Identifying Sources of Inter-Hospital Variation in Episode Spending for Sepsis Care

Objective: To evaluate inter-hospital variation in 90-day total episode spending for sepsis, estimate the relative contributions of each component of spending, and identify drivers of spending across the distribution of episode spending on sepsis care. Data sources/study setting: Medicare fee-for-service claims for beneficiaries (n=324,694) discharged from acute care hospitals for sepsis, defined by MS-DRG, between October 2014 and September 2018. Research Design: Multiple linear regression with hospital-level fixed effects was used to identify average hospital differences in 90-day episode spending. Separate multiple linear regression and quantile regression models were used to evaluate drivers of spending across the episode spending distribution. Results: The mean total episode spending among hospitals in the most expensive quartile was $30,500 compared with $23,150 for the least expensive hospitals (P<0.001). Postacute care spending among the most expensive hospitals was almost double that of least expensive hospitals ($7,045 vs. $3,742), accounting for 51% of the total difference in episode spending between the most expensive and least expensive hospitals. Female patients, patients with more comorbidities, urban hospitals, and BPCI-A-participating hospitals were associated with significantly increased episode spending, with the effect increasing at the right tail of the spending distribution. Conclusion: Inter-hospital variation in 90-day episode spending on sepsis care is driven primarily by differences in post-acute care spending.