A Unique All-Payer Rate-Setting System Controls the Cost but Not the Racial Disparity in Lower Extremity Revascularization Procedures

Background: Patients with peripheral arterial disease often have high comorbidity burden that may complicate post-interventional course and drive increased health-care expenditures. Racial disparity had been observed in lower extremity revascularization (LER) patterns and outcomes. In 2014, Maryland adopted an all-payer rate-setting system to limit the rising hospitalization costs. This resulted in an aggregate payment system in which hospital compensation takes place as an overall per capita expenditure for hospital services. We sought to examine racial differences and other patient-level factors that might lead to discrepancies in LER hospital costs in the State of Maryland. Methods: We used International Classification of Diseases, Ninth Revision codes to identify patients who underwent infrainguinal open bypass (open) and endovascular repair (endo) in the Maryland Health Services Cost Review Commission database (2009-2015). Multivariable generalized linear model regression analysis was conducted to report cost differences adjusting for patient-specific demographics, comorbidities, and insurance status. Logistic regression analysis was used to assess quality metrics: intensive care unit (ICU) admission, 30-day readmission, protracted length of stay (pLOS) (endo: pLOS >9, open: pLOS > 10 days) and in-hospital mortality. Results: Among patients undergoing open, costs were higher for nonwhite patients (African-American [AA]: $6,092 [4,682-7,501], other: $3,324 [437-6,212]; both P <= 0.024), diabetics ($2,058 [837-3,279]; P < 0.001), and patients with Medicaid had an increased cost over Medicare patients by $4,325 (1,441-7,209). Critical limb ischemia (CLI) was associated with $5,254 (4,014-6,495) risk-adjusted cost increment. In addition, AA patients demonstrated higher risk-adjusted odds of ICU admission (adjusted odds ratio [aOR] [95% confidence interval {CI}]:1.65 [1.46-1.86]; P < 0.001) and pLOS (aOR [95% CI]: 1.56 [1.37-1.79]; P < 0.001) than their white counterparts. For patients undergoing endo, costs were higher for nonwhite patients (AA: $2,642 [1,574-3,711], other: $4,124 [2,091-6,157]; both P < 0.001). Patients with CLI and heart failure had increased costs after endo. AA patients were more likely to be readmitted or stayed longer after endo (1.16 [1.03-1.29], 1.34 [1.21-1.49]; both P < 0.010, respectively). The overall cost trend was rapidly increasing before all-payer rate policy implementation but it dramatically plateaued after 2014. Conclusions: This study showed that the all-payer rate-setting system has curbed the LER rising costs, but these costs remained disproportionally higher for disadvantaged populations such as AA and Medicaid communities. This underpins the existing racial disparity in LER. AA patients had higher LER costs, most likely driven by extended hospitalization and ICU admission. Efforts could be directed to evaluate the contributing socioeconomic factors, invest in primary prevention of comorbid conditions that had shown to be associated with prohibitive costs, and identify mechanisms to overcome the existing racial disparity in LER within the promising cost-saving payment system at the State of Maryland.