Analysis of commercially negotiated hospital prices for spinal deformity surgery in the United States.

BACKGROUND CONTEXT: Spinal deformity surgery is among the most resource-intensive inpatient procedures in the United States. Despite increased transparency in commercial pricing, the structural drivers of cost variation for complex spine surgery remain unclear.

PURPOSE: To characterize hospital-, market-, and community-level factors associated with variation in commercially negotiated prices for thoracolumbar spinal deformity surgery.

STUDY DESIGN/

SETTING

Cross-sectional analysis.

PATIENT SAMPLE: A total of 6,253 commercially negotiated prices for surgical thoracolumbar spinal deformity treatment (MS-DRG 456-458) were analyzed from 2,449 US hospitals across five major commercial payers.

OUTCOME MEASURES (FUNCTIONAL MEASURES): The primary outcome measure was the log-transformed commercially negotiated price for thoracolumbar spinal deformity surgery.

METHODS

Hospital-level variables included bed size, teaching status, ownership, Case-Mix Index (CMI), and system affiliation. Market-level variables included wage index and concentration (Herfindahl-Hirschman Index). Community-level variables encompassed uninsured rate, Social Deprivation Index, racial composition, and population health metrics. Prices were log-transformed to address skewness. Multivariable linear regression utilized a hospital-payer-DRG contract-level dataset (n=6,253 contracts from 2,449 hospitals), reflecting 30.5% attrition from the initial 3,526 hospitals due to complete-case exclusion for missing covariates (eg, wage index and CMI).

RESULTS

The fully specified model, inclusive of state and insurer fixed effects (adjusted R²=0.244), revealed that system affiliation was the strongest predictor of higher prices, with affiliated hospitals charging 21.1% to 41.8% more (p<.001). Larger bed count (p=.008) and higher CMI (p=.015) were also associated with higher prices, whereas nonteaching hospitals (p=.042) had lower prices. Higher labor costs (p<.001) and lower market competition (7.5%-7.8% higher prices, p<.05) were each associated with higher prices. At the community level, higher uninsured rates (+13.4% per SD, p=.020) correlated with higher prices, whereas poorer health (-6.9% per SD, p=.045) and lower Social Deprivation Index (-4.1% per SD, p=.048) were linked to lower prices.

CONCLUSIONS

Hospital system size, labor costs, market concentration, and community context were associated with substantial variation in negotiated prices for surgical spinal deformity treatment.