~~~~
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~~~~
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COpy 
fILE 
CORONARY ARTERY BYPASS GRAFT (CABG) SURGERY 
ASSURING QUALITY WHILE CONTROLLING MEDICARE COSTS 
OFFICE OF INSPECTOR GENERAL 
OFFICE OF ANALYSIS AND INSPECTIONS 
':'3 
".......oz.. I"'E  ";t. 
s;.r". 
August 1987  Office of Inspector

The mission of the Office of Inspector General 
 OIG) is to

promote the efficiency, effectiveness and integri ty of
programs in the Uni 
ted States Department of Health and Human
Services 
(HHS). It does this by developing methods to
detect and prevent fraud, waste and abuse. 
Created by
statute in 1976, the Inspector General keeps both the

Secretary and the Congress fully and currently informed

about programs or management problems and recommends

corrective action. The OIG performs its mission by

conducting audits, investigations and inspections 
approximately 1,  wi th

200 staff strategically located around the

country. 
Office of Analysis and Inspections

This report is produced by the Office of Analysis and
Inspections 
(OAI), one of the three major offices within the
OIG. 
The other two are the Office of Audi 
of Investigations.  t and the Office
OAI conducts inspections which are,
typically, short-term studies designed to determine program

effecti veness, efficiency 
and vulnerabili ty to fraud or

abus e . 
This Report

Enti tIed "Coronary Artery Bypass Graft 
(CABG) Surgery 

Assuring Quali ty While Controlling Medicare Costs, 
" this

report suggests changes in Medicare policies that would

assure quali ty of care and reduce program costs.

The study was prepared by the Regional Inspector
. General,
Office of Analysis and Inspections, Region IX.
Participating in this project were the following staff: 
Paul Gottlober, National Project Director, Region IX

Thomas Purvis, Senior Program 
Analyst, Region IX
Kathy Admire, Program Analyst, Region IX 
Kitty Ahern, Program Analyst, Region V
Leonard Czajka, Program 
Analyst, Reg ion IX 
Deborah Harvey, Program Analyst, Region IX 
Mary Hogan, Program Analyst, Headquarters 
Rita Lutticken, Program Analyst, Region IX 
Neil Merino, Program Analyst, Region IX 
Joy Quill, Program Analyst, Region III 
Barry Steeley, Branch 
Chief, Headquarters
Apryl Williams, Program 
Analyst, Region IX
Marcia Wong, Secretary, Region IX  CORONARY  SURGERY 
ARTERY BYPASS GRAFT  (CABG) 
ASSURING QUALITY WHILE CONTROLLING MEDICARE COSTS 
RICHARD P. KUSSEROW  August 1987

INSPECTOR GENERAL

OAI - 09 - 86 - a a 076  TABLE OF CONTENTS

PAGE 
Execu t i ve Summary 
Introduction 
Findings 
Medicare CABG Costs Will Continue to Escalate

Selecti ve Contracting 
Can Assure Quality Care

and Save Money

Surgeon Fees and Payments: 
The Reasonable 
Charge Is Not Always Reasonable

Inconsistent Carrier Utilization Policies Can

Be Inequi table and Costly

Recommendations 
Appendices 
Ref erences  GROWTH IN CABG SURGERIES

300000 
ALL CABG 
250000 
MEDICARE CABG 
200000 
150000 
1 00000 
50000 
1975 1977 1979 1981 1983 
1985 
1976 1978 1980 1982 
1984 
YEARS  INTRODUCTION 
In 1985, approximately  persons underwent coronary
250,  OOD 
artery bypass graft (CABG) surgery. Medicare beneficiaries 
accounted for over 25 percent of this total. More , than
63, 000 hospital bills were processed in 1985 by Medicare 
fiscal intermediaries for Diagnostic Related Group 
(DRG)
codes 106 and 107 (coronary bypass wi th and wi thout cardiac
catheterization, respectively). 
Those bills resulted in 
billion. 
payments to hospitals of over $1  The Office of
Inspector General 
(OIG) estimates that physician and other 
Part B payments for these benef iciaries totaled 
approximately $500 million, br 
inging Medicare s overall 
costs for services associated with coronary bypass surgery 
to over $1. 5 billion (see Appendix A). 
MEDICARE SHARE OF TOTAL CABG DOLLARS 
BASED ON PUBLISHED ESTIMATES OF TOTAL EXPENDITURES 
NON-MEDICARE CABG DOLlAS (IN MILLIONS) 
MEDICARE CABG DOLLARS (iN MilLIONS) 
TOTAL 1985 ESTIMATED COSTS = $5 BilLION  ~~~
CORONARY ARTERIES 
-p,o.." .0..0" '''0'' 
LEFT MAIN

CORONARY ARTERY

divides into bo brdanecihne.g
Th left anterior 
(LA) suppliehs belo o to

CORONTAHER YR IAGRHTTE
 RY  tfhro nlte fotf  th  including
ventricle. '!
supplies bloo to  circulex' portion supplies
orifg htth s hidee ta.n  bottan bhleoot .t o th baCk of th
Circum lie x Coronery Artery 
CORONARY ARTERY BYPASS GRAFTS 
BYPASS GRAFTS

ftr\Ia nc toh raaortt aa rtteo
ries.  Dur ing the course of fieldwork, four of the inspection team 
members observed CABG surgery at seven major medical centers 
that speciali ze in cardiac care. By observing the surgery, 
the team members gained a better appreciation for the nature 
of the surgery and the functions and responsibilities of
each member of the surg 
ical team. 
What Is CABG Surgery?

Coronary artery bypass graft surgery is most commonly 
performed to alleviate the chest pain (angina pectoris) that 
results from the heart being deprived of an adequate supply of 
freshly oxygenated blood. Typical bypass surgery involves an 
hour or more of preparation by the nurses, technicians and 
anesthesiologist before the surgeon enters the operating room. 
After the patient has been "prepped, " anestheti zed and 
intubated, the surgeon and his assistant proceed to make 
incisions in the patient' s leg and chest. The saphenous vein 
is extracted from the leg, the sternum is sawed in half and 
the chest cavi ty is clamped open. If the internal mammary
artery 
(IMA) wi II be used, it is extracted from the chest
wall. 
The patient is then put on the heart-lung pump which 
assumes the heart' s functions dur ing the grafting procedure.
The grafting procedure consists of taking ei 
ther or both of 
the extracted vessels and using them to circumvent coronary 
arteries that have become blocked and are restricting the flow 
of blood to the heart. The grafts are attached to the aorta
and the af fected coronary arter ies below the places where they 
are clogged. 
elective.  -free, 
The surgery is usually  Whi Ie it is not ri sk 
it is generally considered a safe and effective remedy for
angina. 
Although using one or both IMAs has increased the 
amount of time for surgery (because it is more difficult to 
hours. 
remove), total surg ical time rarely exceeds 4  The 
average hospi tal stay has been reduced from 16 days in 1980 to 
less than 10 days in 1986. 
The Controversies Surrounding CABG

Although all the surgeons and cardiologists who were

interviewed agree that CABG may be the only remedy for some

victims of coronary disease, CABG has received a considerable

amount of negative publicity in the last year or two. 
Questions have been raised about the medical necessi ty of the 
procedure for patients who have single or double vessel 
disease but are asymptomatic, patients who have stable angina 
and patients who have not been treated very aggressively wi th 
medical therapy. Some physicians have expressed opinions that 
not only is CABG overused, but also ang ioplasty and angiography 
(a diagnostic test where a catheter is inserted and dye

in jected to visuali ze the locations 
and sever i ty of blocked 
arter ies) may not be medically necessary in as many as 

percent of the cases.
 Another controversy surrounding CABG involves the hospi tals 
where the surgery is performed. Are better results obtained 
li ties that 
in faci  speciali ze in cardiac surgery? If so, how 
many bypass surgeries should be done in a hospi tal for it to 
be considered satisfactory? How can hospitals be compared and
how can surgical outcomes be measured? Are charges less 
hospi tals that specialize? 
The costs associated wi th CABGi thsaevel fb.e en nearly as 
ical 
con troversia1 as the surgery  Among surg 
is one of the most expensive. Charges are
procedures, CABG 
generated by the hospi tal, the surgeon, one or more assistant
surgeons, an anesthesiolog ist, a cardiolog ist and, sometimes, 
laboratories, pump perfusionists (who operate the heart-lung 
machine dur ing surgery) and nurse anesthetists. 
Improved Quality and Efficiency at Higher Vo1ume Hospitals

In January 1985, Blue Shield of California (BSC), the Medicare 
carrier for northern California, approached the GIG about 
sponsor ing a study concerning CABG surgery. The carrier was 
concerned about the high cost of the surgery and was interested 
tures wi thout 
in finding some means of controlling CABG expendi 
of care. 
compromising quali ty  The OIG arranged funding for the 
study through the Health Care Financing Administration (HCFA) 
Insti tute 
and a contract was entered into between BSC and the 
for Health Policy Studies of the Universi ty of California 
School of Medicine in San Francisco. Since there have been 
many major studies concerning the medical necessi ty of bypass 
surgery and its long-range benefits, BSC decided that its study
should analyze hospi tal discharge data to see if there was any 
outcomes. 
correlation between volume of surgery and surgical 
The April 1986 BSC report, which was published, in part, in 
ican 
the February  Journal of the Amer 
13, 1987 issue of the 
Medical Association  (see Appendix B), states that hospi tals in 
California that perform at least 200 CABG surgeries each year

have better outcomes in terms of fewer deaths, lower charges

and shorter lengths of stay than those that do not speciali ze

in bypass surgery. Blue Shield concluded that selective

contracting wi th high volume hospi tals and physicians to 
perform CABG surgery would be beneficial for patients as well

as insurers. 
The need to assure that Medicare beneficiaries receive optimum 
facili ties 
medical care in highly qualified  was underscored by
otis  Services, 
R. Bowen, M.D., Secretary of Health and Human 
in the proposed notice concerning Medicare coverage of heart

transplants which was published  Federal Register

October 17" 1986. Heart transplain nthte s would only be covered 
in facili ties 
they were performed  that were approved by the 
experience, 
Department because they have demonstrated 
outcomes. 
expertise and satisfactory patient  The criteria 
contained in the proposed notice address all of the quali ty of

care concerns that were discussed in the BSC report on CABG.  Objectives of This Inspection

The OIG inspection was designed to (I) document current medical
practices for the deli very of quali 
ty CABG surgery, (2) obtain
expert opinion on the most eff icient and economical deli very 
of CABG surgery, (3) determine actual Medicare hospi tal and 
medical insurance allowances for a random sample of 
beneficiaries who underwent CABG surgery during 1984 and 1985 
and (4) identify recommendations that would result in assuring 
signi ficant
quali ty of care for Medicare beneficiaries and 
program savings. 
Conceptua1 Approach and Methodology

The OIG Office of Analysis and Inspections worked closely wi 
the University of California and BSC during the course
their study. 
Several issues from the BSC study and related 
work by the carrier were identified that could have significant 
relevance for the Medicare program if they exist in other 
California. 
States to the same degree they exist in  After a 
series of interviews wi 
th prominent cardiologists and 
cardiovascular surgeons to verify the issues, the OIG decided 
conducted. 
that a national inspection should be  The 
inspection was designed so that information could be obtained 
through data as well as interviews. By utilizing both 
interviews and record reviews, the inspection team obtained 
expert opinions which were compared wi th actual Medicare 
records. 
beneficiary history 
Discussions were held wi th surgeons and cardiologists who had 
practi tioners. 
pioneered the CABG procedure as well as current 
Representatives of private industry, regulatory agencies, State
agencies and carr ier medical staff were in terviewed. 
Interviews were held wi th 28 thoracic/cardiovascular surgeons, 
administrators. 
Detai led 
16 cardiolog ists and 2 hospi tal 
discussions were conducted with 19 health maintenance
organizations and 
4 companies with employee health plans
offer ing coronary care coverage. Meetings were held wi th the 
Amer ican Medical Association, the Amer ican Hospi tal Association 
of Health. 
and the National Insti tute  Contact was made wi 
the Amer ican College of Thoracic Surgeons, the Society of

Thoracic Surgeons and the American Association of Thoracic

Surgeons. 
The design of this inspection required that a method be 
costs for 
developed to determine the combined CABG surgery 
current 
Medicare Parts A and B. This data is not available in 
HCFA systems. To obtain total CABG costs, a sample of 204

Medicare benef iciaries was selected from the "Part A 
Intermediary Bill History" file maintained by the HCFA Bureau

The sampled benef 
of Data Management and Strategy.  iciar ies 
were admi tted to a hospital in fiscal years 1984 or 1985 and 
107. 
were discharged wi th a DRG code of 106 or  These 204 
beneficiaries represent a random sample comprised of two-tenths  ::::::
of 1 percent of the bill history file, as updated through 
1985.  fi Ie 
December 31,  Records in this  were selected on the 
bas is of the terminal digits of the Health Insurance Claim 
(hospital insurance) bi 
number (HICN). Complete Part A 
histories were reconstructed for these beneficiaries and 
Health Insurance Printouts (HIPOs) were provided by the HCFA 
Off ice of Health Prog!am Systems. The HIPOs were used to 
(medical 
identify the carriers that had processed the Part B 
sintsauyra.n ce) bills that related to the CABG surgery hospital
See Appendix A for more information on the sample and
methodology. 
Medicare carriers were requested to provide beneficiary 
histories and to complete questionnaires that described their 
services. 
payment policies for CABG surgery and related 
years 
Carrier prevailing charge data was requested for fiscal 
1984 and 1985. Responses were received and analyzed from 

carriers servicing 41 States. Claims histories were obtained

for 157 of the 204 beneficiaries.

Structured discussion guides were utilized. Lines of inquiry
included: 
the respective roles of the surgeon, cardiologist, 
assistant surgeon, anesthesiologist, perfusionist, physician 
assistant and nurse; the use of pre-operative diagnostic 
tests; the appropriateness of outpatient services; the 
ical candidates; the impact of al 
selection of surg  ternati ve 
therapies; the time involved in surgery and the impact of 
technolog ical advances; the number of grafts; the length 
hospi tali za tion; the number of surger ies performed; and the 
operative care. 
responsibili ty for post-
STATES VISITED BY THE INSPECTION TEAM  FINDINGS 
MEDICARE CARG COSTS WILL CONTINUE TO ESCALATE 
inspection 
The physicians who were interviewed during this 
indicated that they expect the demand for CABG surgery for 
Medicare beneficiaries to increase even though alternative 
disease. 
therapies have been developed to treat coronary heart 
Continued growth in the demand for bypass surgery is predicted 
because of the extent of cardiovascular disease in our 
society, the aging of the population, the reduced risk 
associated with the surgery, the number of people who will
need re- bypass 
operations 10 to 12 years after their first 
surgery and the belief that alternative remedies are only 
temporary solutions. 
increased 
The development of new medical therapies and the 
acceptance of percutaneous trans1uminal coronary angioplasty

(PTCA) have altered the characteristics of the bypass patient
population. 
Angioplasty is widely accepted as an appropriate 
procedure for coronary disease involving one or two occluded 
the patient' 
arter ies, if  s condi tion and the locations and 
lentgethrsi aof.  the blockages meet certain accepted medical
cr i  The procedure, which is performed by cardiologists 
in catheteri zation laboratories rather than by surgeons 
operating rooms, involves the use of a balalrotoen rcya.t heter which 
is commonly inserted through the femoral  When the 
artery, 
catheter reaches the blocked portion of the coronary 
the balloon tip is inflated and, if the procedure
effecti ve, the plaque is split and the artery is dilated 
allowing increased flow of blood.

Because the number of cardiologists recommending and

performing angiop1asty is constantly increasing, - fewer 
patients are being referred to thoracic and cardiovascular

surgeons for bypass consideration in the early or less acute

stages of their coronary disease. Initial CABG referrals are 
commonly limi ted to patients who are not cafnadiildeatde.s  for 
Like 
angioplasty or those whom angioplasty has 
ang ioplasty, the development of new drugs, particularly the 
calcium and beta blockers, ultimately results in surgeons 
disease. 
seeing patients who have more acute coronary artery 
Because these drugs provide non-surgical relief from angina 
pain for many victims of coronary disease, it is only after 
drug therapy has failed that patients are recommended for CABG 
surgery. 
The reduced risk associated with CABG surgery means that 
patients who are 70 or 80 years old may now be considered 
bypass candidates and would not be automatically excluded 
exist 
because they have medical conditions or diseases that co- their coronary disease. 
wi th  Also, patients who had 
angioplasty or their first bypass operation before they became 
Medicare beneficiaries may need their first or second bypass 
surgery after the age of 65. 
The net effect of these changes is that CABG patients are

older and sicker. Furthermore, the increased use of

alternative therapies may be merely delaying the need for

surgery which will ultimately increase CABG costs for

Medicare. 
SELECTIVE CONTRACTING CAN ASSURE

QUALITY CARE AND SAVE MONEY

The Blue Shield of CaliforniajUniversi 
ty of California study 
validated the findings of previous studies that better 
surgical results are obtained in institutions that specialize
in cardiac care. 
This OIG inspection found that hospitals 
which perform more than 200 coronary bypass surgeries
annually not only have speciali 
zed personnel who participate 
in the surgical procedure, but also have discrete units 
devoted exclusively to cardiac patients. Frequently, these 
uni ts are staffed with a coordinator (usually a registered 
nurse) who is employed by, or directly reports to, the 
cardiovascular surgery group that performs all of the bypass 
hospital. 
surgeries at that  In some of the hospi tals, the
surgeons are salaried employees of the hospi tal corporation or 
facili ty. 
a related corporation that staffs the  The 
continui ty of treatment and care that these relationships 
provide may, at least in part, account for the lower mortali 
study. 
and morbidi ty rates found in the Blue Shield  These 
faci Ii tate 
arrangements may also  the formulation of package 
pricing for CABG medical, surgical and hospi tal expenses. 
The Deve10pment of Package prices for CABG

No longer the exclusive province of pioneer ing surgeons and

hospi tals, CABG surgery can now be performed by almost 2, 000 
hospitals. 
thoracic and cardiovascular surgeons in 698 
Because there are more hospitals and surgeons performing

coronary bypass surgery than there were IO years ago, many of

the pioneer ing hospitals and surgeons have fewer CABG

patients. 
Also, cost cutting efforts by Medicare and other 
rates. 
insurers have resulted in reduced hospital occupancy 
. For these reasons, there is increased competi tion for patients 
and increased willingness on the part of health care providers

to negotiate rates. In some instances, providers have

ini tiated the contracting concept while in others the pr imary 
catalyst. 
payer has been the 
In the spring of 1984, the Texas Heart Institute (THI) 
established a subsidiary corporation whose purpose was to take
advantage of " 
the economies of scale " by developing package  pr ices for certain cardiovascular procedures. Since THI is 
one of the largest providers of cardiac surgery in the Nation, 
the subs idiary, CardioVascular Care, was able to draw upon an 
extensive data base to arrive at a schedule of package prices.
The Texas Heart Institute, like some other providers of CABG 
surgery, has experienced a reduction in its bypass patient
census. 
Between 1980 and 1985, the number of surgeries had
dropped from approximately 3, 500 to 2, 500. 
In a demonstration 
project proposal to HCFA, CardioVascular Care indicated that 
it is offering a package price of $13, 800 for coronary bypass 
patients. 
surgery for Medicare and non-Medicare  The package 
tali zation for 
pr ice includes hospi  up to 12 days as well as 
surgeon, the cardiologist,
the services of the cardiovascular 
tests. 
associated staff and all customary laboratory  Contracts 
have been negotiated with more than 30 organi zations that are 
primary payers of health care for over 1. 5 million people. 
Although THI was probably the first provider to offer a fixed 
follow. 
pr ice for CABG surgery, others were soon to  In the 
private sector, prudent buyers of health care have been able 
to purchase medical services at significantly lower costs when 
they take advantage of the fixed price offers or negotiate 
initiative. 
contracts on their own  Of the 19 health 
maintenance organizations (HMOs) that were contacted during 
the course of this inspection, 7 have negotiated all-inclusive 
package pr ice contracts wi th medical centers to provide CABG 
surgery for their enrollees. Package prices for HMOs range 
from a low of $8, 640 for a 12-day hospital stay to $16, 300 for 
days. 
stays of up to 11  This includes all insti tution-related 
fees. 
costs as well as surgical team  In highly competi ti ve 
markets, it was found that even lower rates can be obtained. 
In one metropoli tan area, competi tion has led to package 
000. 
prices as low as $7,  In contrast, Medicare reimbursement 
continues at traditional cost levels based on Part A DRG rates 
and Part B reasonable charge dete  ons 
Medicare Mean Allowance Compared With Package Prices 
$24 588  $13 ,800  $16,300  $8,640 
Medicare mean  THI  HMO A  HMOB 
The Medicare mean is based on the inspection sub-sample of 6 to 12-day hospital stays.  There is no question that the savings accrued from these 
negotiated rates are substantial. A study by the Metropolitan 
Life Insurance Company of the hospi tal and physician charges it 
received for CABG surgeries from January 1982 through July 1983 
showed that the average national charges for CABG totalled
$21, 800 per case. Metropolitan also found significant 
surgery. 
variations in the regional charges for bypass  The 
highest average regional charge ($29, 500) was in the Pacific
division 
(more specifically, California) and the lowest 
average regional charge ($18, 300) was in the East South 
Central division. Although the average length of stay for the 
Metropoli tan data was between 12 and IS days, this would not 
negate the substantial savings that the contract prices offer. 
A specific example of contract price savings further 
illustrates this: Texas Heart Insti tute ' s contract price of
$13, 800 for a 12-day hospital stay is $6, 000 less than the 
Metropoli tan study  s average charge for a 13-day hospi tal stay 
I S home 
in THI  State, Texas. 
In over 80 percent of the Medicare cases that were included in
the OIG inspection sample, the hospi 
ice.  tal charges alone exceeded
the THI contract pr 
In Texas, the hospital charges 
exceeded the contract price in 9 out of the 10 sample cases. 
In 7 out of 10 Texas cases, the actual DRG payment exceeded 
the $13, 800 THI price. 
To determine potential savings for the Medicare program, 
sample cases that involved lengths of stay from 6 to 12 days 
800. 
were compared with the THI contract price of $13, Annual 
million. 
savings are estimated to exceed $192  Even more 
savings would accrue if the package price 9wa.s  the same as the 
one shown for HMO B in the chart on page  Detai Is 
concerning the methodology for computing the projected cost 
savings are in Appendix 
Do Contracts Work?

Fixed price contracts frequently require that patients travel 
outside of their communi ties for surgery; in one contract, the 
patient is sent 2, 000 miles away for his bypass operation.
Even wi thout contracts, patients, wi th or without the advice 
of their cardiologists, often choose to have their surgery at 
a major bypass center located away from home. At least three 
of the centers visited in this inspection receive more than 
percent of their patients from other States. To encourage 
contract utilization, some insurance companies and HMOs offer 
free transportation and/or the waiver of coinsurance and
deductibles. 
In the most common scenario, the family physician refers his 
patient to a cardiolog ist when heart disease is suspected. 
Then, if coronary artery disease is diagnosed and a1 ternati ve 
therapies fail, the cardiologist refers the patient to a 
surgery. 
thoracic or cardiovascular surgeon for bypass  referral. 
angiogram is sent to the surgeon at the time of the 
The surgeons who were interviewed in this inspection indicated 
that more than 80 percent of the referrals actually undergo
surgery. 
The bypass patient usually does not see the surgeon 
more than pnce or twice prior to surgery and, post-operatively,
only sees the surgeon while in the coronary care unit. It is 
the cardiologist and the family physician who maintain an 
patient. 
ongoing relationship with the  Therefore, the lack of 
any pre-
existing relationship between the patient and the 
si tuation. 
contract surgeon is not a unique  The only 
noticeable change in the physician/patient relationship 
that a contract cardiologist will visit the patient while he 
is in the hospi tal, rather than the patient' s personal
cardiologist. 
When the patient leaves the hospi tal, a report 
is sent to the patient' s cardiologist who renders any 
up care. 
necessary follow-
Office of Inspector General staff contacted four insurers to 
find out about their referral process and experience with 
actual patient care under their negotiated package price
contracts. 
The earliest contract has been in effect since 
November 1984. A synopsis of their experience follows. 
When it is determined that an enrollee is a candidate for 
bypass, the insurers notify the patient that he can have 
surgery at a local hospital or travel out of State to take 
advantage of the package contract arrangement. The insurers 
have found that even though transportation costs are borne 
by the patient, the majority of their bypass patients have 
facility. 
chosen to travel to the contract  One HMO estimated 
that 90 percent of their patients would choose to travel out 
of State to the contract medical center because of its good
reputation. 
All the insurers implemented the contracts for cardiac care 

an alternative to their usual reimbursement policy because the

packages are less costly. One HMO has two cardiac care

packages, both at the same price. The only difference is that 
one contract is with a local medical center and the other 
of-State provider. 
wi th an out- Two of the insurers offer a 
financial incentive to the patients by waiving coinsurance and 
deductibles to compensate for the transportation and lodging 
expenses. 
According to the insurers, both they and their patients have
been very satisfied wi 
th the process of referral and the high 
quali ty of service under their contracts. All the insurers 
plan to renew the cardiac care contracts when the current 
ones expire. Two self -insured employers commented that local 
physicians rendering cardiac care services have approached the 
company about negotiating fixed-price contracts; however, the
insurers are so satisf 
ied wi th the quality of care rendered by 
the present provider, that they will automatically renew the 
con tracts wi thout soliciting other bids.  The purchasers have found that package price contract 
arrangements save program dollars and administrative costs, 
care. 
while maintaining high quality  They not only eliminate 
the need for usual and customary or reasonable charge 
determinations but also the need for pre-payment and
post-
payment utilization screens. 
SURGEON FEES AND PAYMENTS: 
THE REASONABLE CHARGE IS NOT ALWAYS REASONABLE 
The New England Journal of Medicine published an 
In July 1981, 

article by Dr. Benson Roe, one of the pioneer CABG surgeons. 
In his article and in an OIG interview in 1986, Dr. Roe 
questioned the efficacy of using the reasonable charge concept
to determine physician payments. 
As an example of the failure 
of the reasonable charge methodology, Dr. Roe discussed the 
changes in the primary surgeon s role and responsibility since 
CABG surgery was developed. According to the article, the 
surgery has become safer and simpler and many of the surgeon 
previous responsibili ties have been delegated to other 
professionals (cardiologists, anesthesiologists and pump
technicians). 
Nevertheless, the surgeon s fee has escalated 
and the fees of the other professionals, which are paid 
separately, merely add to the total cost of bypass surgery. 
The reasonable charge reimbursement system recognizes all of 
the charges but none of the changes that would reduce the 
surgeon 
s payment. 
The concerns raised by Dr. Roe in 1981 are still valid
1986. 
Almost all of the surgeons who were interviewed in the 
OIG inspection indicated that their CABG surgical fees were 
originally based on the charges that were being made by other 
operation. 
surgeons who were performing the  None of the 
surgeons indicated that any criteria were used other than the 
charges of others or charges that they were making for what 
they deemed to be "comparable " surgeries when they began their 
CABG surgery practice. Although some of the surgeons 
indicated that their Medicare reimbursement was too low, none 
of them had ever reduced their charge to Medicare to reflect 
responsibility. 
any economies, efficiencies, reduced risk or 
Some of the surgeons complained about the high charges of 
their peers and the unfairness of Medicare recogni zing the 
thout adjusting their 
inflated charges of new surgeons wi 
allowances accordingly. Virtually all of the physicians that 
were interviewed voiced some dissatisfaction with the 
reasonable charge system. 
More Dollars for More Grafts?

Medicare reasonable charge determinations for CABG surgery are 
based upon the HCFA Common Procedure Coding System (HCPCS). 
The HCPCS codes for CABG surgery are the same as those in the 
Physicians 
' Current Procedural Terminology" (CPT) coding  system that was developed by the American Medical Association. 
There are six codes for coronary artery bypass surgery where
the patient' 
grafts.  s leg vein and/or mammary artery are used for the
The distinguishing factor among the six codes is the 
number of graftings performed during surgery: 
CPT (HCPCS) CABG SURGERY CODES 
33510  Coronary artery bypass, autogenous graft, e.g.,
saphenous vein or internal mammary artery;
single  graft
33511  two  coronary grafts

33512  three  coronary grafts

33513  four  coronary grafts

five 
33514  coronary grafts

33516  six or more coronary grafts

One of these six codes was billed for each of the 204 Medicare 
beneficiaries in the inspection sample. 
Before HCFA mandated that carriers use CPT codes, many 
carriers relied on the California Relative Value Studies 
claims. 
(CRVS) of 1964, 1969 and 1974 to code and pay  The 
1974 CRVS lists three codes for CABG surgery involving the
artery: 
saphenous vein or mammary 
33510  single  artery

33515  two  coronary arteries

three 
33518  (or more) coronary arteries

These codes were assigned unit values of 25, 32 and 38,
respectively . 
The three codes that were added when HCPCS was implemented have 
resulted in increased CABG expenditures by most Medicare 
carr iers. Only 8 of the 38 carr iers surveyed restr ict 
paarytmeernites st.o  a given amount if the surgery involves 3 or more
One of these actually allows the same amount if two 
or more arter ies are involved. 
An addi tional six carriers 
arteries. 
make no pricing distinction among four or more 
The thoracic surgeons who were interviewed agree that each 
addi tional graft takes approximately IO to 20 minutes. The OIG 
analyzed carrier pricing for the six codes and found that for 
each additional graft a surgeon can receive as much as $2, 297 
or as little as $3 depending on the prevailing charge in a
ggir vaefnt lso.c ali ty. Five carriers actually pay less for more
In one large. 
Midwestern state, the carrier allows 
three. 
$822 less for four grafts than for  For these five 
carr iers, the time for addi tional grafts does not yield
addi tional compensation because reasonable charge 
determinations merely represent the charge data accumulated 
for each code wi thout regard to the other codes.  Over 60 percent of the surgeons who were interviewed agree 
that the same payment for three or more grafts is appropriate. 
Of those thoracic surgeons, 50 percent do not object to the 
same payment for all CABG surgeries regardless of the number of
grafts involved. 
Some of the surgeons believe that allowing 
higher payments for additional grafts encourages abuse by 
practitioners. 
providing economic incentives for unscrupulous 
They also stated that more than four grafts may be harmful to
the patient. 
Prevai1ing Charges Vary Significant1y Throughout the Nation

The average number of grafts currently performed in bypass 
four. 
surgery is between three and  Carrier prevailing charges 
for CPT code 33512 (three grafts) for fiscal years 1984 and
1985 range from $2, 487 in Colorado to $6, 000 in New York. The 
highest prevailing charge regardless of the number of grafts 
is in New Jersey where the prevailing charge for four grafts 
or more  Conversely, the maximum prevailing charge 
is $6, 020 
regardless of the number of grafts in Rhode Island is $2, 587. 
The Metropolitan Life Insurance Company found that the highest

surgeons ' charges were in California, Flor ida and Texas. The 
OIG found that the highest prevailing charges are in southern 
York. 
California, Texas, New Jersey and Metropolitan New  These 
locations exceeded the mean charge for all of the highest 
carrier prevailings by approximately 30 percent. 
For comparable locations, thet idia lff.e rence in the maximum 
prevai ling charge is subs tan  For example, the highest 
prevailing charge in northern California is $1, 466 less than 
it is in southern California. The highest prevailing charge

in Massachusetts is $2, 477 less than it is in New Jersey.

CABG SURGERY PREVAILING CHARGES (ALL CABG CODES) 
MASS. 3543 2843 
CONN. 4750 3003 
N.J. 6020 4300

RJ. 2587 1779 
C. 
5775 3439 
MD. 5715 2218 
Highest PrevaiRng Charge

Lowest  P'e al/Jg  Charge
 Medicare Reasonable Charges Significantly Exceed prudent Buyer

Costs 
its
While Medicare continues to reimburse surgeons based on 
reasonable. charge criteria, other purchasers of health care 
have been able tb negotiate reductions of their "usual and 
customary " payments. 
When the revised payment is in the form 
of an all-inclusive package price, it is difficult to

determine the discounted price for the hospi tal and physician

components. 
The agreement is between the hospital or medical 
center and the physician group whose services are included in

the package arrangement. The purchaser of the package 

not aware of the distribution of the reimbursement between the 
ician group. 
hospi tal and phys  In some cases, however, an HMO 
or insurance company has negotiated a discount price for the

physician group only. 
The most common discount arrangement involves a percentage 

usual and customary" or fee-for-service charges. Frequently, 
the agreement will provide the surgeon with 80 percent of his 
usual fee. In some agreements, the surgeon is expected to 
absorb the costs of assistant surgeons or physician assistants
in the discounted payment. 
These arrangements are often the 
first step towards the development of all-inclusive package

pr ices. Al though the OIG did not determine the exact number 
of these agreements that have been negotiated, several of the 
physicians who were interviewed discussed their provisions.
In southern Cali  i cal group has agreed to 
fornia, one surg 
000 
accept $5,  (80 percent of its usual and customary) as 
payment for the services of the surgeon and any assistant 
surgeons or trained technicians who participate in the CABG 
surgery. 
For Medicare, those same services will cost 
$l, 681
more than the discounted pr ice: 
Bill ed  Allowed  Paid 
Surgeon  $6, 200  $5, 966  $4, 773 
Assistant surgeon  240  193  954 
Second assistant surgeon  I, 240  193  954 
$ 8, 680  $8, 352  $6, 681 
least 
Several HMOs have negotiated similar agreements and at 
one Medicare carrier, in a pilot project for its private
business, has begun paying a "wrap price.  The "wrap price 
represents a single payment for all the physicians and 
bills. It 
technicians who would normally submit separate  saves 
the carrier $1,100 per CABG surgery. Based on the carrier 
calculated savings, consolidating payments for the surgeon, 
anesthesiologist and assistant surgeons could save Medicare 
over $69 million each year for 63, 000 surgeries. 
As these agreements proliferate around the country, the 
disparity between what Medicare pays and what other purchasers 
pay will become more pronounced.  INCONSISTENT CARRIER UTILIZATION POLICIES 
CAN BE INEQUITABLE AND COSTLY 
Because CABG surgery is so costly, it is essential that new 
economies and efficiencies become institutionalized as quickly
as possible. 
As the economies are implemented, HCFA and its 
carr iers must monitor claims to assure that providers do not 
diminish the impact of the savings by billing and being paid 
services. 
for unnecessary or inappropriate items and 
The Health Care Financing Administration has not mandated any 
surgery. 
national utilization controls for CABG  Each carrier,
in consort wi 
th its own medical consultants and medical policy 
comri ttee, must develop its screens. While some carr iers have 
diligently formulated controls, others have chosen not to 
place any limitations on the CABG providers in their service 
area. 
The need for carr 
ier screens for CABG surgery would be 
virtually eliminated if payments were packaged rather than 
paid according to the reasonable charge concept. 
CABG Surgica1 Fees Are Sometimes Fragmented

Several claims submi tted to Blue Shield of California for 1986 
CABG surgeries were identified by the plan s medical director
for review. 
The surgeons who had submi tted the claims had 
included separate charges for items that the medical director 
believed should have been included in the global fee for the
surgery.  items: 
The claims included charges for the following 
lines 
moni tor ing 
decompression catheters

intraaortic balloons

pacemaker electrodes

drainage tubes

resuscitation measures

Addi tional charges were also being submi tted for re-operations 
due to post-operative thrombosis or hemorrhage. 
The BSC medical policy committee determined that these items 
paid. 
are part of the surgeon s global fee and should not be 
Computerized pre-payment screens have been installed to 
automatically screen and deny these services when they are 
billed wi th any of the HCPCS CABG surgery codes. By doing 
this, BSC has closed a "loophole " and avoided paying these 
items. 
fragmented" bypass surgery 
Generally, carriers do not agree on fweheic.h  components of CABG 
surgery are included in the global  Also, their payment 
policies on re-operations are inconsistent. Only 6 of the 
carriers that responded to the inspection query indicated that 
all of the listed items are included in the surg ical fee and 
wi II not be paid if they are billed separately.  While almost 50 percent of the carriers will pay separate

charges for use of an intraaortic balloon (a procedure used if
the heart does not easily resume function when the heart-lung

machine . is disconnected), only 10 percent recogni ze separate
charges for the insertion of catheters. Even wi thin the same 
State, carrier policies may differ. For example, BSC now

disallows all of the listed items, but Transamerica-Occidenta1

in Los Angeles will pay separately for the balloon and

pacemaker electrodes. In Missour i, one carrier pays for the

balloon only while the other pays for the balloon and

resusci tation.

Only two of the carriers routinely deny separate charges for

re-
operatifoenes .b ecause they consider them part of the global 
surg ical  Some carr iers require that all claims for
re- consultants. 
operations be reviewed by their medical  Others 
pay the claim at a reduced rate, or pay the claim at a reduced 
rate if the re-operation was wi thin 24, 48 or 72 hours of the 
surgery. 
The fragmentation of CABG surgery was not apparent in the 
inspection. 
claims sample for the  However, the problem was 
identified by the northern California Medicare carrier in 
1986. 
claims that were submitted during  Since the inspection
sample claims were for fiscal years 1984 and 1985, it is

possible that fragmentation will become a costly problem 

HCFA does not establish national policy guidelines and

utilization screens.

Payments for Assistant Surgeons at CABG Surgery

Coronary bypass surgery is a complex procedure that requires a

ical team. 
large surg  The ski II of the surgeon -in -charge must
be complemented by the skills of the anesthesiologist, the 
nurses, the assistant surgeon and the pump perfusionist to 
assure a successful outcome. 
The OIG found that the CABG surgical team was composed of a 
centers: 
dozen or more persons in some medical  the primary
surgeon, two assistant surgeons, two pump perfusionists, an 
anesthesio10g ist, a nurse anesthetist, two circulating nurses, 
two scrubr enusrisdees,n ta.n  orderly and, in teaching hospi tals, a 
surg ical  In other institutions, the team had eight
members: the 
primary surgeon, one assistant surgeon, a 
physician assistant, one pump perfusionist, an 
anesthesiolog ist, one circulating nurse, one scrub nurse and 
an orderly. In most si tuations, the non-physician team 
members and the residents are salaried hospi tal employees and 
iers. 
do not submi t claims for reimbursement to Medicare carr 
Separate Part B bills are usually submi tted by the surgeon 
the anesthesiolog ist and the assistant surgeons.  If two assistant surgeons participate in the operation, one

usually harvests (removes) the saphenous vein while the other 
assists the primary surgeon in the chest cavity. The assistant 
who harvests the vein works on the leg from "skin to skin. 
Some of the surgeons who were interviewed do not routinely use 
function. 
a second surgeon to perform this  They have, instead, 
hired and trained physician assistants. In one major CABG 
center that was visited, two physician assistants are used
instead of any assistant surgeons. No Medicare charge is 
generated for the physician assistants who are the salaried

employees of the thoracic surgeon or surgery group.

All of the surgeons who were interviewed agree that the vein 
harvesting can be done just as efficiently and competently by 
a physician assistant or a trained nurse as by another 
surgeon. 
The surgeons also agree that only one assistant 
surgeon is required for all but the most complex CABG
surgeries. 
Although some surgeons think that Medicare should 
pay for physician assistants, most do not object to Medicare 
limiting payment to one assistant surgeon. 
Medicare payment policy precludes payment for assistant 
surgeons at CABG surgery when the hospital has a residency 
surgery. 
program in cardiovascular or thoracic  The OIG found 
policy. 
that at least seven carriers have not implemented this 
However, more than 50 percent of the carr iers that were 
surveyed will routinely pay for only one assistant surgeon. 
Except for three carriers, all the rest limi t the payment to
two assistant surgeons. 
The three exceptions have formulated
an alternative policy: 
The total amount that they pay for all 
assistant surgeons cannot exceed 20 percent of the primary 
surgeon  s reasonable charge. Twenty to 25 percent of the 
primary surgeon s fee is the usual amount that is billed and 
surgeon. 
paid for one assistant  Carriers that have adopted 
this policy have effectively reduced, or capped, program
expendi tures wi thout addressing the issue of how many 
assistants are needed in the operating room.  RECOMMENDATIONS 
RECOMMENDATION #1 - QUALITY OF CARE 
FINDING  Hospitals and surgical teams that specialize in CABG 
surgery and perform more than 200 surgeries per year have 
better outcomes in terms of mortality rates, lengths of stay 
and charges. Contracting wi th selected high volume faci Ii ties 
iciar ies 
would assure that Medicare benef  receive the highest 
settings. 
qua1i ty of care in the most efficient and economical 
RECOMMENDATION  HCFA should develop quality of care criteria 
for CABG surgery providers so that selective contracts can be
negotiated. 
IMPACT  Medicare beneficiaries would receive the highest
quali ty care in the most eff  settings. 
icient and economical 
HCFA RESPONSE  HCFA, in collaboration wi th eight PROs, 

collecting clinical data on CABG cases and will explore the

possibility of developing quality of care criteria specific to

CABG providers.

RECOMMENDATION #2 - SELECTIVE CONTRACTING 
FINDING  Medicare payments for CABG surgery are based on 
hospital DRG rates and reasonable charge determinations for
surgical and medical expenses. 
This method of reimbursement 
does not take advantage of the substantial program and 
administrative savings that can be realized through selective

contracting. 
RECOMMENDATION  HCFA should negotiate all-inclusive package 
payment prices with selected surgeons and medical centers for 
Since 
providing CABG surgery to Medicare beneficiaries. 
legislation is required, a demonstration project should be 
effective 
considered to determine the most efficient and cost-
n concept 
preferred provider 
method for contracting. The "
could be one way of encouraging beneficiaries to use the

contract provider without restricting the beneficiary

freedom to use the provider of his choice.

IMPACT  Over $192 million could be saved if Medicare 
implemented a selective contracting program that paid a fixed

pr ice of $13, 800 for CABG surgeries involving hospital stays
of up to 12 days. 
The Texas Heart Institute proposed this 
price; however, some HMOs have negotiated lower prices with

other medical centers and the estimated cost savings would be

" to take advantage of 
considerably greater if HCFA were able
these lower prices. Package prices also eliminate the need

for pre-payment and post-payment utilization screens and the

administrative costs associated with them. 
HCFA RESPONSE:  A demonstration project wi II be considered.  . , 
RECOMMENDATION #3 - MEDICAL NECESSITY 
FINDING  There is considerable controversy surrounding the 
medical necessity of coronary bypass surgery for certain
patients. 
RECOMMENDATION  PROs should be required to review the medical 
surgeries. 
necessity and appropriateness of elective CABG 
IMPACT  Unnecessary surgeries could be avoided and patient
and program savings could be reali zed. 
HCFA RESPONSE  CABG will be included on the list of mandatory

review procedures for PROs.

RECOMMENDATION #4 - PRIMARY SURGEON PAYMENTS 
FINDING  Medicare reasonable charge allowances for the 
primary surgeon are often inconsistent and inequi table. The 
marketplace. 
allowances do not consider the economies of the 
At least one insurer has been able to "wrap " the physicians 
payments so that separate fees are not paid to assistant 
surgeons and anesthesiologists. 
RECOMMENDATION  Limitations should be placed on reasonable 
I s 
charges for the primary surgeon  fee for CABG surgery. The 
limitations should be determined by applying the guidelines of
the Omibus Budget Reconciliation Act of 1986. Consideration 
should be given to negotiating .wrap " prices for Part B
services. 
IMPACT  At least $5 million would be saved if payments for
the pr imary surgeon in CABG surgery were limited to the 
current payment for three grafts. Considerably more may be
saved if the limi  iter ia 
tation is determined by applying the cr 
in the lamnibus Budget Reconciliation Act of 1986. Addi tional 
savings would be reali zed if the payments for all Part B
physicians ' services during CABG surgery were consolidated into 
one payment and separate payments for assistant surgeons and 
anesthesiologists were eliminated. Based on the experience of 
ope carrier in a pilot project, $1,100 per case would be
saved.  3 million 
For Medicare, this would amount to $69. 
annually. 
HCFA RESPONSE:  HCFA tentatively supports limi ting allowances 
and wi II conduct additional data evaluation before making a 
final determination.
 RECOMMENDATION #5 - HCPCS CODES 
FINDING  HCPCS added three codes to describe CABG surgery.
The additional codes have had an inflationary effect because 
most carriers have presumed that the addi tional codes, which 
distinguish among four, five and six arteries, add value to
the surgery. 
The existence of multiple codes may encourage 
abuse by rewarding additional grafts that may not be necessary. 
RECOMMENDATION  HCPCS codes for CABG surgery should be 
consolidated so that no distinction is made based on the 
surgery. 
number of grafts that take place during the 
IMPACT  Although no specific savings projections have been 
calculated for this recommendation, savings would be 
considerable since the recommendation would eliminate codes 
that are considered to warrant addi 
tional payments. 
HCFA RESPONSE:  HCFA concurs wi th this recommendation. 
RECOMMENDATION #6 - UTILIZATION CONTROL SCREENS

FINDING  This inspection found wide variations in carrier 
policies regarding utilization control screens for CABG 
surgery. 
HCFA has not mandated any national screens so each 
own. 
carrier must develop its  There is no uniformity 
concerning payment for assistant surgeons, fragmentation of 
the global fee and post-surgical complications. 
RECOMMENDATION  National utilization guidelines should be
established to eliminate inconsistent carrier policies. 
Consideration should be given to limiting the number of 
assistant surgeons that Medicare will pay for in CABG surgery 
or paying only one payment of 20 or 25 percent for assistant 
surgeons regardless of the number that participate in the
surgery. Utilization 
screens should be mandated to prevent 
surgical 
payments for fragmented services and post-
complications wi thin a specified time. 
IMPACT  Estimated annual savings of at least $4 million would 
result if uniform guidelines were implemented concerning 
surgeons. Additional 
payments for assistant  savings could be 
realized if uniform utilization screens were mandated 
concerning fragmentation and post- complications. 
surg ical 
HCFA RESPONSE  HCFA will conduct further investigation into

these areas.  ...
Comments were solici ted and received from the Society of 
Thoracic Surgeons. The Society agreed that the preferred 
provider option should improve quality of care and control
costs. 
The Society also agreed with our recommendations 
concerning adjusting reasonable charges ffeoer .C ABG surgeons and 
preventing fragmentation of the global  According to the 
letter from the Society, "Regional variations may have been 
required to launch the Medicare program, but there is no 
longer justification for such regional variations 
uncoupling of fees is professionally inappropriate. 
The Society did not agree wi th our recommendation regarding 
PRO review because  ... many of the larger units would have 
their own control mechanisms in place and these would 
undoubtedly be superior to an external PRO. 
Estimated Savings

Recommenda t i on  Annual  Savings
Million 
Selective Contracting  $192. a 
Pay Single Professional Fee  69.  Million 
Million 
Limi t Surgeon s Fee to Three Grafts 
Million 
Pay Only One Assistant Surgeon 
4. a  APPENDIX A 
DATA BASE AND METHODOLOGY

Data Base

Data from the Medicare carr 
iers and intermediaries was 
compiled into a file, which ultimately reflected

identification data and Part A and Part B utilization data 
relative to the hospital stay, for each of the 204 
sample.  in all
beneficiaries in the  This data base was used 
micro-computer analyses. 
The data base is incomplete in 47 cases with respect to the

Part B claims data. Of these, 32 were bypass cases where

the surgery took place in FY 1984, and the carriers were 
ic iary 
unable to reconstruct benef  claim histories that far 
the past. In another two cases in FY 1984 and FY 1985, the 
beneficiaries were not entitled to Medicare Part B benefits at

ethxe istitmse.  of the surgery; therefore, no Part B information
In the remaining 13 cases, 3 of which occurred in 
FY 1984, carriers could not provide any Part B information; it

is possible that one carrier processed the CABG claims after 
carrier. 
the Part B deductible had been met through another 
If this happened, claims data from the carrier that processed

the CABG claims would not appear on the Health Insurance

Printout 
(HIPO). 
Benef iciar ies  the  sample break ou t  follows: 
FY 1984  FY 1985  Total 
DRG 106 
DRG 107  122 
Subtotal 
107  204 
Missing Part B

Remainder 
157 
enditures 
Medicare Ex 
By projecting the sampled mean reimbursement under Part A for 
CABG, the OIG estimates that total Part A expenditures for these 
procedures were between $1. 007 billion and $1. 128 billion in 
interval). 
1985 (at the 95 percent confidence  According to 
figures published by HCFA in July 1986, the total Part A 
reimbursement for CABG was $1. 013 billion. Since the total 
published by HCFA falls wi thin the OIG 95 percent confidence 
interval, it is reasonable to apply the same methodology to
estimate the Part B total.  Methodo1ogy for Savings Projections

Comparison of Medicare costs to contract prices under

selecti ve contracting 
It is estimated that $192 million could be saved through
se1ecti ve contracting with a 
95 percent confidence 
interval between $188 million and $197 million. To arrive 
at this estimate, the Part A reimbursement and the total 
Part B allowed charges were added for each sample 
stay. 
benef iciary that had a 6 to 12-day hospital  The THI 
contract price of $13, 800 was compared to the Medicare 
figure and the savings projection was based on an inverse 
of the sampling fraction to the universe of Medicare CABG 
benef iciar ies 
This projection is conservative because:

As much as 25 percent of the FY 1985 Part A data may

have been missing from the universe. The sample was

selected from the Bill History file as updated

31, 1985. In prior studies
through December 
conducted by the OIG, the average lag in Part A bi 
processing (the length of time from the date of

service to final acceptance by HCFA) was determined

to be approximately 15 weeks. 
Although the FY 1985 
data is incomplete, more complete FY 1984 Part A data

could not be used because some carriers could not

information. 
locate the 1984 Part B 
There are no New York City hospital discharges in the
sample. 
This is primarily due to an extraordinary 
lag in Part A processing of bills from intermediary
00 30B. 
(OIG has determined that the average lag
Part A bi 
II processing for this intermediary is over 
31 weeks.  This intermediary typically_ accounts for
about 5 percent of total Part A hospital bi llings, 
or about 700, 000 discharges annually. 
There are other methods of projecting the potential

sample. 
savings from this type of  However, for this 
inspection, the most conservative approach, simply

multiplying the projection by the inverse of the

sampling factor (0.  500), was selected. 
2 percent, or 
Calculation of savings that would accrue from limiting
the pr imary surqeon ' s reasonable charge 
The projected savings for this recommendation is $5 
mi llion per year, plus or minus $675, 000 for a 95 percent 
confidence interval. The projection is limited to FY 1985 
data .because the figures must be annuali zed (the sample 
represents the activity for 2 years), and the FY 1984 
Part B data is incomplete.  Only 34 cases were included in this projection. The

remaining 63 cases were excluded because of incomplete

Part B data or because the procedure code was for fewer

than 4 grafts. 
The savings estimated for this recommendation are

conservative for similar reasons to those given for the

projected savings for selective contracting.

surgeons 
Calculation of projected savings if assistant 

payments were capped

The number of cases in the sample that fit the criteria 
4 million 
are small and the projected annual savings of $4. 
tentative. 
for the recommendation are  Only 10 cases from 
the sample were used to calculate the savings because they 
were the only cases that had separate payments for more 
than I assistant surgeon in the 1985 portion of the

sample.   Reprinted frm the JAMA  Journal of the American Medical Association  APPENDIX B
Februery  13, 1987,Volume 257 
Copyright  1987 American Medical Asociation 
Original Contributions

Association of Volume With Outcome of

Coronary Artery Bypass Graft Surgery

Scheduled vs Nonscheduled Operations 
Errata: In Table I , column 2 (Tota 
Jonathan A, Showstack, MPH; Kenneth E. Rosenfeld; Deborah W. Garniek, SeD;  Group), the  s are positive for the thee 
hospital surgical volume groups and 
Harold S. Luft, PhD: Ralph W. Schaffarziek, MD; Jinnet Fowles, PhD  fOT 
the constat (not negative as prited). 
Empirical evidence suggests that mortality rates for coronary artery bypass graft  creased risk of mortality for patients 
(CABG) surgery are lower in hospitals that perform a higher volume of the  undergoing CABG  10 
Clinical risk fac
procedure. In recent years, the criteria for CABG surgery have been expanded to  tors found to be associated with poor 
include patients with a wide variety of co-morbidities. To address the question of  surgical outcome include the presence 
whether the volume-outcome relationship continues to exist for this new group of  and severity of angina 10 and the pres
patients, discharge abstracts for 18986 CABG operations at 77 hospitals in  etensc e7  ohfy hpeearrttn fsaiiolunr e7  a1n0d a lpthreovuioguhs d aiacbuete 
California in 1983 were analyzed using multiple-regression techniques. Higher-
myocardial infarction 7  10 have not been 
volume hospitals had lower in-hospital mortaliy (adjusted for case mix); this 
found to be significantly associated with 
effect was greatest in patients who might be characterized as having "non in-hospital death.  10 Prority of sur
scheduled" CABG surgery. Higher-volume hospitals also had shorter average 
gery (emergency or urgent rather than 
postoperative lengths of stay and fewer patients with extremely long stays. The  electiveY.9 and additional surgical pro
results of this study suggest that the greatest improvement in average outcomes  cedures (eg, valve replacement)' are

for CABG surgery would result from the closure of low-volume surgery units.  associated with higher mortality, while

the number of coronary artery grafts 
(lAMA 1987;257:785789) 
inserted appears to be unrelated to out
come. 
EMPIRICAL evidence suggests that  1975). If higher volume is associated  surIgne rrye caepnpt eyaer atros h, acvrei tbeeriean  feoxr pCanAdBeGd  
for many surgical procedurs, mortality  with lower mortality and, potentially, to allow more severely il patients to 
rates are lower in hospitals performing 
lower costs because of shorter lengths of  undergo surgery. Previously reported 
a higher volume of a given procedure.  stay, then directing patients to higher- empiric evidence of the association be
This association between volume of sur- volume hospitals may lead to both bet tween the volume of CABG surgery and 
gery at a hospital and outcome has  ter clinical outcomes and lower per-case  outcome, however, was generally drawn 
received increasing attention both be- costs. Recognizing the need for open from the experience of patients who had 
cause it is measurable and because it  heart surgery teams to perform a mini- surgery in the 1970s, and these studies 
may be amenable to policy intervention.  mum number of operations, the Ameri- accounted for relatively few patient
Luft et all reported substantially higher  can College of Surgeons has recom characteristics. Previous studies also 
procedure-specific death rates in hospi- mended that each team perform at least were limited to self-selected hospitals or 
tals performng fewer than 200 coronar  150 operations per year.  samples of Medicare patients and, thus 
artery bypass graft (CABG) operations  A varety of patient and hospital char- may not be generalizable. 
annually compared with hospitals that  acteristics (other than the volume of  This study extends previous empiric

performed 200 or more procedures  surgery at the operative hospital) may  work by addressing two key questions: 
(5. 7% mortality vs 3.4% for 1974 to  be associated with the outcome of sur First, has the volume-outcome rela
gery. For CABG surgery, a significant  tionship for CABG surgery continued to 
association between volume and out- exist in recent years, particularly when 
come remains when patient characteris data are drawn from hospitals and pa
From the Institutfeo r Health Policy Studies, School of 
Medicine, University of California at San Francisco  tics such as age, single or multiple diag tients in a broad geographic area? Sec
(Mssrs Showstack and Rosenfeld and Drs Garnick and  noses, and sex are accounted for, as well ond, is the relationship between volume 
Luft); Blue Shield of California, San Francisco (Dr  as when hospital-specific characteris- and outcome similar for all types of 
Schatfarzick); and Health Services Research Center 
Park-Nicollet Medical Foundation, St Louis Park, Minn  tics (eg, hospital size, teaching status patients, or does it var according to
(Dr Fowles).  and geographic location) are consid- clinical and other patient characteris
UnRiveeprrsinitty r eoqf uCeasltisfo torn Iinas atittu Stea nfo rF Hraenacltihs cPoo,l i1cy3 2S6tu Tdhieirsd   ered. Advancing age and female sex are  tics, such as the emergency natur of 
Ave , San Francisco, CA 94143 (Mr Showstack).  almost uniformly associated with in- the procedure?

JAMA, Feb 13, 1987-VoI257 , No.  Coronary Artery Bypass-Showstack et al  785  :j":  " "
MATERIALS AND METHODS  Table 1,  Asociation of Paient Characteristics and Hospital Surgical Volume With In-Hospital Death Rate 
Data Sources  for Coronary Artery Bypass Graft Surgery, California. 1983 
The source of data for this analysis 
was individual patient discharge ab
Total Group  Scheuled" .  Nonscheduledt 
stracts for 1983 obtained from the Cali
forna Health Facilties Commission  PaStieenxt ( cmhaalrea-cteristics  0207:!0,0032:  - 0,0207:! 0,0037:j  - 0.0182:! 0.0056 
(CHFC). Each discharge abstract con
Age, y 
tained a variety of demographic  ..50  - 0.0378:! 0.0046:j  - 0.0267:! 0.0049:j  - 0.0504:! 0.00901 
clinical, and hospitalization data that  50-6  0227:!0,0031:j  - 0,011 O:! 0,0034  - 0,0365:! 0.0056:j 
characteried a specifc hospitalzation.  ;,75  0301 :! 0,0055*  0292:! 0,007:j  0265:! 0.002:j 
The patient's principal and secondar  Ethnic group (white-1)  0120:!0.  0Ioo:!0.004311  -0.QI29:!0.0076 
diagnoses, and the principal and secon Presence 01 
dar procedures performed on the pa Acute myordial infarction (yes- 0602:! 0,0039:j  0611 :!0,0051:j  0536:! 0.002:j 
tient durng the hospital stay, were clas- Congeslive heart failure (yes- 0964:!0,0071:j  0891 :!0,0097:j  0937:! 0,011 O:j 
Inteional Angina (yes- 0123:!0,0030:j  - 0.0079:! 0,003211  0161 :!0.005 
sCilfaiesds aicfcaortdiinogn  too fth eD iseases, Ninth Rev Cardiac caheterization (yes- 0066:!0,0026  005:! 0,0035  - 0.0407:! 0.0057:j 
sion, Clinical Modifation (lCD- Coronary angioplas1y (yes- 0252:! 0,0069:j  0119:!0,0075  0429:!0.0133 
U All discharges with a primar or Oter discarge (yes- 0495:!0.0052:j  - 0.0346 :!0,0055:j  - 0,0768:! 0,01 04:j 
CM). 
ICD- procedure code of  Hospital surgical volume 
secondar  CM  20-100 (ye- -t 0.0207:! 0,006  0076:! 0.0062  0304:!0,0117 
3fo6.r  htheroaurg rhe 3v6a. c19u (l"abryitpiaosns  a) nwaesrteo mseopsais  101-200 (yes- -I 0,0077:! 0,0039  0052:! 0,0045  0077:! 0,0070 
rated into a data file that included 20 093  201-350 (yes- t 0,0096:! 0.0030  0073:! 0.003211  0125:! 0.005911 
caes.  Constant  r- 0,0686:! 0,0053:j  0515:! 0.0056:j  1094:!0.0104:j 
AdjUs1ed R2  042  033 
Frequency distributions were com
16966  11497  7489 
puted for each vaable in the data set. 
Several factors that were thought to be  Surgery on first or secnd day after admission. 
importnt to the subsequent data analy tSurgery on day 01 admission or three or more days after admission.

001,

sis were noted in these frequency distri P":,OI,

butions. Of the patients who had CABG  IIP":.05.

hear 
surgery, 1077 also had a  valve 
replacement during the same hospi
talization. Because of the likely differ prepared for a scheduled operation than  ported below are from analyses that 
ent outcome of these patients, we de for a nonscheduled operation.  used day of surgery as the criterion for 
cided to exclude them fI;om subsequent  The CHFC data did not list whether  defiing scheduled or nonscheduled sur-
analyses. In addition, 15 hospitals that  an operation wa scheduled, and we  gery. (Other analyses that used a vari
reportd only one CABG operation dur were unable to go directly to a patient'  ety of other characteriations of the 
ing 1983, one hospital that reportd only  medical record to determine the reason  nature of the admission, including
for the 
five operations, and two hospitals that  operative admission. There  whether the admission was emergency, 
had not yet reportd their data to the  were, however, data available that  urgent, or elective, produced results 
CHFC at the time of this analysis were  allowed inference about the emergency  entirely consistent with the results of 
excluded. This left a total of 18996
 nature of the CABG procedure. For  the analyses reportd below that used 
patients with CABG surgery (and no  example, the number of days after the  day of surgery as the criterion. 
valve replacement) from 77 hospitals.  admission that the operation took place 
Data Analysis 
was recorded. It might be hypothesized 
that "scheduled" operations ar likely  The methods used to analyze the data 
Scheduled vs  take place on the fist or second day  consisted of computing frequency dis
Nonscheduled Operations  after admission  with emergency  tributions, simple bivariate correlation 
Previous studies of the relation be CABG operations taking place on the  analyses to determne the relationships 
tween volume of CABG surgery and in- day of admission. Patients who have a  between individual independent vaa-
hospital outcome did not distinguish  CABG operation on the third or subse- bles, and regression equations to assess 
between outcomes for different types of quent day after admission also seem  the independent associations of patient 
patients. Because of recent studies  likely to be those who are at high risk  and hospital characteristics with the 
showing that new categories of patients  because they were likely admitted for  primary outcomes of interest: surval 
may now be receiving CABG surgery,  another condition and/or deteriorated  at the time of discharge and post-
we hypothesized that the volume-out to the point of needing a CABG opera- operative length of stay. Two units of 
come relationship might be different for  tion. Also recorded was the "reason for  analysis, patients and hospitals, are 
higher-risk patients, such as patients  admission " which was coded according  possible with this data set. Data re-
admitted for an acute myocadial infarc to whether the admission was "emer- portd below are from analyses in which 
tion. 12 There could be a varety of rea gency,  urgent " or "elective." While  the patient was the unit of analysis; 
sons for a different volume-outcome ef the reason for admission might seem to  when the hospital was defined as the 
fect for "scheduled" compared with  be a good characterization of the con- unit of analysis, results were similar to 
nonscheduled" operations. For exam cept that we were tryng to assess, it is  results of analyses of patient-level data. 
ple, a patient who receives a non potentially biased: a medical record  With the patient as the unit of ana1ysis 
scheduled CABG operation may be  coder might be more likely to record  the final regression equations consisted 
sicker and more acutely il than one who  emergency" or "urgent" on the dis- of 18986 cases (ten cases were omitted 
receives a scheduled operation. Also, a  charge abstract if there was a poor  because individual data items were 
hospital's open hear surgery team is  outcome. Because the day of surgery is  missing). 
much more likely to be on hand and  an objective measure, the results re- Two primar 
 dependnt variables
786  JAMA, Feb 13, 1987-VoI257 , NO.  Coronary Artery Bypass-Showstack et al  Table 2.  Distribution of Patients and Hospitals  Table 3.  Characteristics of Patient Population 
According to Hospital Volume of Coronary Artery 
Bypass Graft Surgery, California, 1983  Total  Scheduled  Nonscheduled

Group  Operations t  Operations:!

No. 01  % 01  % 01  Sex, % M  77,  BOA  72, 
Operations  Hospitals  Patients 
Mean age, y  61.2  60A  62.

20-100  Ethnicity, % W  86,  86.  87.

101-200 
% With diagnosis 
201-350  Acute myocardial infarction
 14,  21. 
350  Congestive heart failure 
Angina  27.  29,  24. 
% With procedure (during operative hospitalization) 
were analyzed: (1) discharge status (in Cardiac caheterization  42A  22,  72A 
hospital death vs other type of dis Angioplasty 
charge), and (2) "poor outcome" (the  No, of patients  18986  11505  7491 
total of in-hospital death and long post On all characteristics, except the percentage of patients who received angioplasty, scheduled patients were 
operative length of stay (for survivors  significantly diferent from nonscheduled patien(tPs-
c.001).

only, postoperative length of stay be tSurgery on first or second day after admission.

:!Surgery on day of admission or three or more days after admission.

yond the 90th percentile for all patients 
undergoing CABG surgery in the 
state)). In-hospital mortality is a lim regression equations that included all of  Table 4.  Adjusted' In-Hospital Deaths and Poor 
ited, although easily measured, indica the independent variables. An adjusted  Outcomes According to Hospital Volume of Coro
tor of poor quality. While objective mea mean is an estimate based on the hypo nary Artery Bypass Graft Surgery, California. 1983 
sures of complications would be  thetical situation that all (hospital vol
desirable, discharge abstracts did not  ume) groups had the same  Mean % 
values on 
innodsiceas twe ewreh eptrheesre snpte coinf iac dlmisitsesdi odnia ogr  ewaecrhe  oefn ttehree din idnetpoe tnhdee rnetg vreasrsiaiobnle esq tuhaat  No, of  GTortaolup Scheduledt  scheNdounl-ed:! 
Operations  (N=18986) (N=11497)  (N=7489) 
developed after the procedure. There
 tion. (A complete . description of the  In-Hospital Deaths
fore, postoperative length of stay was  process of adjustment was provided by  20-100  9 2.

used as a proxy for complications that  Cohen and Cohen.  The. regression  101-200 
developed subsequent to the operation.  equations for discharge status are  201-350  1 2.911  911 
It can be argued that, after adjusting  shown in Table 1.) Analyses of the vol 350 
for case mix , any hospital with a high  ume-outcome relationship that did not  Poor Outcomesf 
rate of patients staying longer than 15
 include any covariates, ie, that were  20-100  21.  16.  27. 
days after the day of operation (the 90th  analyses of variance with the volume  101-200  15.  11,  20. 
percentile postoperative length of stay)  groups as the only independent varia 201-350  11,8  16. 
has an unusually high rate of complica bles, produced results similar to, al 350  12.  16, 
tions.  though slightly less sensitive statis
inT hte he inadnepaelndynst evsar iawbelerse  the voilnucmlued eodf   tfiuclla lrleyg trheasnsi,o tnh ee qreusautlitosn psr othdautc iendc liund tehde   aancugAtiend jaum,s ycteoadcr adforiadr cisa ecl xain,t fhaaegrcteet,i roeizntha,nt iicoco ngn,rgo eusaptni,d va enc doh repoarrnetas erfyna cieal nuorfe  
CABG surgery at the operating hospi gioplasty. 
the entire set of covariates.

tal, sex, age group, ethnic group (white  The use of secondary data to address  t:SjSuurrggeerryy  oonn  fdirasyt  oorf  asedcmoinsdsi odnay o ra fttherre aed omr imssoiroen d.ays 
vs other), presence of primary or secon clinical questions presents certain po after admission, 
dary diagnostic codes of current acute  tential problems, such as possible mis P-C 01 vs highest-lIlume group. 
myocardial infarction, congestive heart  coding of subjective data. In this study,  IIPP-co o05r  ovust choimghee"s tis- vtholeu mseu mgr oofu pth. e in-hospital death 
failure, and/or angina, and presence of  data were derived from hospital dis rate and the percentage of patients discharged alive

who had a postoperative length of stay beyond the 90th 
primary or secondar  ICD- CM  pro charge abstracts, which are coded after  percentile (15 days).

cedure codes of coronar catheteria the fact by nonclinicians who are usually  #P-c,001  vs highest-volume group.

tion, and/or coronar angioplasty. The  trained in abstracting medical records.

volume of surgery at the hospital was  The primary questions of interest ad
coded to include all CABG surgery,  dressed in this study, however, depend  tients' clinical records. 
whether a valve replacement was per on the accurate coding of data elements  Reported below are analyses of the 
formed or not (although  patients  who  that are relatively objective, such as day  total group of patients, and subgroups 
had a concurrent valve replacement  of surgery, length of stay, and discharge  divided according to the day after ad
were  excludd  from the analysis). For  status. The addition of more subjective  mission that their operation took place

purposes of interpretation, and because  data elements to the analyses, such as  (one or two days ("scheduled") vs any 
of a potential nonlinear relationship be presence of angina, made the results  other day ("nonscheduled")). The cen
tween age and the dependent variables somewhat more sensitive statistically  tral questions addressed by this analy
age was entered into the regression  but did not alter the inferences that one  sis are whether the volume of CABG 
equations as three dichotomous vara might have drawn from unadjusted re surgery at a hospital is associated with 
bles plus one reference group: age less  sults, Also, there is litte reason to
 in-hospital death and postoperative 
than 50 years, age 50 to 64 years, and  believe that any of the data elements
 length of stay and how this relationship 
age over 74 years, with age 65 to 74  studied was recorded systematically in  differs for scheduled surgery compared 
years as the reference group. A varable  one way at higher-volume hospitals and  with nonscheduled surgery. 
was 
also included to characterize  in another way at lower-volume hospi

whether a patient was discharged to  tals. Therefore, it seems reasonable to  RESULTS 
another facility, thus not having the  assume that the results of this study  The 22% of hospitals with over 350 
chance" to die in that hospitalization.  would be confirmed if detailed primary  operations in 1983 accounted for 44% of 
Adjusted means were calculated from  data were collected directly from pa- all CABG surgery, while the 16% of 
JAMA , Feb 13 , 1987-VoI257 , NO.  Coronary Artery Bypass-Showstack et al  787  Table S,  Estimated Lives Savd if Patients at 
Nonscheduled  Lower-Volume Hospitals Had Outcomes Similar to 
Those of Patients at Higher-Volume Hospitals 
Total 
Scheduled  Estlmated Llves Saved. 
Comparison  Non-
Group  Scheduledt  scheduled:j Total 
Volume,, 1 00  1.7  11.6 
1 6, 
Volume 101-200 
Total (volume 
,,200)  13.  17. 
01 
Compared with hospitals with a volume of more than 
200 operations per year,

tSurgery on first or second day after admission,
:jSurgery on day of admission or three or more days 
after admission, 
urgent" admission compared with a 
much lower volume-outcome associa
tion for patients with an "elective" ad
mission. 
20-1 00  101.200  201-350  ::350  tieTnots a wsseesres  tdoetaflie "dp oaosr  hoauvticnogm ea  "p opoar  
outcome if they either died in the hospi
Hospital Surgical Volume,  tal or stayed beyond 15 days (the 90th 
No. of Operations  percentile postoperative length of stay). 
A strong volume-outcome association 
was apparent, with the likelihood of 
Adjusted death rate according to hospital surgical volume.  values shown are for difference  poor outcome in the highest-volume 
between lower-volume group and highest-volume group, NS indicates not significant 
hospitals approximately two thirds of 
hospitals with 100 or fewer operations  preparation for the procedure, and are  that in the lowest-volume hospitals (Ta
accounted for only 4% of all CABG  less likely to have other current serious  ble 4). The magnitude of the volume-
surgery (Table 2). Almost half (44%) of  medical conditions. All of the character outcome effect is by far largest in the 
the hospitals studied had fewer than 200  istics listed in Table 3, except ethnic  nonscheduled group, with 28% of non
operations, accounting for one fith of all  group, were found in subsequent analy scheduled patients in the lowest-volume 
surgeries.  ses to be signficantly associated with
 group having a poor outcome.
Table 3 shows the characteristics of  the outcomes of interest.  To understand better the implications 
the total group of patients studied and of  The association of volume of surgery  of these data, several estimates were 
patients whose operations were sched with in-hospital death rates, adjusted  hypothetical 
derived based on the 

uled or nonscheduled. Most of the oper for patient characteristics, is shown in  situation that patients in the lowest-

ations were performed on men, al Table 4 and the Figure. For the entire  volume hospitals could be treated with 
though there was a relatively high  group of patients there was a fairly the same effcacy and efficiency as pa
number of women in the nonscheduled  strong association of volume with ad tients in higher-volume hospitals. Of the 
group. Almost 90% of patients were  justed death rate. For patients who 18986 patients studied who received 
white. Approximately one of seven pa receivedCABG surgery in hospitals  CABG surgery in California in 1983, 789 
tients had a current acute myocardial  performing 20 to 100 operations per  (approximately 4%) were operated on in 
infarction, one of 25 patients had con year, the adjusted death rate was 0.052  hospitals providing  100 or fewer  op
gestive hear failure, one of four pa fallng to 0.039, 0.041, and 0.031 for  erations. Their adjusted death rate was 
tients had angina, slightly fewer than patients who had surgery in hospitals  053 compared with an adjusted death 
half of all patients had a coronar with volumes of 10l to 200 operations  rate of 0. 035 in hospitals with volumes 
catheterization during the operative  20l to 350 operations, and 351 or more  above 200 CABG operations a year. 
hospitalization, and approximately one  operations , respectively. When patients  Hypothetically, if the death rate for the 
of 25 patients had a coronar angio were divided according to whether they  . 789 patients was similar to the case 
plasty performed durng the study hos received scheduled or nonscheduled op mix-adjusted death rate for patients 
pitalization (Table 3).  erations (as defined by their day of  who received their surgery in hospitals 
Patients undergoing nonscheduled
 operation), there was a trend toward an  with volumes above 200 CABG opera
surgery were much more likely to have  association of volume with outcome in  tions a year, 12 lives might be saved (28% 
had a current acute myocardial infarc the group that was admitted for sched of deaths in the low-volume hospitals), 
tion (22% vs 9%;  P-o. OOl)  and/or con uled surgery, with a much stronger  85% of which would be in the non
gestive heart failure (6% vs 2%;  P-o. 001)  association of volume with outcome oc scheduled group (Table 5). If the group 
and/or a cardiac catheterization durng  currng for patients who were admitted  of patients from the lower-volume hospi
the study hospitalization (72% vs 23%;  for nonscheduled surgery (Table 4).  tals is broadened to include patients 
P-o. Thus, these data suggest that  Similar effects were seen when this 
OOl).  who had surgery in hospitals with  200 or

tnhoen scchhaerdauclteedr iisz actaipotnu ronfg  sac rheeadul leeffde cvts; 
 gefofericzt awtiaosn ms oodfe slecdh uesdiunlge odt hvesr  cnaoten fetwoetr al poapteieranttsi)o,n tsh e( atpoptraol xniumamtbeleyr  o2f0l%v eosf  
patients with scheduled operations are
 scheduled operations. For example, a  saved might increase to 18 (about 11% of 
much more likely to have had their  substantial association of volume with  deaths in hospitals with 200 or fewer 
cardiac catheteriation prior to the op adjusted in-hospital death rate was  operations), with 74% in the non
erative admission, implying earlier  found for patients with an "emergency/  scheduled group. Thus, over half of the 
788  JAMA, Feb 13, 1987-VoI257 , NO.  Coronary Artery Bypass-Showstack et al  , pp 
potential lives saved would be in non an essential assumption. On the other  40 miles of a high-volume hospital im
scheduled operations in the lowest-vol hand, the comparison group for this  plies that, at least in California, fuher 
ume hospitals.  hypothetica analysis is the 80% of pa regionalization of CABG surgery may 
tients in hospitals with volumes greater  be possible without major access prob
COMMENT 
than 200 operations. If the comparson  lems. Outcomes have to be linked 
The results of this study suggest that  group had been, for example, patients  closely to the clinical conditions of pa
the association of volume of CABG sur who received surgery in hospitals with  tients and the medical appropriateness 
gery with in-hospital survival found by yearly volumes of greater than 350
 of referral prior to admission or trans
other 
investigators occurs for both  CABG operations, the savings might be  ferrng a severely il patient in need of 
scheduled and nonscheduled proce even larger, although a focus of concern  surgery to another (higher-volume) 
dures, while the lifesaving potential of  would then shift increasingly to issues  hospital. Because a perforated coronary 
regionalization may be concentrated in  such as access. These hypothetical pro artery during coronar 
angioplasty ne
patients who are sicker and need sur jections should be viewed with some  cessitates immediate CABG surgery, 
gery on an emergency basis. These
 caution, but they may be regarded as  the results of this study also suggest 
results imply that the greater skills of  rough approximations of the savings in  that coronary angioplasty should be

surgical teams at higher-volume hospi lives that might occur if CABG surgery  performed only in facilities with a read
tals may be particularly necessar to  were provided to patients only in  ily available, experienced, high-volume 
care for patients undergoing non
 higher-volume hospitals.  CABG surgery team. 
scheduled CABG surgery. In particular  The elimination of nonscheduled sur The question of which specific hospi
recent evidence suggests that members  gery at lower-volume hospitals would  tals should perform CABG surgery can
of the team in addition to the primary  result in even lower volumes, and possi not be answered directly by this study. 
surgeon , in particular the anesthe bly poorer outcomes for the remaining  Despite the overall results that show a 
siologist, may be equally important in  scheduled patients. A more attractive positive effect for volume, it is always 
determining outcome. ,. Empirc sup strategy might be to shift all CABG  possible that a paricular lower-volume

port is also provided for the recommen surgery to medium- and higher-volume  hospital may have good outcomes, while 
dation by the American College of Sur facilties. This shift could be accom an individual high-volume hospital may 
geons that at least 150 open heart  plished in a variety of ways, such as by  have poor outcomes.!S In the aggregate 
procedures be performed by a surgical  making hospital and/or specialty ac however, the data suggest strongly that 
team each year.  The volume of surgery  creditation dependent on the volume of  average outcomes would be improved if 
at a hospital was also found to be  surgery performed, or by selective con patients who require CABG surgery,
positively associated with outcomes  tracting by health insurers. Given the
 particularly nonscheduled surgery, 
other than surival; 
average post poor outcomes at lower-volume hospi have this procedure in higher-volume

operative length of stay and the per
 tals reported in this and other studies  hospitals. 
centage of patients who had long stays  the likeliood of increased numbers of 
wwheor er escieginvfeidc asnutrglye rlyo iwn ehrig fhoerr -pvaotliuemntes   pmitaallpsr macigtihcet a slsuoit sh aavte l othwee er-fvfeoclut mofe f hoorcs FBol'TuuTenh dsS a hstiitoeulndd. yo fw Ca asluoprnpao rEtd bucya tai coonn atrnadc tR wesiteha rthceh  
hospitals.  ing the closure of lower-volume surgery  study involved efforts by a number of 
The hypothetical savings that might  units.  persons who were instruPeuntsa  in its inception and 
result from performing all operations at  The implications of this study for re conduct, includig Thm  and Paul Gottlober 
frm the Ofce of Analysis and Inspections, Ofce 
higher-volume hospitals are based on 
gionalization and other policies related  of the Inspetor Genera, US Deparment of

several assumptions that might no  to selective use of certain hospitals will
 Health and Human Services, San Fracisco; Amos
prove to be true if patients were actually  depend, to some extent, on future stud Cary frm Blue Shield of Californa, San Fran
diverted to higher-volume hospitals. In  ies of the reasons for the differential  cPihsDco, ;f rJoomhn  SBtuanoerrd, M (CD,a aln Ud nBiyvreorsni tWy;. a Bnrdo Swtne 
particular, most of the lifesaving poten outcomes of CABG surgery and on the  phen J. McPhee, MD, Benson B, Roe, MD, Car 
tial is seen in patients having non location of hospitals in a particular geo Fox, Jan Tetreault, Debora Peltzman, and Eliz
scheduled surgery. Thus, the avail graphic area. The fact that, in this  abeth Ms ari frm the University of Calornia 
San Francisco, Without the help and insights of 
ahboilstpy iotfa la  performneairnby g CABhiGgh seur-rvgoelruym ies   wstiutdhy p, omoor sotu otcf othmee lso wwe-vroe lluomcaet ehdo swpiitthailns   these and other persons, this project would not 
have been possible, 
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