Hidden costs of surgical complications: a retrospective cohort study.

Objectives: To quantify how surgical complications impact hospital revenue when their effect on the volume of admissions is considered.

Design: Retrospective analysis of comprehensive administrative data.

Setting: Three university hospitals in France.

Participants: 54 637 inpatient stays between 2017 and 2023 in 4 surgical departments (abdominal, orthopedics, thoracic, and urology).

Main outcome measures: Stays were categorized by their diagnosis-related group and occurrence of one or more complications, according to International Classification of Diseases, 10th revision diagnosis codes. First, data were aggregated monthly to determine the impact of variation in the monthly mean length of stay (LOS) on the monthly volume of admissions, using an instrumental variable strategy. Second, LOS and revenue per patient were compared for patients with and without complications. Finally, an estimation of the impact of complications on total revenue was performed.

Results: A total of 54 637 stays were analyzed, with 9735 (17.8%) experiencing at least one complication. The mean LOS was 8.7 days and the mean revenue per patient was €7602. The instrumental variable analysis, designed to account for unobserved confounders, showed that a decrease of 10% in the monthly mean LOS increased the monthly volume of admissions by 9% (95% CI (5.1% to 13.0%), p<0.01). Complications increased the LOS by 10.9 days (95% CI: (8.95 to 13.1), p<0.01) and revenue per patient by €7912 (95% CI: (6420 to 9087), p<0.01), but decreased daily revenue per patient by €211 (95% CI: (-384 to -83.0), p<0.01). Over the study period, the estimated potential loss induced by complications ranged from 6.6% (95% CI (6.3% to 7.0%), p<0.01) to 9.1% (95% CI (8.8% to 9.4%), p<0.01) of actual revenue. Departments with higher complication rates incurred larger potential losses.

Conclusions: Surgical complications reduce total revenue by crowding out short stays that generate more daily revenue. This challenges the consensus that complications are a boon for hospital revenue, instead implying that they shrink hospital net margins (ie, revenue minus costs).