DRG, costs and reimbursement following Roux-en-y gastric bypass: an economic appraisal

Background: There is disagreement regarding hospital and physician reimbursement fees when DRG codes are used. We have found that physicians and hospitals are rewarded differently depending on the type of insurance coverage - per them HMO (Health Maintenance Organization) vs public. Methods: 133 patients were retrospectively analyzed in a single institution. There were 59 privately-insured and 74 publicly-insured patients. Using DRG 288, hospital and surgeon reimbursement rates, complications, length of stay, blood loss and basic demographics were evaluated on all patients. Reimbursement rates were then compared to inpatient hospital costs per case for both open and laparoscopic Rouxen-Y gastric bypass (RYGBP). Statistical analysis used Student's t-test and standard deviation. Results: The 2 groups were similar in terms of age, sex and BMI. There was a large difference in physician reimbursement when comparing public to private insurance ($931 +/- 73 vs $2356 +/- 822, P<0.001). Likewise, there was a large difference in hospital reimbursement (public $11773 +/- 4462 vs private $4435 +/- 3106, P<0.001). The estimated costs for open gastric bypass was $3179 vs $4180 for the laparoscopic bypass. The HMO per them rate was $1000 per day. Conclusion: There is a relative disincentive for surgeons to treat publicly-insured patients, while there is an incentive for hospitals to treat those patients. The converse is true for the privately-insured patients. This dichotomy will impede the development of new centers and place greater burden on bariatric surgeons to reduce cost by performing the open RYGBP.