Accuracy of Surgeon and Patient Estimated Cost and Reimbursement for Common General Surgical Operations and Benefit of Centers for Medicare and Medicaid Services Price Transparency Rules

Abstract

BACKGROUND: On January 1, 2021, the Centers for Medicare and Medicaid Services implemented a hospital price transparency rule. Consumerism as a means of reducing healthcare expenditure is predicated on informed consumers making discrete choices. STUDY DESIGN: For 10 months, immediately after a preoperative clinic visit at an academic medical center, patients and their surgeons were surveyed regarding their estimation of hospital cost and hospital reimbursement for the upcoming operation. Responses were compared to average institutional cost (fiscal year 2019) for Medicare patients undergoing a laparoscopic approach for each operation. We calculated the difference between actual reimbursement and cost with patients’ estimates and actual reimbursement and cost with surgeons’ estimates. RESULTS: Sixty-six questionnaires were collected from patients who underwent laparoscopic operations, that included cholecystectomy (n = 20), inguinal hernia (n = 17), umbilical hernia repair (n = 6), ventral hernia repair (n = 6), incisional hernia (n = 6), hiatal hernia repair (n = 1), and lipoma or cyst excision (n = 10). Patients’ estimates of hospital cost exceeded actual hospital cost by a median of $4,502 and were less than hospital reimbursement by a median of $1,834. Surgeon estimates for direct cost were $825 less than hospital direct cost and $1,659 less than hospital reimbursement. CONCLUSIONS: Patients as well as their surgeons do not estimate healthcare cost or remuneration accurately and therefore will be ineffective change agents in reducing surgical spending based on price transparency without further education of both parties. Patients consistently overestimated surgical cost while surgeons consistently underestimated surgical cost and reimbursement. It is likely that better-informed surgeons and patients are necessary prerequisites for Centers for Medicare and Medicaid Services price transparency rules to be effective in reducing Medicare expenditures in surgery.