Small Rural Hospitals and High-Risk Operations: How Would Regionalization Affect Surgical Volume and Hospital Revenue?

Background

Because higher hospital procedure volume is associated with better outcomes for many high-risk procedures, regionalization to higher-volume hospitals has been proposed as a way to improve quality of surgical care. The potential impact of such policies on small rural hospital volume and revenue is unknown.

Study design

We identified all hospitalizations in small rural hospitals (less than 50 beds) in New York State from 1998 to 2001 that included an ICD-9 procedure code for 1 of 9 procedures for which there is a documented volume-outcomes association: abdominal aortic aneurysm repair, aortic-valve replacement, carotid endarterectomy, colectomy, coronary artery bypass, cystectomy, esophagectomy, pancreatectomy, or pulmonary resection. Revenue from these procedures was estimated using gross charges and payor-specific reimbursement rates. We then compared these estimates with total hospital inpatient revenue for each rural hospital.

Results

We identified 14 small rural hospitals where at least one of the nine procedures was performed. All included hospitalizations for colectomy. Aortic aneurysm repairs, cystectomies, and pancreatectomies were performed in three hospitals; carotid endarterectomy in two; and esophagectomy in one. In no hospitals were cardiac procedures or pulmonary resections performed. Estimated average contribution to hospital net revenue for all 9 procedures was approximately 2%, nearly all attributable to colectomy.

Conclusions

If all aortic aneurysm repairs, major cardiothoracic procedures, carotid endarterectomies, cystectomies, and pancreatectomies in New York State were regionalized to higher-volume hospitals, no small rural hospitals would experience substantial impact in terms of rural hospital procedure volume and revenue. Even regionalization of colectomy would have a small impact on inpatient volume and revenue.

Abbreviations and Acronyms: AAAR, abdominal aortic aneurysm repair, CABG, coronary artery bypass graft, HCUP, Healthcare Cost and Utilization Project, RUCA, Rural-Urban Commuting Codes