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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134:30–35.

[16] Fong Y, Gonen M, Rubin D, Radzyner M, Brennan MF. Long-term

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doi:10.1016/j.jhep.2006.01.016