Contribution margins and utilization of transcatheter aortic valve replacement versus surgical aortic valve replacement in the Medicare population

Abstract

Background

Hospitals and health systems must balance the demand for transcatheter aortic valve replacement (TAVR) against financial sustainability. Patients may be eligible for both TAVR and surgical aortic valve replacement (SAVR), but financial realities for hospitals may affect differential access to those therapies. We sought to understand the landscape of costs and reimbursement for TAVR and SAVR in the US and to understand the association of procedural reimbursement with receipt of either.

Methods

We included fee-for-service Medicare beneficiaries undergoing isolated TAVR or SAVR in 2016-2019. For each TAVR and SAVR, inpatient revenues and direct costs were calculated at the claim level. The contribution margin (CM) for each TAVR or SAVR was then calculated as total revenues minus total direct costs, which defines the net profit for the procedure for the hospital. Multivariate logistic regressions were used to identify hospital characteristics associated with positive TAVR CMs. Multivariate linear regression was used to assess the relationship between relative volume of TAVR cases and relative differences in TAVR versus SAVR CMs at the hospital level.

Results

Of 542 sites, 377 (69.6%) had positive CMs, and 165 (30.4%) had negative CMs for TAVR; 505 (93.2%) had positive CMs for SAVR. Median revenues, costs, and CMs for TAVR decreased between 2016 and 2019. The median (IQR) total CM per hospital for TAVR decreased from $10,574 ($1,331-$22,259) in 2016 to $6,744 ($6,099-$17,511) in 2019 (P < 0.001). Teaching hospital status (aOR 1.77, 95% CI 1.07-2.93) and for-profit status (aOR 3.7, 95% CI 1.8-7.6) were associated with increased odds of positive TAVR CMs relative to nonteaching hospital status and nonprofit status, respectively, in multivariate logistic regression models. The median (IQR) proportion of TAVR of total AVR was 76.67% (69.6%-82.5%) compared with 74.6% (66.9%-80.4%) at hospitals with negative TAVR CMs (P = .04). There was no significant linear relationship between hospital-level difference in median TAVR and SAVR CMs and hospital-level proportion of TAVR of total AVR in multivariate models.

Conclusions

Most hospitals had positive CMs for TAVR and nearly all had positive CMs for SAVR. Positive CMs for TAVR for individual hospitals were associated with a significant increase in the utilization of TAVR. However, the magnitude of difference in TAVR versus SAVR CM was not associated with differential procedural use.