Variation in pediatric outpatient adenotonsillectomy costs in a multihospital network

Objectives/Hypothesis Identify hospital costs for same‐day pediatric adenotonsillectomy (T&A) surgery, and evaluate surgeon, hospital, and patient factors influencing variation in costs, and compare relationship of costs to complications for T&A. Study Design Observational retrospective cohort study. Methods A multihospital network's standardized activity‐based accounting system was used to determine hospital costs per T&A from 1998 to 2012. Children 1 to 18 years old who underwent same‐day T&A surgery were included. Subjects with additional procedures were excluded. Mixed effects analyses were performed to identify variation in mean costs due to surgeon, hospital, and patient factors. Surgeons' mean cost/case was related to subsequent complications, defined as any unplanned visit within 21 days in the healthcare system. Results The study cohort included 26,626 T&As performed by 66 surgeons at 18 hospitals. Mean cost per T&A was $1,355 ± $505. Mixed effects analysis using patient factors as fixed effects and surgeon and hospital as a random effect identified significant variation in mean costs per surgeon, with 95% of surgeons having a mean cost/case between 67% and 150% of the overall mean (range, $874–$2,232/case). Similar variability was found among hospitals, with 95% of the facilities having mean costs between 64% to 156% of the mean (range, $1,029–$2,385/case). Severity of illness and several other patient factors exhibited small but statistically significant associations with cost. Surgeons' mean cost/case was moderately associated with an increased complication rate. Conclusions Significant variation in same‐day pediatric T&A surgery costs exists among different surgeons and hospitals within a multihospital network. Reducing variation in costs while maintaining outcomes may improve healthcare value and eliminate waste. Level of Evidence 4. Laryngoscope , 125:1215–1220, 2015