Delaying Surgery Cost Hospitals, How They Can Prevent Revenue Losses

Hospitals lost millions in revenue when leaders decided to delay or cancel elective surgical care during the initial wave of COVID-19. But the decision may also have long-term costs associated with it, suggest two new studies from the American College of Surgeons (ACS).

One study took place at the University of Pennsylvania, Philadelphia, where researchers found three hospitals in the system lost a total of $99 million in net revenue from all surgical departments from March to July 2020. The department of surgery also lost $58 million during the first wave.

Researchers reported a median net revenue decline of $636,952 per month per division for the department of surgery in the first wave, which they found using updated data presented during the virtual ACS Clinical Congress.

The university health system lost 42 percent of its net revenue for five months from postponing surgical services over the course of just two months.

The other study presented at the virtual Clinical Congress found that hospitals nationwide lost $1.53 billion from missed elective pediatric procedures alone. Researchers of this study, which analyzed roughly the same period, said hospitals were slow to make up the surgical backlog and lost income. They predicted a median time to recovery of one year.

Long-term costs of delaying surgical care may be higher than the revenue losses calculated in the studies though. Delays can lead to worsening medical conditions that not only impact quality of life for patients but also lead to more utilization and higher costs in the long term.

“Whenever possible, we should not delay surgical care for our patients,” said the first study’s lead investigator, Daniel M. Mazzaferro, MD, MBA, a plastic surgery resident at the Perelman School of Medicine at the University of Pennsylvania. “Surgery is a critical asset to the survivability of a [healthcare] system.”

ASC said in a press release that surgical services are an “important financial engine” for hospitals and delaying the procedures for even a short period of time can have a significant impact on a facility’s financial security.

Fortunately, many hospitals were able to resume elective surgical procedures after the initial wave of COVID-19, even though cases have periodically surged.

The health system lost significantly less revenue during the second wave of COVID-19 from October 2020 through February 2021. At that time, the health system did not postpone elective surgeries because it was in a “better position than the first time around” with “more personal protective equipment or PPE, better COVID-19 therapies, and a better understanding of the virus,” stated Liza Wu, MD, FACS, senior investigator of this study and professor of surgery at the Perelman School of Medicine.

The health system lost $274,626 each month for each division during the second wave, the study showed.

The surgical department started a new triage process for elective surgeries by the second wave of the COVID-19 pandemic in the US, Wu explained. The process included a new scoring system called the Medically Necessary, Time-Sensitive Scoring (MeNTS), which was described by University of Chicago physicians in a 2020 Journal of the American College of Surgeons study.

According to the original study, MeNTS is a scoring system that “systematically integrates factors that are novel to the COVID-19 pandemic (resource limitations, COVID-19 transmission risk) to facilitate decision-making and triage for” applicable procedures.

“This scoring system appropriately weighs individual patient risks with the ethical necessity of optimizing public health concerns. The transparency offered by this process to surgeons, perioperative teams, trainees, and even to patients, can inform the complex and difficult discussions involving the decision to proceed or postpone procedures, as well as specific COVID-19-related perioperative risks,” University of Chicago physicians explained in the study.

Hospitals need to improve long-term planning to prevent surgical care shutdowns in the future, especially since COVID-19 cases remain high in many areas of the country, researchers from both studies agreed.

Optimizing excess resource capacity that existed before the pandemic or increasing capacity for performing procedures based on current resources is key, said Sourav Bose, MD, MBA, MSc, the second study’s lead author and a postdoctoral research fellow at Children’s Hospital of Philadelphia, at the time of the study. Hospitals can, for example, expand hours for operations.

Mazzaferro also advised hospitals to increase hospital bed capacity through alternative methods, such as sending an overflow of surgical patients to other care sites that have room. Hospitals should also appropriately triage elective operations, ensure adequate PPE supply, and mandate COVID-19 vaccines or frequently test staff.

“Our message isn’t all about revenue. It’s about how to efficiently manage surgical patients’ needs,” Bose said. “Hospital systems must assess their operations management strategies to optimize the availability of surgical resources for patients with the greatest need.”