Analysis of Commercially Negotiated Hospital Prices for Spinal Deformity Surgery in the United States.

BACKGROUND CONTEXT: Spinal deformity surgery is among the most resource-intensive inpatient procedures in the United States. Despite increased transparency in commercial pricing, the structural drivers of cost variation for complex spine surgery remain unclear.

PURPOSE: To characterize hospital-, market-, and community-level factors associated with variation in commercially negotiated prices for thoracolumbar spinal deformity surgery.

OUTCOME MEASURES (FUNCTIONAL MEASURES): The primary outcome measure was the log-transformed commercially negotiated price for thoracolumbar spinal deformity surgery.

METHODS: Hospital-level variables included bed size, teaching status, ownership, Case-Mix Index (CMI), and system affiliation. Market-level variables included wage index and concentration (Herfindahl-Hirschman Index). Community-level variables encompassed uninsured rate, Social Deprivation Index (SDI), racial composition, and population health metrics. Prices were log-transformed to address skewness. Multivariable linear regression utilized a hospital-payer-DRG contract-level dataset (n = 6,253 contracts from 2,449 hospitals), reflecting 30.5% attrition from the initial 3,526 hospitals due to complete-case exclusion for missing covariates (e.g., wage index and CMI).

RESULTS: The fully specified model, inclusive of state and insurer fixed effects (adjusted R² = 0.244), revealed that system affiliation was the strongest predictor of higher prices, with affiliated hospitals charging 21.1-41.8% more (p < 0.001). Larger bed count (p = 0.008) and higher CMI (p = 0.015) were also associated with higher prices, whereas non-teaching hospitals (p = 0.042) had lower prices. Higher labor costs (p < 0.001) and lower market competition (7.5-7.8% higher prices, p < 0.05) were each associated with higher prices. At the community level, higher uninsured rates (+13.4% per SD, p = 0.020) correlated with higher prices, whereas poorer health (-6.9% per SD, p = 0.045) and lower SDI (-4.1% per SD, p = 0.048) were linked to lower prices.

CONCLUSION: Hospital system size, labor costs, market concentration, and community context were associated with substantial variation in negotiated prices for surgical spinal deformity treatment.

STUDY DESIGN / SETTING: Cross-sectional analysis PATIENT SAMPLE: A total of 6,253 commercially negotiated prices for surgical thoracolumbar spinal deformity treatment (MS-DRG 456-458) were analyzed from 2,449 U.S. hospitals across five major commercial payers.