Patients at hospitals charging over eight times their costs faced higher risks of complications and mortality.
Investigators conducted a national cross-sectional study, published in JAMA Surgery, that evaluated hospital price markups and their association with outcomes for major elective operations, including abdominal aortic aneurysm repair, colectomy, coronary artery bypass grafting, and hip replacement.
Using the 2022 Nationwide Readmissions Database, the investigators analyzed hospitalizations among 362,367 adult patients across 1,960 US hospitals. Markup ratio was defined as the ratio of charges to costs, and hospitals in the top decile were categorized as high-markup hospitals (HMH).
Among the 1,960 hospitals, 194 were classified as HMHs, with a median markup ratio of 8.5 compared with 3.0 across all hospitals. The 50 most expensive hospitals marked up costs by a median factor of 13. Among the total cohort, 11.8% (n = 42,620) of the patients received care at HMHs. The mean age was 65.1 years, and 48% of them were female. HMHs were more frequently investor-owned, for-profit hospitals in metropolitan areas with larger bed sizes.
Following risk adjustment, the patients treated at HMHs faced significantly higher risks of adverse outcomes. Care at HMHs was associated with increased mortality (adjusted odds ratio [OR] = 1.45) and major morbidity (adjusted OR = 1.39). Complication-specific risks included cardiac (adjusted OR = 1.35), respiratory (adjusted OR = 1.52), infectious (adjusted OR = 1.37), and kidney complications (adjusted OR = 1.53). The patients treated at HMHs were also more likely to experience nonhome discharge (adjusted OR = 1.18) and nonelective readmission within 30 days (adjusted OR = 1.33). Sensitivity analyses indicated that these associations were predominantly driven by for-profit HMHs, while nonprofit HMHs didn't demonstrate statistically significant differences compared with non-HMHs. “High-markup centers appear to yield not only lower quality of care, but also significantly lower value,” noted lead study author Sara Sakowitz, MD, MPH, MBA, of the Department of Surgery, at the University of California, Los Angeles and the Department of Surgery at Massachusetts General Hospital, and colleagues.
In an invited commentary, Sherene E. Sharath, PhD, MPH, of the Department of Surgery in the College of Medicine at the State University of New York Downstate Health Sciences University and the Operative Care Line/Research Service Line at the VA New York Harbor Healthcare System, and colleagues highlighted that nearly three-quarters of HMHs were investor-owned and stressed the role of private equity in reshaping financial priorities at the expense of patient outcomes.
Nonprofit hospitals with high markups may use additional revenue to offset resource burdens, whereas for-profit HMHs disproportionately demonstrated inferior results. Dr. Sharath and colleagues wrote: “[H]igh markup status among nonprofit hospitals was generally not associated with inferior outcomes, suggesting that, in these institutions, markups may help offset resource burdens and support comparable care quality.” Steward Health Care, which filed for bankruptcy in 2024 after a debt-driven expansion, was cited as an example of how private equity ownership can compromise safety and quality of care.
Peyman Benharash, MD, disclosed receiving proctoring fees from AtriCure unrelated to the submitted study; no additional disclosures were noted. The invited commentary authors, Dr. Sharath, Panos Kougias, MD, MSc, and David H. Berger, MD, MHCM, reported no conflicts of interest.
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