Hospital Surgical Volume, Surgical Case Mix, and Profitability
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abstract
Surgery provision is integral to health care in the United States for patients, providers, and facilities. As the number of insured persons in the United States rises with the implementation of health care reform legislation, so does the pressure on general acute care hospitals to provide safe, high-quality care while meeting the rising demand. The purpose of this study is to understand what drives how long a surgical case takes at a given facility, which affects surgical volume; how surgical volumes affect profitability; and how this volume-profitability relationship is affected by other care providers, such as ambulatory surgical centers. The first aim of this study employs multilevel regression techniques to understand the relationship between case duration and facility, anesthesia practice, and patient characteristics. The second aim develops facility-level clusters of surgical offerings and investigates the association of cluster membership, surgical volume, and profitability. The third aim examines the effect of ambulatory surgical center presence on volumes and revenues of nearby hospitals. Findings for these three aims are as follows. While case duration is difficult to predict accurately, facility and anesthesia-practice level variation affects case duration and is a potential source for improvement. In addition, four distinct patterns of surgical offerings are present in Texas data; however, these results do not indicate that one surgical offering grouping is more profitable than any other. Surgical volume, however, does affect the financial health of general acute care facilities. My study does not find evidence that ambulatory surgery center penetration affects the surgical volumes or revenues of nearby hospitals. In summary, case duration differs across hospitals, which is likely part of why the volume of surgeries differs across hospitals; this is important, because surgical volume affects a hospitals profitability, which may in turn be affected by surgical provision in nearby ambulatory care facilities.
