Rising hospital costs outpace reimbursement for common vascular procedures.

Abstract

Hospitals across the United States have experienced rapidly increasing operating costs since the COVID-19 pandemic, driven by inflation, labor shortages, and rising supply and device expenses. Because vascular surgery care frequently relies on specialized procedural resources and serves a predominantly Medicare population, reimbursement growth may not adequately offset rising hospital costs. This study evaluated trends in hospital costs, reimbursement, and procedural margins for commonly performed vascular procedures within a large tertiary health system. Institutional cost accounting data were retrospectively reviewed for five commonly performed vascular procedures performed between 2019 and 2022: arteriovenous fistula creation, arteriovenous graft placement, carotid endarterectomy, endovascular aortic repair, and lower extremity angiography with percutaneous intervention. Financial data were obtained from the STRATA Jazz financial analytics platform and included direct hospital costs, reimbursement, and contribution to indirect (CTI). Financial metrics were standardized per case and compared between the prepandemic baseline year (2019) and the combined postpandemic period (2020-2022). Secondary outcomes included procedural volume, length of stay, and payer mix. Direct hospital costs increased by approximately 31% to 32% between 2019 and 2022, whereas reimbursement increased by only 20% to 21%, resulting in substantial margin compression. Overall CTI decreased from $1470 per case in 2019 to $1177 during 2020-2022, representing a 20% decline. Outpatient procedures demonstrated a 23% increase in direct costs with a slight decline in reimbursement, resulting in a 25% reduction in CTI. Inpatient procedures demonstrated a 32% increase in direct costs and a 12% decline in CTI per case. Procedure-level analysis demonstrated marked margin deterioration across multiple interventions, including a 67% decline for lower extremity angiography with intervention, a 52% decline for carotid endarterectomy, and conversion of endovascular aortic repair margins from positive to negative by 2022. Procedural volumes, payer mix, and hospital length of stay remained stable throughout the study period. Direct hospital costs for commonly performed vascular procedures increased substantially from 2019 to 2022 and significantly outpaced reimbursement growth, resulting in progressive erosion of procedural margins across inpatient and outpatient vascular interventions. These findings suggest that structural increases in hospital operating costs, rather than changes in procedural utilization, are driving worsening financial performance. Greater alignment between reimbursement and the true costs of delivering complex vascular care will be necessary to ensure the long-term sustainability of vascular surgery programs.