Cost Analysis of Routine Vitrectomy Surgery

Avni P. Finn, MD  |  March 4, 2021

March 2021

Berkowitz S.T., Sternberg P., Jr & Patel S., Cost Analysis of Routine Vitrectomy Surgery, Ophthalmology Retina, Published February 11, 2021, DOI: https://doi.org/10.1016/j.oret.2021.02.003.

Due to rising healthcare costs, value-based healthcare reform has been at the forefront of healthcare delivery and policy. In this model, healthcare is reimbursed according to the value or quality of care delivered relative to the cost of delivering that care.  However, as the authors state placing a cost on a vitrectomy surgery is tricky given the multiple factors such as labor, equipment, space, and overhead involved. Given that current methods do not accurately measure the healthcare costs associated with vitrectomy surgery and little cost-based analysis has been performed regarding ophthalmologic procedures, the authors use time-driven activity-based costing (TDABC) and real-world data to better understand the costs associated with vitrectomy surgery.

The authors performed a TDABC-based economic analysis in order to calculate the complete cost of a routine pars plana vitrectomy and compare this to the current level of reimbursement. They used the medical records of patients undergoing elective vitrectomy procedures at an academic medical center and combined this with process flow mapping and time logs from internal perioperative data. Materials and overhead costs were calculated using internal financial management software and internal figures. Using all of these inputs the authors were able to calculate the cost of routine vitrectomy surgery.

With this analysis the authors conclude the cost of routine vitrectomy surgery is significantly more than the maximum allowable Medicare reimbursment. They estimated routine vitrectomy surgery at a total cost of $7,169.79 per patient. This is $2,053.85 more than the maximum Medicare reimbursement for the equivalent episode, $5,115.93. The authors further calculated that vitrectomy cases do not reach breakeven unless the case length is less than 26.81 minutes, overhead is reduced by 53.78%, or reimbursement is increased by 40.15%. Furthermore, the authors note that 68% of the cases in their cohort were unprofitable according to this economic analysis with losses proportional to the duration of the case.

Analyses such as these are imperative to better understand the costs associated with high-quality specialized, ophthalmologic care such as that delivered by retina specialists. As our healthcare system moves toward a value-based care model, analyses such as these may help to more accurately estimate the cost of care. These analyses aide policy makers and providers alike in understanding and negotiating more appropriate reimbursement so that we may continue to deliver high-quality retinal care to our patients.

Avni P. Finn, MD

Northern California Retina Vitreous Associates
Mountain View, CA

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