costs and risk-adjusted predicted costs. The association between hospital factors and mean excess cost were compared across hospitals, including complication rates and hospital volume.

Results: A total of 3530 patients underwent lobectomy at 156 hospitals. Hospitals in the lowest cost quintile had index hospitalizations $6226 less costly than predicted. Conversely, the most expensive hospital quintile had index hospital costs that were $6151 costlier than predicted. Increased costs were positively associated with the number of complications per patient (P < .001), but not hospital volume (P = .85).

Conclusions: Among Medicare beneficiaries undergoing lobectomy for stage I non-small cell lung carcinoma, the cost of perioperative care varied substantially across hospitals and was strongly associated with complication rate, but not hospital volume.