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Forum on Liver Transplantation642
main incentive for the hospital leadership might be the
putative better care and possibility to attract more patients
as well as to decrease the cost through a better delivery of
care and shorter hospital stay [1].
In conclusion, we believe that a center approach offers
the best setting for the optimal treatment of patients with
complex HPB diseases. To enable accountability and
credibility, the term center should be applied only on the
basis of well-defined criteria, most likely being limited to
academic institutions due to the important task of
performing research and offering innovative treatments.
We are convinced that this interdisciplinary model of
delivering health care will become standard and will be
recognized as the best way to optimize care in a specialized
field of medicine.
References
[1] Delco F, Muller MJ. Does a liver center make sense from a cost
perspective? J Hepatol 2006;44:642–646.
[2] Birkmeyer JD, Stukel TA, Siewers AE, Goodney PP, Wennberg DE,
Lucas FL. Surgeon volume and operative mortality in the United
States. N Engl J Med 2003;349:2117–2127.
* Corresponding author. Tel.:C41 44 255 11 11; fax:C41 44 255 45 03.
E-mail address: Fabiola.Delco@usz.ch (F. Delco).
Abbreviations: LT, liver transplantation.
[3] Glasgow RE, Showstack JA, Katz PP, Corvera CU, Warren RS,
Mulvihill SJ. The relationship between hospital volume and outcomes
of hepatic resection for hepatocellular carcinoma. Arch Surg 1999;
134:30–35.
[4] Bini EJ, Weinshel EH, Generoso R, Salman L, Dahr G, Pena-Sing I,
et al. Impact of gastroenterology consultation on the outcomes of
patients admitted to the hospital with decompensated cirrhosis.
Hepatology 2001;34:1089–1095.
[5] Fong Y, Gonen M, Rubin D, Radzyner M, Brennan MF. Long-term
survival is superior after resection for cancer in high-volume centers.
Ann Surg 2005;242:540–544.
[6] Langhorne P, Dennis MS. Stroke units: the next 10 years. Lancet
2004;363:834–835.
[7] Organised inpatient (stroke unit) care for stroke. Cochrane Database
Syst Rev; 2002:CD000197.
[8] Akosah KO, Schaper AM, Havlik P, Barnhart S, Devine S. Improving
care for patients with chronic heart failure in the community: the
importance of a disease management program. Chest 2002;122:
906–912.
[9] Belghiti J.Who should perform liver transplantation? Should that be the
transplant surgeon, the hepatobiliary surgeon, or the general surgeon?
Part II: The Hepatobiliary Surgeon. J Hepatol 2006;44:649–651.
[10] Tuttle-Newhall JE, Diehl AM. What impact does a specialized center
for transplantation and hepatobiliary disease have on post-graduate
resident training of gastroenterologists and surgeons? J Hepatol 2006;
44:659–662.
doi:10.1016/j.jhep.2006.01.015
Does a liver center make sense from a cost perspective?
Fabiola Delco1,*, Markus J. Muller2
1Division of Gastroenterology and Hepatology, Department of Internal Medicine, University Hospital of Zurich,
Raemistrasse 100, CH-8091 Zurich, Switzerland2WWZ Center for Economic Research, University of Basel, Basel, Switzerland
Despite the advance of capitalism and its concern with
profit maximization and process optimization, healthcare
decisions have historically mostly been driven by emotions.
In the current context of financial restraints, however,
healthcare management can no longer afford to disregard
general economic principles. As a consequence, it is
essential to address economic aspects when answering the
question whether a central or a regional approach should be
adopted for the treatment of specific medical disorders.
This article presents the array of costs arising from
disease and aims at analyzing the potential impact of a
centralized approach to liver disease on these different types
of costs. For the definition of liver center we refer to the
article by Clavien et al. in this forum.
1. Direct costs
Costs are commonly understood as of money paid to
receive goods or services. These expenses are referred to as
direct costs [1–3]. Production theory relies on the
differentiation in fixed and variable costs [4]. The
distinction is crucial for planning, investment and resource
optimization purposes. Applied to expenditures related with
healthcare delivery, fixed costs include those spent for the
procurement and maintenance of the infrastructure such as
buildings and equipment, as well as expenses deriving from
personnel employment. Variable costs encompass for
instance expenses for the purchase of medications,
laboratory kits, radiographic films and disposable supply.
While fixed costs remain unchanged over a period of time
and are insensitive to the output magnitude, variable costs
vary with output (Fig. 1).
A modern liver disease center is expected to make use of
advanced diagnostic and therapeutic techniques, such as
interventional endoscopy, gastrointestinal endosonography,
0
50
100
150
200
250
300
0 5 10 15 20
Mon
etar
y U
nits
Output Units
Fixed Costs 1
Fixed Costs 2
Variable Costs
Average Costs
Total Costs
New Investments
Fig. 1. Relationship between fixed, variable, total and average costs
with increasing number of output units. As new investments are
actuated, average costs show a step increase. If additional investments
(fixed costs 2) are smaller than initial investments (fixed costs 1),
average costs will drop below the level reached before the additional
capital was purchased.
Forum on Liver Transplantation 643
radiofrequency ablation therapy, transarterial chemoembo-
lization, transjugular intrahepatic porto-systemic shunt
placement, porto-systemic shunt surgery, hepatic surgery,
artificial liver support, and liver transplantation. In addition,
a liver center is expected to perform high-level research.
Professional operation of these services requires the
employment of highly trained specialists. Organizational
support is also vital for the success of a liver center.
To be competitive and maintain its operability, each
hospital providing liver services will have to carry the
whole bulk of fixed costs resulting from these infra-
structural investments, independent of use intensity.
Because variable costs incur incrementally with each unit
of output supplied, one may think that infrequent supply
may lead to cost savings. Average costs per unit of care
offered, however, are highest in a low output setting and
decrease progressively with raising quantity, as fixed costs
are then distributed among the large number of service
units delivered. This is especially true in the medical
environment where fixed costs have been shown to
represent a large portion of total costs, with a figure of
84% reported for a large teaching hospital in the United
States [5]. Similar to private industry, healthcare systems
could therefore achieve cost optimization by increasing the
amount of specific services delivered at one center and
removing provision of these services from other centers.
It has to be noted that this strategy results in a continuous
improvement of production efficiency only until the
maximal facility capacity has been reached (Fig. 1). For
example, let us assume for purposes of illustration that the
total number of CT scans that can be performed per year
with the available capacity of two tomographs and two
technicians amounts to 6000. In order to increase the
yearly performance to 8000 procedures, one more
tomograph has to be purchased and one more technician
employed. This will incur in a raise of the costs per unit
delivered compared to the preceding situation of fully
exploited capacity. Supposedly the radiologist capacity is
of 12,000 procedures, there is no need to employ one more
radiologist. Fixed costs related to the physician employ-
ment will still be distributed among the increasing number
of service units supplied. Up to the point at which an
additional radiologist needs to be recruited, average costs
will therefore continue to drop to levels below those
reached immediately before tomograph and technician
capacity was duplicated.
Every hospital unit relies on the provision of multiple
different services. It is a challenging task of the operative
hospital controlling to analyze the single production entities
and manage them to a global cost optimization for the entire
unit. A central approach to liver disease management would
have the effect that fixed costs are carried by only few
hospitals engaging in the care of a large amount of patients.
By abstaining from delivering care in a specific illness area,
the remaining hospitals will save fixed costs. This strategy
allows avoidance of the cost replication caused by the
purchase and maintenance of expensive but economically
unexploited medical structures, and thus leads to cost
containment.
2. Indirect costs
A relevant portion of total costs is caused by lost
productivity and death. Respective costs are termed as
indirect [1–3]. Medical treatment may result in full
health, morbidity or death. With the exception of disease-
free survival, both other outcomes will result in costs for
the society that go beyond the expenses for managing
disease persistence, recurrence and complications, as well
as for the care of terminal illness. These expenditures
will indeed add to direct medical costs. By contrast,
morbidity arising from insufficiently treated disease, its
sequels or from consequences of the treatment itself is
also associated with some kind of productivity loss in
form of reduced work performance, absenteeism, or
disability. Death represents the extreme case of pro-
ductivity loss. Although on occasions analytical difficul-
ties preclude the full measurement and valuation of all
such indirect costs in monetary terms, attempts should be
made to account for this important source of burden in
healthcare.
Forum on Liver Transplantation644
Sparse literature is published on the occupational status
and degree of disability benefits among the population of
patients with end-stage liver disease, and available reports
are limited to the setting of liver transplantation (LT). In a
German study analyzing LTs performed between 1989
and 1998, 44% recipients were employed prior to LT and
22% therafter [6]. In the follow-up period, 80% of the
pensioners were retired due to disability, and only 20%
because they had reached the age of retirement. While
these findings may partially reflect specific cultural and
societal patterns and be predicted by some demographic
factors, outcome per se is expected to be an important
determinant of the largely impaired productivity and low
employment rate among LT recipients and individuals
with significant liver disease.
One of the advantages of focusing care of selected
disorders to competence centers is the recruitment of a
highly specialized workforce. A positive association
between medical specialization and outcome has indeed
been shown for different clinical conditions [7–9]. A trend
toward a lower inpatient mortality rate in hospitals with
access to a gastroenterologist compared to hospitals without
this availability was also observed for 1186 patients with
end-stage liver disease [10]. It can be hypothesized that such
an association is similarly encountered at higher levels of
care specialization where learning curves have flattened and
expertise has been reached.
Indirect evidence for the effect of experience on
outcome has also been provided by a large amount of
literature indicating that hospital and surgeon procedure
volume are strongly inversely correlated with mortality.
Birkmeyer et al. conclude that, for selected cardiovascular
and cancer procedures, the risk of operative death can be
significantly reduced by referring patients to high-volume
hospitals [11]. The largest risk reduction was shown for
cancer surgery with a particularly marked effect for
gastrointestinal cancer surgery. The advantage of selecting
a very-high-volume versus a very-low-volume hospital
was greatest for pancreatic resection with an absolute
difference in adjusted mortality rate of 12.5% and an odds
ratio of 0.2. A previously published systematic review on
the topic came to similar conclusions and stated that the
most consistent and striking absolute differences in
mortality rates between high- and low-volume hospitals
were reported for pancreatic and esophageal cancer
surgery with a median reduction of 13 and 12 deaths
percent, respectively [12]. For pancreatico-duodenectomy,
not only perioperative but also post-discharge survival
have been shown to be significantly better when surgery is
performed at high-volume facilities [13]. The same group
around Birkmeyer noted an overall decrease in the 3-year
survival rate from 37 to 29, 26 and 25% with each lower-
volume category, and an adjusted hazard ratio of 0.69 for
the extreme categories after excluding perioperative
deaths. Other authors investigating the same question for
hepatic resection, obtained similar results by showing
progressively lower in-hospital mortality with increasing
procedural volume. In the analysis by Choti et al., the
relative risk of dying during the postoperative period was
5.2 times higher in the lowest- as compared to the
highest-volume group [14]. A study of 507 patients who
underwent hepatectomy for hepatocellular carcinoma
included discharge data of all acute-care hospitals in
California [15]. Again, a highly significant inverse
relationship between decreasing operative mortality and
increasing hospital volume was noted with adjusted
mortality rates ranging from 9.4% for high-volume to
22.7% for low-volume centers. In their large study
comprising all hepatectomies (3734) and pancreatectomies
(2592) for cancer among Medicare patients in the years
1995 and 1996, Fong et al. found that both perioperative
and 5-year survival rates were better when surgery was
performed at large-volume centers with more than 25
cases annually rather than at lower volume centers [16].
These data are finally substantiated by transplantation
studies. In an analysis of all LTs carried out in the US
from 1992 to 1994, unaffiliated centers perfoming 20 or
less LTs per year were found with an adjusted 1-year
mortality rate twice as high compared to the group
including both affiliated centers with the same procedural
volume and larger centers with more than 20 LTs per year
[17]. Axelrod et al. studied over 19,000 LTs carried out
more recently between 1996 and 2000 [18]. Patients
undergoing liver transplantation at low-volume centers
(median annual volume of 21 LTs) had 30% higher odds
of death at 1 year compared to those who received their
allografts at high-volume centers (median annual volume
of 93 LTs).
In the light of these findings, it can barely be argued
against the fact that center size matters, especially in the
treatment of complex diseases.
3. Intangible costs
The often economically less perceived intangible costs
arise from negative emotions such as fear, anxiety,
inconvenience and unmet expectations [1]. Basically, they
represent the monetary value of an impaired quality of life
and can be furthermore categorized into two groups: those
related to treatment outcome and those related to disease
management. Unfortunately, literature on intangible costs is
sparse and practically absent in relation to liver disease.
Nevertheless, we will attempt to explore potential impli-
cations of a centralized management of liver disease with
respect to intangible costs.
Patients are often confronted with morbidity and its
associated limitations, and may be anxious about the course
of disease, later therapies, the ability to sustain their families
in the long run, or their future employment situation.
Likewise, liver patients may feel uncomfortable because of
their jaundice or about dietary restrictions, and hence avoid
Forum on Liver Transplantation 645
social contacts. Others feel being judged and treated as
alcoholics according to the general believes about liver
disease. Moreover, patients may not be able to spend active
time with their grandchildren or going to church although
they would like to do so. Given the association of procedural
volume and outcome, it is expected that intangible outcome-
related costs can be reduced with a large center approach to
liver disease.
By contrast, many patients referred to few centers of
excellence will be challenged by the long travel ways they
have to cover in order to receive healthcare. In some
instances, this will lead to stationary when ambulatory care
would have been sufficient in a near-geographical setting.
Moreover, access to care may be precluded for those who
cannot afford long traveling because they are too ill,
economically disadvantaged or lacking social support.
Personal emotional costs may arise from lost time
opportunity. The costs of dealing with an unfamiliar
environment are also not to be underestimated. So, patients
coming from far away are likely tomiss relatives, friends and
their confidence in known infrastructures. Cultural issues
may contribute to insensitive patient care and poor
appreciation of patient needs and expectations. For instance,
full-time patient attendance by relatives as valued by persons
of Mediterrean and South American descent is likely not to
be accommodated in centers of Northern location. Language
Table 1
Potential factors economically in favor of, against, or interfering with a cent
Potential factors economically in favor of, against, or interfering with a
Reduction of fixed costs
- buildings- equipment- personnel
Improved outcome
- morbidity
- mortality
work performancabsenteeismdisabilityquality of life
Impaired quality of life
- geographical challenge- cultural constraints- language barriers
cotimhe
Personal and political interests
Societal valuation of and+
+
?
barriers, finally, will impair communication preventing
optimal care. The impossibility for the patient to understand
disease status, prognosis, planned procedures and general
treatment will inevitably cause a feeling of impotence, fear
and suspicion of inadequate care. In turn, care may be less
efficient and result in a worse outcome.
Even though they can be quantified with difficulty in
monetary terms, all these interacting factors are likely to
impact on patient quality of life and hence merit
consideration when deciding about strategies of health
distribution.
In general, concentration of care for selected diseases to
centers of excellence seems to fulfill economic optimization
criteria. Some large health insurers already recognized the
potential for improved healthcare quality of directing
patients to high-volume centers and set accordingly volume
thresholds. The Leapfrog Group, a coalition of large
healthcare purchasers providing health benefits to more
than 37 million US citizens, requires their healthcare
suppliers to meet volume standards for selected high-risk
procedures [19,20].
In spite of the growing evidence favorizing the
development of competence centers, several obstacles
may impede this implementation. First, the premise for
efficient strategic planning consists in accurate economic
er approach to liver disease
center approach to liver disease
e
productivity impairment
mforte opportunitiesalthcare access
Forum on Liver Transplantation646
analyses aiming at identifying strengths, weaknesses and
potentialities of individual candidate centers. While in
private institutions advanced controlling systems are
generally well implemented, financial controlling is
often underdeveloped in public hospitals. Second, indi-
vidual political interests may oppose this process and
support program duplication. On the one hand, physicians
and hospitals will need to accept their new role in
healthcare delivery in case of activity limitation. On the
other hand, politicians may want to accommodate the
population’s expectations of ‘universal-local’ healthcare.
Society may highly value geographical inconvenience of
being treated in a center and willing to take into account
the costs of a worse than optimal local healthcare.
However, in order to come up with preferences and take
decisions, society must be able to appreciate the
magnitude of these costs. Society must also be aware of
the concept of opportunity costs referring to the lost
opportunity to invest money in cost-efficient healthcare
measures once the resources are spent for less cost-
efficient purposes [4]. Let us assume a better survival after
LT of 5% in high- compared to low-volume centers and
total LT costs of $200,000 [21–23]. In this case, an
additional $10 million expenditures will arise to the
society for every 1000 transplantations performed for not
opting for a centralized approach to liver disease. This
amount of money is irretrievably spent and not available
for other types of effective treatments or health
interventions. Moreover, given the existing shortage in
liver grafts, the question arises whether it is ethically
affordable to consume donated livers in procedures
unnecessarily resulting in a bad outcome. Additional
deaths and related costs will arise from preclusion of other
potential recipients from transplantation.
In conclusion, from an economic point of view
concentration of the care of liver disease to few large
centers seems a highly desirable goal. The grade of
desirability, however, depends on the societal preferences
as expressed in intangible costs and their ability to
counterbalance direct and indirect costs. Healthcare
delivery optimization will represent one of the most
substantial challenges in the near future. Time will show
(Table 1).
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Batista I, et al. Hospital volume and surgical mortality in the United
States. N Engl J Med 2002;346:1128–1137.
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Cameron JL, et al. Should hepatic resections be performed at high-
volume referral centers? J Gastrointest Surg 1998;2:11–20.
[15] Glasgow RE, Showstack JA, Katz PP, Corvera CU, Warren RS,
Mulvihill SJ. The relationship between hospital volume and outcomes
of hepatic resection for hepatocellular carcinoma. Arch Surg 1999;
134:30–35.
[16] Fong Y, Gonen M, Rubin D, Radzyner M, Brennan MF. Long-term
survival is superior after resection for cancer in high-volume centers.
Ann Surg 2005;242:540–544 [discussion 4–7].
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mortality after liver transplantation. N Engl J Med 1999;341:
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doi:10.1016/j.jhep.2006.01.016
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