Variation in Spending around Surgical Episodes of Urinary Stone Disease: Findings from Michigan.

PURPOSE: To help rein in surgical spending there is growing interest in the application of payment bundles to common outpatient procedures like ureteroscopy and shock wave lithotripsy. However, before urologists can move to such a payment system they need to know where episode costs are concentrated.
MATERIALS AND METHODS: Using claims data from Michigan Value Collaborative we identified patients who underwent ureteroscopy or shock wave lithotripsy at hospitals in Michigan from 2012 to 2015. We then totaled expenditures for all relevant services during the 30-day surgical episodes of these patients and categorized component payments (ie those for the index procedure, subsequent hospitalizations, professional services and postacute care). Finally we quantified the variation in total episode expenditures for ureteroscopy and shock wave lithotripsy across hospitals, examining drivers of this variation.
RESULTS: A total of 9,449 ureteroscopy and 6,446 shock wave lithotripsy procedures were performed at 62 hospitals. Among these hospitals there was threefold variation in ureteroscopy and shock wave lithotripsy spending. The index procedure accounted for the largest payment difference between high vs low cost hospitals (ureteroscopy $7,936 vs $4,995 and shock wave lithotripsy $4,832 vs $3,207, each p <0.01), followed by payments for postacute care (ureteroscopy $2,207 vs $1,711 and shock wave lithotripsy $2,138 vs $1,104, each p <0.01). Across hospitals the index procedure explained 68% and 44% of the variation in episode spending for ureteroscopy and shock wave lithotripsy, and postacute care payments explained 15% and 28%, respectively.
CONCLUSIONS: There exists substantial variation in ambulatory surgical spending across Michigan hospitals for urinary stone episodes. Most of this variation can be explained by payment differences for the index procedure and for postacute care services.