While children's hospitals (CH) comprise less than five percent of all hospitals in the U.S., they account for 40 percent of pediatric inpatient days and 50 percent of national pediatric healthcare costs. Overall, CH deliver consumers what they expect from specialized programs: resource-intensive care paired with advanced technology, delivered by highly-trained providers prepared to treat the sickest children. However, Emory pediatric surgeon Mehul Raval, MD, is concerned that common, routine procedures and care at CH—not just specialized treatment—appears to cost more than the same procedures at non-children's hospitals (NCH), according to available health utilization cost data.
As principal investigator of a recently awarded $1.1M grant from the Agency of Healthcare Research and Quality (AHRQ), Dr. Raval will study the value of children's surgical care using payment data at CH as compared to NCH for frequently performed surgical procedures, with the hope that his conclusions will encourage pricing transparency and cultivation of a high quality, value-centric healthcare system for all children in the U.S.
"This study will test for any quality or price differentials among CH and NCH, examine the sources of any such differentials, and seek to define any roles that hospital market structure and competition have as potential drivers of high-cost care," says Dr. Raval.
The study's team of experts includes co-investigator and Emory economist Ian McCarthy, PhD, and Fred Sanfilippo, MD, PhD, director of the Emory Healthcare Innovation Program. Each team member will contribute their particular expertise to dissecting a different aspect of the interrelated forces that impact cost and value. Dr. Raval has direct experience with providing pediatric surgical care and analyzing and comparing risk-adjusted hospital-level outcomes; Dr. McCarthy is a methodologic expert in measurement and evaluation of competition in healthcare markets; and Dr. Sanfilippo has more than three decades of involvement with clinical, research, academic, and healthcare administration as well as an accomplished background in evaluating healthcare costs, quality, access, and delivery innovation.
While outcomes for specialized surgical care have been shown to be superior at CH, prior work by Dr. Raval and his colleagues has found that outcomes at CH and NCH are similar for such commonly performed surgical procedures as appendectomy and pyloromyotomy, though the costs are higher at CH compared to NCH. To determine the economic factors that are driving these greater costs, and since earlier research has been limited by the use of data derived from hospital level charges due to the unavailability of true costs or expenses, the team will systematically examine CH and NCH-related payment data collected by the Health Care Cost Institute (HCCI), a non-profit, independent, non-partisan research institute dedicated to illustrating actual health care spending by aggregating payment data from four of the nation's largest insurance carriers.
"To our knowledge, this study will be the first to directly assess the value of children's surgical care using payment data," says Dr. Raval. "It will also be the first to analyze HCCI data for this purpose."
The project will evaluate HCCI data on actual payments for 11 common surgical procedures that have been performed on 25 percent of privately insured children in the U.S. at CH and NCH across the country. After determining the sources of any differentials between the two facility types and how much marketing and competition affects quality and payment variation, Dr. Raval's final goal is to accumulate evidence to influence policy and reimbursement implications for newly forming pediatric accountable care organizations that will be identifying instances of cost differences for procedures where higher costs are justified by improved outcomes.««return to top