Balancing revenue generation with capacity generation: case distribution, financial impact and hospital capacity changes from cancelling or resuming elective surgeries in the US during COVID-19

Abstract

Background: To increase bed capacity and resources, hospitals have postponed elective surgeries, although the financial impact of this decision is unknown. We sought to report elective surgical case distribution, associated gross hospital revenue and regional hospital and intensive care unit (ICU) bed capacity as elective surgical cases are cancelled and then resumed under simulated trends of COVID-19 incidence.

Methods: A retrospective, cohort analysis was performed using insurance claims from 161 million enrollees from the MarketScan database from January 1, 2008 to December 31, 2017. COVID-19 cases were calculated using Institute for Health Metrics and Evaluation models. Centers for Disease Control (CDC) reports on the number of hospitalized and intensive care patients by age estimated the number of cases seen in the ICU, the reduction in elective surgeries and the financial impact of this from historic claims data, using a denominator of all inpatient revenue and outpatient surgeries.

Results: Assuming 5% infection prevalence, cancelling all elective procedures decreases ICU overcapacity from 160 to 130%, but these elective surgical cases contribute 78% (IQR 74, 80) (1.1 trillion (T) US dollars) to inpatient hospital plus outpatient surgical gross revenue per year. Musculoskeletal, circulatory and digestive category elective surgical cases compose 33% ($447B) of total revenue.

Conclusions: Procedures involving the musculoskeletal, cardiovascular and digestive system account for the largest loss of hospital gross revenue when elective surgery is postponed. As hospital bed capacity increases following the COVID-19 pandemic, restoring volume of these elective cases will help maintain revenue. In these estimates, adopting universal masking would help to avoid overcapacity in all states.

Keywords: Available hospital beds; COVID-19 pandemic; Critical care capacity; Overcapacity; Resource allocation.

Fig. 1

Average Proportion of Inpatient and ICU Person Days per State Resulting from Elective Surgery. Data from 161 million Marketscan patients from 2008 to 2017 displaying aggregated counts of hospital and ICU beds in total and those resulting from elective surgery averaged across all states. For each month

Fig. 2

Financial contribution of major diagnostic categories (MDC) to gross hospital revenue. Data from 161 million Marketscan patients from 2008 to 2017 displaying aggregated gross hospital revenue by surgery type, separated by major diagnostic category (MDC), across the US. Levels are listed in descending order the percentage of each MDC category contributed by elective inpatient cases. Level width is proportional to the absolute value in US dollars

Fig. 3

Regional variation by state in percentage financial contribution of non-elective, elective inpatient and outpatient surgeries. Panel a shows percent financial contribution to gross hospital revenue by state for non-elective cases. Panel b shows elective inpatient cases. Panel c shows outpatient cases

Fig. 4

ICU Capacity across the US with and without cancelling elective surgeries. a-f Impact of Cancelling All Elective OR Cases on ICU Bed Availability if 5% of U.S. Population Infected with COVID-19. Estimates of low (a), mean (c) and high (e) IHME models. Additional capacity through cancellation of elective cases (b, d, f) was determined by applying estimates of the occupied and unoccupied beds resulting from elective surgery from the Marketscan database to the Harvard Global Health Institute (HGHI) estimates of total inpatient and ICU beds in each state