Human Capital Depreciation and Efficiency in Surgical Care

1. 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 SaketGirotra, MD.

2. Acknowledgements • This research was supported by grant number 1 R03 HS019743-01 (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 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.

3. 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)

4. 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

5. Model of surgical outcomes What do surgeons produce? Surgeries, or something else?

6. Model of surgical outcomes • Consider the following 1. Outcome= f(X,MDQuality,e)

7. Model of surgical outcomes • Consider the following 1. Outcome= f(X,MDQuality,e) 2. Mortalityijht = b0 + b1Xiht+ b2 Phys. Qualityjt + eijht

8. Model of surgical outcomes • Consider the following 1. Outcome= f(X,MDQuality,e) 2. Mortalityijht = b0 + b1Xiht+ b2 Phys. Qualityjt + eijht 3. Phys. Qualityjt= a0 + a1Physician Voljt-1+ a2 t-(t-1)+ ρj + uijht

9. Model of surgical outcomes • Consider the following 1. Outcome= f(X,MDQuality,e) 2. Mortalityijht = b0 + b1Xiht+ b2 Phys. Qualityjt + eijht 3. Phys. Qualityjt= a0 + a1Physician Voljt-1+ a2 t-(t-1)+ ρj + uijht Temporal distance between procedures Physician fixed effect which captures the endowment

10. Model of surgical outcomes • Consider the following 2. Mortalityijht = b0 + b1Xiht+ b2 Phys. Qualityjt + eijht 3. Phys. Qualityjt= a0 + a1Physician Voljt-1+ a2 t-(t-1)+ ρj + uijht SO by substitution we get 4. Mortalityijht = d0 + d1Xiht+ d2MDVoljt-1+ d3 t-(t-1)+ ρj +vijht

11. Model of surgical outcomes • Consider the following 1. Outcome= f(X,MDQuality,e) 2. Mortalityijht = b0 + b1Xiht+ b2 Phys. Qualityjt + eijht 3. Phys. Qualityjt= a0 + a1Physician Voljt-1+ a2 t-(t-1)+ ρj + uijht by substitution we get 4. Mortalityijht = d0 + d1Xiht+ 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.

12. 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

13. 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.

14. General Estimation Strategy 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

15. 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

16. Select provider characteristics

17. Select provider characteristics

18. Outcomes of PCI patients Standard errors clustered at the physician level in parentheses * p < 0.10, ** p < 0.05, *** p < 0.01

19. Outcomes of PCI Patients Treated by High Volume Physicians Standard errors clustered at the physician level in parentheses * p < 0.10, ** p < 0.05, *** p < 0.01

20. 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?

21. 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

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

23. 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

24. 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