Between 2001 and 2008: - The cost of coronary revascularization (CABG and PCI procedures) for Medicare beneficiaries declined slightly by 1.4% per year, driven by an increase in lower-cost PCI procedures replacing CABG. - Provider costs for revascularization increased by only 0.5% per year during this period due to the shifting PCI to CABG ratio, despite individual costs for CABG and PCI rising 2% annually. - Medicare reimbursement changes in 2008 led to a sharper 5.6% reduction in Medicare costs for revascularization that year and 3% lower provider costs, suggesting the changes encouraged more cost-effective care.

1. Declining Costs of Coronary Revascularization Among Medicare Beneficiaries: 2001-2008Peter W. Groeneveld, MD, MS · Feifei Yang, MS · Lin Yang, MSPhiladelphia VA Medical Center · Division of General Internal Medicine, Department of Medicine, University of Pennsylvania School of Medicine ·Leonard Davis Institute of Health Economics, University of PennsylvaniaBackgroundConclusionsResultsCoronary revascularization, including coronary artery bypass grafting (CABG) and percutaneous coronary intervention (PCI), is among the most common and expensive hospital-based major procedures performed in the United States (>1million procedures per year, over $10 billion in costs)It is uncertain how new revascularization technologies, new clinical evidence from trials, and updated clinical guidelines have influenced the average cost of coronary revascularizations over the past decadeBetween 2001 and 2007 there was a modest decrease (1.4% per year) in the cost to Medicare for coronary revascularization, almost entirely driven by an increase in the proportion of PCI:CABGThere was a more marked decline (5.6%) during the subsequent two years (2007-2008), likely due to changes in DRG reimbursement beginning in FY 2008Costs to providers increased for both CABG and PCI by approximately 2% per year from 2001 to 2007, yet the average provider cost for revascularization increased only by 0.5%, likely due to the increasing PCI:CABG ratioProvider costs abruptly declined in 2007-2008 by 3% for revascularization, perhaps reflecting more cost-constrained care in an era of declining reimbursementStudy CohortTime Trends in Unadjusted Provider CostsP < 0.001ObjectivesP = 0.007To measure national time trends in the cost of coronary revascularizations in the United States during 2001-2008P = 0.003LimitationsMethodsPrescription drug costs were not included in the analysisMedicare HMO beneficiary costs were not included; the proportion of Medicare beneficiaries enrolled in HMOs changed over timeHospital cost:charge ratios multiplied by hospital charges are not necessarily an accurate reflection of provider costsData: 5% random sample of fee-for-service Medicare Beneficiaries age 65 and older undergoing either CABG or PCI in 2001-2008.All facility (i.e., Part A) and provider (i.e., Part B) claims were aggregated from 30 days prior to 90 days after the date of coronary revascularizationCosts from all payers (i.e., Medicare, other insurers, patient) extracted from all claims and summed to yield episode costDollar values from 2001-2007 inflated to 2008 using national Consumer Price IndexProvider-perspective costs calculated by multiplying charges reported on facility (Part A) claims by the hospital-year specific cost-to-charge ratio reported annually to MedicarePart A provider costs were added to Part B payment amounts (from all payers) to yield provider-perspective episode costsCost trends evaluated using regression models specified as: log(costs) = β0 + β1year + β2MSDRG + β3MSDRG x year + β4age + β5sex + β6race + γ1comorb1 + … + γkcomorbk + ε“MSDRG” indicates post-10/1/2007 (Medicare Severity DRG era)Generalized estimating equations used to adjust standard errors for clustering within hospitalsImplications for Practice and PolicyMultivariable Regression ResultsTime Trends in Unadjusted Payer CostsAlthough new technology tends to increase health care costs, our study suggests that despite innovation, coronary revascularization costs have declined over the past decadeThe effect of drug-eluting stents on the cost of revascularization appears less influential on Medicare spending than either trends in the PCI:CABG ratio or introduction of MS-DRGsReduction in Medicare payments for revascularization resulted in both reduced costs to Medicare as well as a reduction in provider costs, suggesting MS-DRGs were effective at reducing short-term cost growthP = 0.03P < 0.001P = 0.09AcknowledgementsNHLBI : 5R01HL086919 AHRQ : 5R01HS018403*p < 0.05; **p < 0.01; ***p < 0.001†Results are log-linear coefficients for log(cost) regression models, with 95% confidence intervals.‡ Joint effect of year and year interacted with the implementation of the Medicare Severity Diagnosis Related Group system (October, 2007).