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Improving the Delivery of Surgical Care Within Regional Hospital Networks

Ibrahim, Andrew M., MD, MSc; Sheetz, Kyle H., MD, MSc; Dimick, Justin B., MD, MPH

doi: 10.1097/SLA.0000000000003182

Department of Surgery and the Center for Healthcare Outcomes and Policy, University of Michigan, Ann Arbor, MI.

Reprints: Kyle H. Sheetz, MD, MSc, Department of Surgery, University of Michigan, 2800 Plymouth Avenue, Building 16 – G016 100N-11, Ann Arbor, MI 48109. E-mail:

The authors report no conflicts of interest.

Hospitals continue to merge into larger networks in response to widespread calls for reducing costs and improving quality. Since passage of the Affordable Care Act, which introduced value-based payments and emphasized population health management, the rate of hospital mergers has nearly doubled.1 Proponents for the mergers argue that larger hospital networks may be able to reorganize services lines to leverage the technical, infrastructure, and knowledge expertise now available to them. In doing so, they can improve care continuity and operate at higher efficiencies. Detractors of these mergers argue that they may make no significant changes to existing practice patterns and use the collective weight of the network to negotiate higher prices with payers. In this context, mergers decrease market competition and thereby reduce incentives to improve quality and costs. As debates continue about the benefits and drawbacks of ongoing hospital consolidation, there appear to be no signs that this trend will change course.

Recent efforts have been made to identify the “good merger”2 and understand how hospital networks can leverage their combined assets to improve care delivery. While the formation of a large network has potential to positively impact a broad spectrum of service lines, changes to surgical services lines may be among the most actionable. More so than nonprocedural fields, surgical care has established volume–outcome relationships, variation in well-defined outcomes, and significant expenses over a short episode of care. We believe each of these can be leveraged by networks to improve their delivery of surgical care.

We describe 3 strategies that hospital networks can adopt to improve care for surgical patients undergoing high-risk, moderate-risk, and low-risk procedures. We underscore the impact these quality improvement strategies may also have in reducing costs.

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One strategy to improve surgical outcomes within hospital networks is to centralize high-risk operations. A growing body of evidence consistently demonstrates that patient undergoing complex operations, such an esophagectomy or pancreaticoduodenectomy, experiences better outcomes when hospitals with a higher annual volume perform the procedure.3 Because networks may now have multiple hospitals performing the same complex operations, there are opportunities to regionalize within the network—maximizing benefits from known volume–outcome relationships.

Efforts to centralize high-risk procedures have been operationalized through the “Volume Pledge.”4 Hospitals are now voluntarily restricting 10 complex, high-risk operations to hospitals within their network that meet procedure-specific annual volume thresholds. This approach also has potential to reduce costs as these high-volume centers are equipped to quickly intervene on postoperative complications and limit their sequelae.

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Improving delivery of surgical care for moderate-risk procedures within networks can be realized through standardization of care pathways in the preoperative and postoperative periods. Patient undergoing moderate-risk operations, such as surgical intervention for breast cancer, may experience fragmented care as evaluation and treatment of their condition requires input from a broad spectrum of providers (primary care for initial screening, oncologist for pre- and postoperative chemotherapy or radiation, surgeon for resection, follow-up for surveillance, interval evaluation for breast reconstruction). When aligned within a network, the role of each provider can be consistently coordinated and, to the extent possible, standardized.

Use of a shared electronic medical record with standardized pathways and protocols can facilitate how networks deliver uniform, high-quality care for patients undergoing moderate-risk procedures. For example, Carolinas Medical Center Levine Cancer Institute recently implemented such a system after merging together 38 hospitals and clinics.5 The leadership utilized the expertise among its oncology providers to create formal care pathways for common oncologic diagnoses. These pathways—for preoperative evaluation, neoadjuvant therapy, postoperative surveillance—were integrated into the shared electronic medical record order sets so that any patient seen across the network experienced a uniform treatment plan based on the highest level of expertise available. In addition to helping ensure that each patient receives guideline concordant care, this approach also has potential to reduce costs by eliminating redundant or unnecessary testing.

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A third strategy is to decentralize low-risk procedures. Common operations, such as cholecystectomy or herniorrhaphy, can be performed safely in rural and low-volume settings.6 Because demand for these operations is high, networks can improve access by providing them across multiple sites. Moving these common operations away from the high-volume tertiary centers frees up resources for more complex operations to be centralized in those facilities.

Widespread decentralization of low-risk operations has been seen across the United States in the >1200 rural hospitals with critical access designation. Each critical access hospital has less than 25 beds and is not equipped with all the specialty resources found at a larger hospital (eg, intensive care unit, interventional radiology). As such, these hospitals can perform common procedures at lower costs6 because they do not need to cross-subsidize the overhead infrastructure of specialty services. Hospitals networks may realize important financial benefit by shifting these common operations to a lower costs facility.

Several important trends in healthcare make these network level strategies to improve surgical care particularly timely. First, patients, payers, and advocacy groups are increasingly pressuring hospitals to demonstrate how mergers and consolidations have translated into improved care delivery. Because many surgical procedures are costly and measured by robust outcomes detectable within 30 days of the intervention, changes to surgical services lines may provide the earliest evidence of network benefit. Second, as a result of the meaningful use requirements in the Affordable Care Act, nearly all hospital systems have dedicated significant resources to electronic medical records. As such, they are eager to see a return on this investment and how it could facilitate improved care. Finally, the rise of value-based payments has directly connected improving patient outcomes with the financial bottom line of the system. This creates additional opportunities to align the responsibilities of proceduralists and referring physicians to improve the short- and long-term care of the patient. Each network-level strategy provides actionable changes that are consistent with the incentives of value-based payment to improve quality and reduce costs.

While debates remain about the benefits and drawbacks of hospital mergers, they will continue. The time is ripe to move forward and focus on how redesigning service lines within regional hospital networks can translate accumulated assets into improved healthcare delivery (Table 1).



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1. Dafny L. Hospital industry consolidation—still more to come? N Engl J Med 2014; 370:198–199.
2. Dafny LS, Lee TH. The good merger. N Engl J Med 2015; 372:2077–2079.
3. Birkmeyer JD, Siewers AE, Finlayson EV, et al. Hospital volume and surgical mortality in the United States. N Engl J Med 2002; 346:1128–1137.
4. Urbach DR. Pledging to eliminate low-volume surgery. N Engl J Med 2015; 373:1388–1390.
5. Ibrahim AM, Dimick JB. Redesigning the delivery of specialty care within newly formed hospital networks. NEJM Catalyst. 2017. Accessed October 1, 2018.
6. Ibrahim AM, Hughes TG, Thumma JR, et al. Association of hospital critical access status with surgical outcomes and expenditures among Medicare beneficiaries. JAMA 2016; 315:2095–2103.

hospital consolidation; hospital networks; networks and surgical care

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