Impact of cost valuation on cost-effectiveness in adult spine deformity surgery.


Background context

Over the past decade, the number of adult spinal deformity (ASD) surgeries has more than doubled in the United States. The complex surgeries needed to manage ASD are associated with significant resource utilization and high cost, making them a primary target for increased scrutiny. Accordingly, it is important to not only demonstrate value in ASD surgery as clinical effectiveness but also to translate outcome assessment to cost-effectiveness.


To compare the difference between Medicare allowable rates and the actual, direct hospital costs for ASD surgeries.

Study design

Longitudinal cohort.

Patient sample

Consecutive patients enrolled in an ASD database from a single institution.

Outcome measures

Short Form (SF)-6D.


Consecutive patients enrolled in an ASD database from a single institution from 2008 to 2013 were identified. Direct hospital costs were collected from hospital administrative records for the entire inpatient episode of surgical care. Medicare allowable rates were calculated for the same inpatient stays using the year-appropriate Center for Medicare-Medicaid Services Inpatient Pricer Payment System Tool. The SF-6D, a utility index derived from the SF-36v1, was used to determine quality-adjusted life years (QALY). Costs and QALYs were discounted at 3.5% annually.


Of 580 surgical ASD patients eligible for 2-year follow up, 346 (60%) had complete baseline and 2-year data, and 60 were Medicare beneficiaries comprising the cohort for the present study. Mean SF-6D gained is 0.10 during year 1 after surgery and 0.02 at year 2, resulting in a cumulative SF-6D gain of 0.12 over 2 years. Mean Medicare allowable rate over the 2 years is $82,050 (range $42,383 to $220,749) and mean direct cost is $99,114 (range $28,447 to $217,717). Mean cost per QALY over 2 years is $683,750 using Medicare allowable rates and $825,950 using direct costs. This difference of $17,181 between the 2 cost calculation represents a 17% difference, which was statistically significant (p<.001).


There is a significant difference in direct hospital costs versus Medicare allowable rates in ASD surgery and in turn, there is a similar difference in the cost per QALY calculation. Utilizing Medicare allowable rates not only underestimates (17%) the cost of ASD surgery, but it also creates inaccurate and unrealistic expectations for researchers and policymakers.





Published Version (Please cite this version)


Publication Info

Gum, Jeffrey L, Richard Hostin, Chessie Robinson, Michael P Kelly, Leah Yacat Carreon, David W Polly, R Shay Bess, Douglas C Burton, et al. (2017). Impact of cost valuation on cost-effectiveness in adult spine deformity surgery. The spine journal : official journal of the North American Spine Society, 17(1). pp. 96–101. 10.1016/j.spinee.2016.08.020 Retrieved from

This is constructed from limited available data and may be imprecise. To cite this article, please review & use the official citation provided by the journal.



Christopher Ignatius Shaffrey

Professor of Orthopaedic Surgery

I have more than 25 years of experience treating patients of all ages with spinal disorders. I have had an interest in the management of spinal disorders since starting my medical education. I performed residencies in both orthopaedic surgery and neurosurgery to gain a comprehensive understanding of the entire range of spinal disorders. My goal has been to find innovative ways to manage the range of spinal conditions, straightforward to complex. I have a focus on managing patients with complex spinal disorders. My patient evaluation and management philosophy is to provide engaged, compassionate care that focuses on providing the simplest and least aggressive treatment option for a particular condition. In many cases, non-operative treatment options exist to improve a patient’s symptoms. I have been actively engaged in clinical research to find the best ways to manage spinal disorders in order to achieve better results with fewer complications.

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