How Managed Care May Choose Hospitals for Contracts for Laparoscopic Cholecystectomy, Weiland D. health care payers evaluate charge data for each of the regional hospitals before contracting with them for medical services. Since laparoscopic cholecystectomy is demanded by most patients, knowledge based on laparoscopic charges and conversion rates give the hospital or health care provider information to use in evaluating surgical costs. Lower costs give health care providers more flexibility in negotiating lower charges. Obviously, the lower the charge, all else being equal, the more likely the contract. CONCLUSIONS The charges of laparoscopic cholecystectomy are variable among institutions. These differences occur both regional- ly and locally. Health care providers, including HMOs, are looking for the most cost-effective provider and institutions which wish to compete must evaluate their procedures to inform health care providers that they are cost-efficient. Matched-pair analysis, decision-tree and sensitivity analy- ses, similar to those described above, facilitate appraisal by each institution as to what can be done to improve care, reduce charges and become cost-efficient in performing laparoscopic cholecystectomy. Laparoscopic cholecystec- tomy clearly offers several benefits over open cholecys- tectomy. Since there is reduced LOSand short-term dis- ability, hospital charges should not be in excess of that for open cholecystectomy. Only evaluation and modifi- cation of the charges which contribute to the excess will lead to validated cost efficiencies and subsequent recruitment by providers for hospital service. References: 1. Anonymous. National Institutes of Health consensus devel- opment conference statement on gallstones and laparoscopic cholecystectomy. AmerJ Surg. 1993;l65:390-398. 2. Zuker, KA. Surgical laparoscopy. St Louis: Quality Medical Publishing, Inc., 1991:115-200. 3. Weiland DE, Malone JM, Garren R, Bay RC. Is academic managed care an oxymoron? AmerJ Surg. 1995;170:651-655. 4. Steiner CA, Bass EB, Talmina, MA, et al. Surgical rates and operative mortality for open and laparoscopic cholecystectomy in Maryland. N Eng J Med. 1994;300(6):403-408. 5. Vanek VW, Bourgeut CC. The cost of laparoscopic versus open cholecystectomy in a community hospital. Surg Endo. 1995;9:3l4-323. 288 JSLS(1997)1:285-288