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  • Publication # 14-RA003

The ambulatory care cost benefits of integrated delivery systems may not extend to inpatient surgery

Health Care Costs and Financing

Accountable care organizations (ACOs), an important part of the Affordable Care Act, may not produce the same degree of savings for inpatient surgery that is found for integrated delivery systems (IDSs)—a type of ACO becoming common in ambulatory care, according to a new study by David C. Miller, M.D., M.P.H., and colleagues at the University of Michigan, Ann Arbor. They conclude that the ambulatory care benefits of the IDSs may not extend to inpatient surgery. 

The study found that patients who had surgery (coronary artery bypass graft [CABG], hip replacement, back surgery, or colectomy) at IDS-affiliated and non-IDS-affiliated hospitals did not differ significantly in mortality, complications, or readmissions. The exception was significantly lower readmissions for patients who underwent colectomy at an IDS-affiliated hospital compared with a non-IDS-affiliated hospital (12.6 vs. 13.5 percent).

When the researchers accounted for differences in patient demographics and illness severity, they found that total-episode Medicare payments were slightly lower in IDS-affiliated than non-IDS-affiliated hospitals for CABG, back surgery, and colectomy, and were significantly lower (by $932, or 4 percent) for hip surgery in an IDS-affiliated hospital. Most of the cost differences between the two types of hospitals came from physician services and postdischarge care. 

The findings were based on analysis of data on Medicare beneficiaries who underwent one of the four selected surgeries during a 35-month period (January 2005–November 2007). Identification of IDS-affiliated and -nonaffiliated hospitals was done annually through the use of a commercial database. The study was funded in part by AHRQ (HS18346). 

More details are in "Anticipating the effects of accountable care organizations for inpatient surgery," by Dr. Miller, Zaojun Ye, M.S., Cathryn Gust, M.S., and others in the June 2013 Journal of the American Medical Association/Surgery 148(6), pp. 549-554.


Page last reviewed January 2014
Internet Citation: The ambulatory care cost benefits of integrated delivery systems may not extend to inpatient surgery: Health Care Costs and Financing. January 2014. Agency for Healthcare Research and Quality, Rockville, MD.


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