Human Capital Depreciation and Efficiency in Surgical Care (Text Version)

Slide Presentation from the AHRQ 2011 Annual Conference


On September 21, 2011, Jason Hockenberry made this presentation at the 2011 Annual Conference. Select to access the PowerPoint® presentation (150 KB). Plugin Software Help.


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Human Capital Depreciation and Efficiency in Surgical Care

Jason Hockenberry, PhD*, and Lorens Helmchen, PhD

* The authors have benefitted from collaboration and conversations with Peter Cram, MD, MBA, and Saket Girotra, MD.

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Acknowledgements

This research was supported by grant number 1 R03 HS019743-01 (Principal Investigator [PI]: Hockenberry) from the Agency for Healthcare Research and Quality. The content is solely the responsibility of the presenter and does not necessarily represent the official views of the Agency for Healthcare Research and Quality.

The data used in this presentation are from the Pennsylvania Health Care Cost Containment Council (PHC4). This analysis was not prepared by PHC4. It was performed by the authors listed above. PHC4, its agents and staff bear no responsibility or liability for the results of the analysis, which are solely the opinion of the authors.

The authors have no conflicts of interest to declare.

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Background

Organizational forgetting and human capital effects have received more attention from health economists recently.

  • Gaynor, Seider and Vogt (2005).
  • Gowrisankaran, Ho and Town (2006).
  • Huckman and Pisano (2006).
  • Hockenberry, Lien and Chou (2008).
  • Sfekas (2009).
  • David and Brachet (2009).

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The Theory

Human Capital is accumulated through experience and education, interacts with endowments and is aggregated within organizations:

  • Human Capital accumulation leads to increases in productivity.
  • Breaks in production can lead to the depreciation of this capital (so-called forgetting) and reductions in productivity.

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Model of Surgical Outcomes

Image: Two line graphs compare labor hours versus units produced under the Traditional Learning Curve and P(mortality) versus number of surgeries performed under the "Learning" Curve in Surgery.

What do surgeons produce? Surgeries, or something else?

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Model of Surgical Outcomes

Consider the following:

  1. Outcome= f(X,MDQuality,e).

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Model of surgical outcomes

Consider the following:

  1. Outcome= f(X,MDQuality,e).
  2. Mortalityijht = b0 + b1 Xiht + b2 Phys. Qualityjt + eijht.

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Model of Surgical Outcomes

Consider the following:

  1. Outcome= f(X,MDQuality,e).
  2. Mortalityijht = b0 + b1 Xiht + b2 Phys. Qualityjt + eijht.
  3. Phys. Qualityjt = a0 + a1Physician Voljt-1 + a2 t-(t-1) + ρj + uijht.

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Model of Surgical Outcomes

Consider the following:

  1. Outcome= f(X,MDQuality,e).
  2. Mortalityijht = b0 + b1 Xiht + b2 Phys. Qualityjt + eijht.
  3. Phys. Qualityjt = a0 + a1Physician Voljt-1 + a2 t-(t-1) + ρj + uijht.

t-(t-1) = Temporal distance between procedures.
ρj = Physician fixed effect which captures the endowment.

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Model of Surgical Outcomes

Consider the following:

  1. Outcome= f(X,MDQuality,e).
  2. Mortalityijht = b0 + b1 Xiht + b2 Phys. Qualityjt + eijht.
  3. Phys. Qualityjt = a0 + a1Physician Voljt-1+ a2 t-(t-1) + ρj + uijht.

So by substitution we get:

  1. Mortalityijht = d0 + d1 Xiht + d2MDVoljt-1+ d3 t-(t-1)+ ρj + vijht.

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Model of Surgical Outcomes

Consider the following

  1. Outcome= f(X,MDQuality,e).
  2. Mortalityijht = b0 + b1 Xiht + b2 Phys. Qualityjt + eijht.
  3. Phys. Qualityjt = a0 + a1Physician Voljt-1+ a2 t-(t-1)+ ρj + uijht.

By substitution we get:

  1. Mortalityijht = d0 + d1 Xiht + d2MDVoljt-1+ d3 t-(t-1)+ ρj + vijht.

And there are, of course, always arguments about whether we have the salient parts of this included in these models.

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Procedure of Interest

Examining a procedure used to treat Coronary Artery Disease (CAD)

  • Percutaneous Coronary Interventions (PCI):
    • Actual procedure usually involves a single physician.
    • Often performed in emergent situations with little time for planning.

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Data

  • Source: Pennsylvania Health Care Cost Containment Council (PHC4).
  • All inpatient admission claims within PA for the years 2006Q3-2010Q2.
  • These data were augmented with variables calculating time (in number of days) between procedures where the physician was listed as the operator.

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General Estimation Strategy

mijkt = β0 + β1Djt + β2Vjkt + β3Sjt + β4Hkt + β5Xit + νijkt

  • m = mortality (≤1 day, in-hospital).
  • D = measure of temporal distance of last surgery of surgeon j.
  • V = vector containing volume of both surgeon j and hospital k.
  • S = physician j's characteristics.
  • H = hospital k's characteristics.
  • X = patient i's characteristics.

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Temporal Distance Measures

  • A continuous covariate for temporal distance is not very informative.
  • We define temporal distance indicators:
    • 0-2 days (ref).
    • 3-7 days.
    • 8-14 days.
    • 15+ days.
  • We examine both the days since any OR and the days since the specific procedure.

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Select Provider Characteristics

Temporal Distance0-2 days3-7 days8+ daysOverall
N=113,98024,1825,919144,081
Physician annual volume159.5 (93.4)121.7 (74.3)88.7 (62.5)150.4 (91.4)
  [p<0.000][p<0.000]  
Physician years of experience22.8 (7.6)23.3 (7.9)23.8 (7.8)22.9 (7.7)
  [p<0.000][p<0.000]  
Hospital annual volume863.4 (562.8)893.4 (683.2)889.2 (679.4)869.5 (589.7)
  [p<0.000][p=0.013]  

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Select provider characteristics

Temporal distancePeri-procedural MortalityIn-hospital Mortality
0-23-78 +0-23-78 +
Full sample
mean (%)0.310.540.541.001.111.20
p-value 0.0000.002 0.0740.077
Procedures performed by high volume physicians1 only
mean (%)0.320.560.631.011.111.35
p-value 0.0000.003 0.1220.038

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Outcomes of PCI patients

Outcome:Perioperative Mortality In-Hospital Mortality 
3-7 days since last inpatient procedure0.00308***(0.0004)0.00283***(0.0007)
8 + days since last inpatient procedure0.00275***(0.0008)0.00328**(0.0014)
Increase of 25 PCIs in surgeon 12 month volume-0.0000741(0.0003)-0.000256(0.0005)
Increase of 25 PCIs in hospital 12 month volume0.0000223(0.0001)0.0000397(0.0001)
N144081 144081 

Standard errors clustered at the physician level in parentheses
* p < 0.10, ** p < 0.05, *** p < 0.01.

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Outcomes of PCI Patients Treated by High Volume Physicians

Outcome:Perioperative MortalityIn-Hospital Mortality
3-7 days since last inpatient procedure0.00318***(0.0006)0.00300***(0.0009)
8 + days since last inpatient procedure0.00521***(0.0013)0.00605***(0.0023)
Increase of 25 PCIs in surgeon 12 month volume-0.0000521(0.0003)-0.000274(0.0006)
Increase of 25 PCIs in hospital 12 month volume0.00000293(0.0001)0.0000259(0.0001)
N95634 95634 

Standard errors clustered at the physician level in parentheses
* p < 0.10, ** p < 0.05, *** p < 0.01.

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Does Surgeon Human Capital Depreciate?

  • Survival after surgery appears to be negatively associated with temporal distance to an extent.
  • The question is the 'root' of this effect.
    • Cognitive processes?
    • Manual dexterity?
    • Team coordination/mindfulness?

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Resource Use

  • We are also thinking about what temporal distance does to resource use.
  • Increased temporal distance could increase resource use because of labor-capital tradeoffs.
  • On the other hand it could reduce resource because more anomalies go unnoticed and therefore untreated, reducing resource use.

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Resource use

 Total chargesTotal charges
net of bed charges
Mean of reference group66,38164,089
3-7 days-4148***-3888***
(0.0000)(0.0000)
8 + days-2910***-2615***
(0.0002)(0.0006)
phys. PCI volume in previous 4 quarters6154
(0.6857)(0.7000)
hosp. PCI volume in previous 4 quarters-156***-125***
(0.0001)(0.0002)
N144081144081

P-values derived from standard errors clustered at the physician level in parentheses
* p < 0.10, ** p < 0.05, *** p < 0.01.

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Simulation-Back of the Envelope

About 94 lives would have been preserved over 4 years in PA if all PCI patients were treated by those with higher levels of human capital (i.e., those operating w/ a 0-2 day temporal distance).

Extending these lives would have led to $117.5 M in total charges in treating PCI patients (about a 1.22% increase), or a cost of life extended of about $1.24M.

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Limitations and Extensions

  • We have access to dates but not time of day of procedures.
  • We do not know the reason for these breaks from the OR.
  • Further work is needed to ascertain the nature of this effect.
Page last reviewed March 2012
Internet Citation: Human Capital Depreciation and Efficiency in Surgical Care (Text Version): Slide Presentation from the AHRQ 2011 Annual Conference. March 2012. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/news/events/conference/2011/hockenberry/index.html