"Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has."

Original article
peer-reviewed

## Utilization and Cost of Inpatient Dermatologic Procedures: A Cross-sectional Analysis

### Abstract

Knowledge surrounding inpatient dermatologic procedure costs is limited; therefore to learn more, we performed a cross-sectional analysis of dermatologic procedures contained in a publicly available Washington State Comprehensive Hospital Abstract Reporting System database from 2014. Dermatologic procedure utilization and cost were evaluated based on several parameters including demographics, length of hospital stay, payments, and payers. SAS 9.4 was used for the analysis. A total of 14,768 patients underwent dermatologic procedures in 2014 and 81.0% were white. The average age was 53 years (SD = 0.17), and the average payment for all patients who underwent dermatologic procedures was $85,059.48 (SD =$1,284.34). The average hospital length of stay was 8.91 days (SD = 0.07). The most common admission type was elective (66.2%), the most common admit source was a non-healthcare facility point of origin (78.2%), the most common primary payer was Medicare (36.2%), and the most common procedure was incision and drainage of skin and subcutaneous tissue (26.5%), followed by closure of skin and subcutaneous tissue of other sites (20%). This analysis demonstrated that inpatient dermatologic procedures are a significant driver of inpatient health care costs, and it is critical to determine factors that increase inpatient costs related to dermatologic procedures in order to develop strategies for reducing healthcare costs.

### Introduction

Health care spending accounted for 17.9% of the nation’s gross domestic product (GDP) in 2017, or $3.5 trillion [1]. The contribution of inpatient dermatologic procedures to this total is poorly understood. For example, the cost of dermatologic procedures among Medicare beneficiaries was$2.21 billion in 2017, with a portion arising from inpatient care [2]. We examined discharge records from community hospital visits to better understand the utilization and cost of non-disease-specific inpatient dermatologic procedures.

### Materials & Methods

We performed a cross-sectional analysis of the Washington State Comprehensive Hospital Abstract Reporting System (CHARS) database to analyze the utilization and cost of inpatient dermatologic procedures performed in 2014 [3]. This database contains record-level data pertaining to inpatient and observation community hospital visits and abstracted information on discharges for civilian hospitals in the state. CHARS database collection methods have been described elsewhere [4]. This study was IRB exempt due to the de-identified and publicly available data.

All patients were adults (>18 years of age) hospitalized in Washington in 2014 who underwent a variety of dermatologic procedure. Descriptive analyses were performed on patient demographics, length of hospital stay, admission type, payment amount, and primary payer. All statistical analyses were performed using SAS 9.4 (Cary, NC).

### Results

A total of 14,768 patients underwent dermatologic procedures in 2014. Descriptive characteristics of the sample are provided in Table 1. The majority of admissions were elective (66.2%). The most common primary payer was Medicare (36.2%) followed by Medicaid (28.5%). The mean total hospitalization payment for patients undergoing dermatologic procedures was $85,059.48, and the average length of hospital stay was 8.9 days. The most common procedure was incision and drainage of skin and subcutaneous (SC) tissue (26.5%).  Sample Size, N 14,768 Age (years), mean (SD) 52.6 (0.17) Payment (USD), mean (SD)$85,059.48 ($1,284.34) Length of stay (days), mean (SD) 8.9 (0.07) Sex, N (%) Female 6,560 (44.4) Male 8,201 (55.6) Race, N (%) Hispanic 812 (5.5) White 11,965 (81.0) Black 718 (4.9) Other 1,273 (8.6) Admit type, N (%) Elective 9,781 (66.2) Emergency 2,071 (14.0) Urgent 2,290 (15.5) Other 626 (4.2) Admit source, N (%) Non-healthcare facility point of origin 11,547 (78.2) Clinic 1,346 (9.1) Transfer from a hospital (different facility) 1,468 (9.9) Other 407 (2.8) Primary payer, N (%) Medicare 5,349 (36.2) Medicaid 4,205 (28.5) Health maintenance organization (HMO) 704 (4.8) Commercial Insurance 2,575 (17.4) Health Service Contractors 819 (5.6) Other 1,116 (7.6) Procedure, N (%) Skin & SC tissue aspiration 327 (2.2) Injection or tattooing of skin lesion or defect 16 (0.1) Incision & drainage of skin & SC tissue 3,891 (26.5) Incision & removal of foreign body from skin and SC tissue 957 (6.5) Incision of skin & SC tissue 199 (1.4) Skin and SC tissue closed biopsy 539 (3.7) Skin & SC tissue diagnostic procedures 2 (0.01) Excisional debridement 1,918 (13.7) Removal of nail anatomy 112 (0.8) Skin chemosurgery 7 (0.1) Dermal appendage ligation 35 (0.2) Nail anatomy debridement 212 (1.4) Non-excisional debridement 2,265 (15.4) Skin & SC tissue closure 2,934 (20) Characteristics of patients undergoing each of the identified procedures are provided in Table 2. Medicaid was the most common payer when incision and drainage of skin and SC tissue was performed. Skin chemosurgery had the highest average admission cost ($548,535.70) and excisional debridement had the highest aggregate cost (\$5,333,677.80).

 Skin & SC tissue aspiration Injection or tattooing of skin lesion or defect Incision & drainage of skin & SC tissue, other Incision & removal of foreign body from skin and SC tissue Incision of skin & SC tissue, other Skin and SC tissue closed biopsy Skin & SC tissue diagnostic procedures, other Excisional debridement Removal of nail anatomy Skin chemosurgery Dermal appendage ligation Nail anatomy debridement Non-excisional debridement Skin & SC tissue closure, other sites Total number of patients undergoing procedure 327 16 3,891 957 199 539 2 1,918 112 7 35 212 2265 2934 Age Mean 52.6 30.1 46.8 51.8 51.5 53.9 54 56.4 57.5 6.9 0.9 67.1 54.8 54.8 Std error 0.16 0.14 0.16 0.16 0.18 0.17 0.07 0.14 0.15 0.09 0.05 0.12 0.16 0.20 Length Stayed (Days) Mean 8.9 6.8 5.7 11.8 10.1 14. 5 10.8 9.9 47.4 5.7 16.9 11.5 7.2 Std error 0.10 0.10 0.07 0.21 0.12 0.18 0.01 0.12 0.09 0.49 0.12 0.15 0.15 0.09 Payment (USD) Mean 73,634.1 42,483.6 49,238.9 122,616.768 118,240.1 147,213.4 68,133.7 93,204 75,586.9 548,535.7 49,128.7 82,065.4 101,226.7 82,687.4 Min 3455 10855.9 1838 1699 7942.4 4176.3 68130.7 4248.3 7502.6 18255.9 1807.6 8343.3 2738.7 1,826.6 Max 1,158,397 172,812.3 2,248,144.1 4,586,665.2 982,935.6 362,0874.3 68,136.7 5,333,677.8 459,992.4 2,069,643.2 821,520.6 1,263,769.1 2,173,662.7 1,601,295.5 Std Err 50.1 106.5 12.4 69.6 97.3 112.1 0 35.4 71.2 2227.5 236.9 63.6 24.8 17.1 Sex Female 159 15 1718 548 85 258 0 819 41 3 15 73 926 1110 Male 168 1 2173 409 114 281 2 1099 71 4 20 139 1339 1824 Race Hispanic 13 2 199 50 10 36 0 6 0 5 10 108 175 8123 White 270 11 3177 743 151 411 1 1589 83 4 10 182 1866 2374 Black 20 1 202 57 11 21 0 74 14 0 8 11 126 126 Other 18 3 245 70 19 53 1 122 7 2 4 4 115 188 Admit Type Elective 237 8 3,100 522 108 314 2 1,200 80 5 0 101 1,423 2,116 Emergency 62 6 412 174 30 146 0 349 18 0 0 28 201 201 Urgent 24 1 361 251 59 7 0 348 13 1 1 83 150 150 Other 4 1 18 10 2 72 0 21 1 1 34 0 491 467 Primary Payer Medicare 123 1 1,036 394 68 202 0 839 51 0 0 132 872 1,114 Medicaid 90 9 1,701 185 61 130 1 482 30 5 19 32 561 648 Health Maintenance Organization (HMO) 22 0 175 45 11 18 0 91 5 0 1 22 119 114 Commercial Insurance 46 5 494 224 35 120 1 263 10 1 10 11 418 621 Health Service Contractors 19 0 185 69 11 45 0 114 8 0 2 10 115 105 Other 27 1 300 40 13 24 0 129 8 1 3 5 180 332

### Discussion

The majority (55.2%) of financial costs related to dermatologic care, including procedural costs, are experienced in the outpatient setting [5]. While inpatient costs contribute significantly to overall healthcare expenditures (20.1%), understanding of these costs is limited [1]. Moreover, data related to dermatologic costs in the inpatient setting primarily focus on disease-specific aggregate costs. For example, inpatient costs for care for psoriasis have been shown to be cost-prohibitive when compared to outpatient treatment (13,042 € versus 2,984 €), especially when accounting for biologic therapy use [6].

This current analysis is unique in that it identifies dermatologic procedures performed during an inpatient admission independent of dermatologic diagnosis and reveals potential factors that may be used to stratify patients undergoing a dermatologic procedure and suggest opportunities for cost reduction. This study is limited by its regional geographic encashment. Co-morbid diagnoses and direct cost of dermatologic procedures could not be analyzed, and aggregate cost reporting may have overestimated the relative cost contribution. Finally, provider specialty and level of training were not available.

Most patients received a dermatologic procedure during an elective admission and the primary payer was either Medicare or Medicaid. Additionally, our findings support dermatologic consultation when dermatologic procedures are considered. Diagnostic procedures recommended by an appropriately consulted dermatologist yield a definitive diagnosis in up to 80% of cases. Moreover, 45% to 80% of diagnoses will change after dermatology consultation preventing unnecessary therapy and costly hospital stays [7]. Finally, dermatology consultation may also facilitate outpatient follow-up for a procedure rather than performing it during admission.

### Conclusions

Inpatient dermatologic procedures are a significant driver of inpatient health care costs. It is critical to determine factors that increase inpatient costs related to dermatologic procedures to develop strategies for reducing healthcare costs. A good initial cohort for future study would be patients receiving a dermatologic procedure during an elective admission who have Medicare or Medicaid.

### References

1. National Health Expenditure Data: NHE Fact Sheet. (2018). Accessed: January 07, 2019: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/index....
2. Tan SY, Tsoucas D, Mostaghimi A: Association of dermatologist density with the volume and costs of dermatology procedures among Medicare beneficiaries. JAMA Dermatol. 2018, 154:73-76. 10.1001/jamadermatol.2017.4546
3. Comprehensive Hospital Abstract Reporting System (CHARS). (2014). Accessed: November 14, 2018: https://www.doh.wa.gov/DataandStatisticalReports/HealthcareinWashington/HospitalandPatientData/HospitalDischargeDataC....
4. Salvatierra GG, Gulek BG, Erdik B, Bennett D, Daratha KB: In-hospital sepsis mortality rates comparing tertiary and non-tertiary hospitals in Washington state. J Emerg Med. 2018, 54:785-792. 10.1016/j.jemermed.2018.01.027
5. Dehkharghani S, Bible J, Chen JG, Feldman SR, Fleischer AB Jr: The economic burden of skin disease in the United States. J Am Acad Dermatol. 2003, 48:592-599. 10.1067/mjd.2003.178
6. Steinke SI, Peitsch WK, Ludwig A, Goebeler M: Cost-of-illness in psoriasis: comparing inpatient and outpatient therapy. PLoS One. 2013, 8:78152. 10.1371/journal.pone.0078152
7. Biesbroeck LK, Shinohara MM: Inpatient consultative dermatology. Med Clin North Am. 2015, 99:1349-1364. 10.1016/j.mcna.2015.06.004
Original article
peer-reviewed

### Author Information

###### Ethics Statement and Conflict of Interest Disclosures

Human subjects: All authors have confirmed that this study did not involve human participants or tissue. Animal subjects: All authors have confirmed that this study did not involve animal subjects or tissue. Conflicts of interest: In compliance with the ICMJE uniform disclosure form, all authors declare the following: Payment/services info: All authors have declared that no financial support was received from any organization for the submitted work. Financial relationships: All authors have declared that they have no financial relationships at present or within the previous three years with any organizations that might have an interest in the submitted work. Other relationships: All authors have declared that there are no other relationships or activities that could appear to have influenced the submitted work.

Original article
peer-reviewed

-