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The financial effects of the coronavirus disease 2019 (COVID-19) pandemic have fundamentally changed the healthcare environment, with hospitals expected to have lost billions in 2021. A preexisting nationwide nursing shortage became drastically worse during the pandemic amid dramatically increasing labor costs. We examined the evolution and financial effects of these changes during repeated pandemic surges within a vascular surgery division at a tertiary medical center. Operating room, inpatient unit, and outpatient clinic financial data were examined retrospectively. The monthly averages for a 14-month control cohort before COVID-19 (January 2019 to February 2020) were compared to the averages for seven interval groups of sequential, 3-month cohorts from March 2020 through November 2021 (groups 1-7). The monthly relative value unit (RVU) generation had returned to the mean before the COVID-19 pandemic (2520 RVUs) after an isolated decrease early in the pandemic (group 1; 1734 RVUs). The RVUs ranged from 2540 to 2863 per month for groups 2 to 5, with a slight decline in groups 6 and 7. The average monthly RVUs in the COVID-19 period (2437 RVUs) were nearly equivalent (P =.93) to those for the pre–COVID-19 cohort. An analysis of payor mix demonstrated an increase in commercial and Medicaid payors, with a respective decrease in Medicare payors, during COVID-19. The contribution to indirect, or profit, from inpatient hospital and outpatient clinical revenue showed a drastic decrease in group 1, followed by a swift rebound when the government restrictions were eased (group 2). The total monthly vascular nursing unit expense demonstrated a marked increase with each sequential group during COVID-19, with an average monthly upsurge of +$82,171 (+47%; P <.001). An increase in the nursing labor expenses of +$884 per vascular case (from $1630 to $2514; +54%; P <.001) was observed in the COVID-19 era. The nursing labor costs per patient day had increased from $580 to $852 (+$272; +53%; P <.001). The nursing labor cost per RVU had increased from $69.5 to $107.7 (+$38.2; +55%; P <.001). On a system-wide level, the agency-related nursing costs had increased from $4.9 million to $13.6 million per month (+178%; P <.001) in 2021 compared with 2020. The COVID-19 pandemic has had severe, nationwide effects on healthcare delivery, exacerbating the deleterious effects of an existing, critical nursing shortage. To the best of our knowledge, the present study is the first detailed analysis of this phenomenon and its effects on a surgical division. Our results have demonstrated a progressive, drastic increase in nursing labor costs during the pandemic, with a resultant sustained erosion of financial margins despite a level of clinical productivity, as measured in RVUs, equal to the prepandemic standards. This precarious trend is not sustainable and will require increased, targeted government funding. [ABSTRACT FROM AUTHOR]

In the current era of cost containment, the financial impact of high-cost procedures such as endovascular aneurysm repair (EVAR) remains an area of intensive interest. Previous reports suggested slim to negative operating margins with EVAR, prompting widespread initiatives to reduce cost and to improve reimbursement. In 2015, the Centers for Medicare and Medicaid Services (CMS) announced the reclassification of EVAR to more specific diagnosis-related group (DRG) coding and predicted an overall increase in hospital reimbursement. The potential impact of this change has not been described. Patients undergoing elective EVAR at a single institution between January 2014 and December 2018 were identified retrospectively, then stratified by date. Group 1 patients underwent EVAR before DRG change in 2015 and were classified with DRG 237/238, major cardiovascular procedure. Group 2 patients underwent EVAR after the change and were classified as DRG 268/269, aortic/heart assist procedures. The total direct cost included implant cost, operating room (OR) labor, room and board, and other supply costs. Net revenue reflected real payer mix values without extrapolation based on standard Medicare rates. Hospital profit was defined as the contribution to indirect (CTI), subtracting total direct cost from net revenue. A total of 188 encounters were included, 67 (36%) in group 1 and 121 (64%) in group 2. Medicare patients composed 84% of group 1 and 81% of group 2. CTI (profit) increased by $4447 (+123%) from $3615 in group 1 to $8062 in group 2. Net revenue per encounter increased by $2054 (+7.1%). In group 1, the higher reimbursement DRG code 237 was applied in 5 of 67 (7.5%) patients, whereas DRG code 268 was assigned in 19 of 121 (15.1%) patients in group 2. Total direct cost per encounter decreased by $2012 (−7.9%). This decrease in cost was driven by a reduction in implant cost, from a mean $16,914 per encounter in group 1 to a mean $15,655 in group 2 (−$1259 or −7.4% per encounter) and by a decrease in OR labor cost, $2838 in group 1 to $2361 in group 2 (−$477 or −17.0% per encounter). A significant improvement in hospital CTI was observed for elective EVAR during the course of the study. The increased DRG reimbursement after the Centers for Medicare and Medicaid Services coding changes in 2015 was a major driver of this salutary change. Notably, efforts to reduce implant and OR cost as well as to improve coding and documentation accuracy over time had an equally important impact on financial return. [ABSTRACT FROM AUTHOR]