Maximizing Physician-Hospital Alignment: Lessons Learned From Effective Models of Joint Arthroplasty Care

Time-Driven Activity-Based Costing Analysis Identifies Use of Consumables and Operating Room Time as Factors Associated With Increased Cost of Outpatient Primary Hip Arthroscopic Labral Repair

PURPOSE

To use time-driven, activity-based costing (TDABC) methodology to investigate drivers of cost variation and to elucidate preoperative and intraoperative factors associated with increased cost of outpatient arthroscopic hip labral repair.

METHODS

A retrospective analysis of data from January 2020 to October 2021 was performed. Patients undergoing primary hip arthroscopy for labral repair in the outpatient setting were included. Indexed TDABC data from Avant-garde Health's analytics platform were used to represent cost-of-care breakdowns. Patients in the top decile of cost were defined as high cost, and cost category variance was determined as a percent increase between high and low cost. Analyses tested for associations between preoperative and perioperative factors with total cost. Surgical procedures performed concomitantly to labral repair were included in subanalyses.

RESULTS

Data from 151 patients were analyzed. Consumables made up 61% of total outpatient cost with surgical personnel costs (30%) being the second largest category. The average total cost was 19% higher for patients in the top decile of cost compared to the remainder of the cohort. Factors contributing to this difference were implants (36% higher), surgical personnel (20% higher), and operating room (OR) consumables (15% higher). Multivariate linear regression modeling indicated that OR time (Standardized β = 0.504; P < .001) and anchor quantity (standardized β = 0.443; P < .001) were significant predictors of increased cost. Femoroplasty (Unstandardized β = 15.274; P = .010), chondroplasty (Unstandardized β = 8.860; P = .009), excision of os acetabuli (unstandardized β = 13.619; P = .041), and trochanteric bursectomy (Unstandardized β = 21.176; P = .009) were also all independently associated with increasing operating time.

CONCLUSIONS

TDABC analysis showed that OR consumables and implants were the largest drivers of cost for the procedure. OR time was also shown to be a significant predictor of increased costs.

LEVEL OF EVIDENCE

Level IV, economic analysis.

Reverse and Anatomic Shoulder Arthroplasty Regional Usage and Open Payment Analysis Using the Centers for Medicare and Medicaid Services Database

Background

This retrospective review aimed to assess if open payments made by industry arthroplasty companies to physicians and hospital systems were significantly affected by implant type and geographic variation.

Methods

Data was obtained from the Centers for Medicare and Medicaid Services (CMS) publicly available open payment datasets (2016-2019). Geographic locations were identified using regions as defined by the US Census Bureau. A linear regression was calculated to predict the open payment made based on the created variable region, the most used implant type (reverse vs anatomic, n > 30 to be included), and their hypothesized interaction.

Results

A significant regression equation was found for the hypothesized interaction between implant and region, F(13,11 186) = 3.446, P < .0001, with an R2 of 0.005. Within the regression, the implant type alone was not significantly related to the open payment (P = .070) but only became significant when paired with the region in the South (US$5807; P < .0001) and West (US$5638; P = .0012) compared to the Northeast.

Discussion

Our multivariate linear regression model revealed that reverse total shoulder implants were associated with higher open payments, but only within the South and West regions. This indicates that the contributions made by industry arthroplasty companies are a function of both implant and region.

Prediction of suitable outpatient candidates following revision total knee arthroplasty using machine learning

Aims

To identify variables independently associated with same-day discharge (SDD) of patients following revision total knee arthroplasty (rTKA) and to develop machine learning algorithms to predict suitable candidates for outpatient rTKA.

Methods

Data were obtained from the American College of Surgeons National Quality Improvement Programme (ACS-NSQIP) database from the years 2018 to 2020. Patients with elective, unilateral rTKA procedures and a total hospital length of stay between zero and four days were included. Demographic, preoperative, and intraoperative variables were analyzed. A multivariable logistic regression (MLR) model and various machine learning techniques were compared using area under the curve (AUC), calibration, and decision curve analysis. Important and significant variables were identified from the models.

Results

Of the 5,600 patients included in this study, 342 (6.1%) underwent SDD. The random forest (RF) model performed the best overall, with an internally validated AUC of 0.810. The ten crucial factors favoring SDD in the RF model include operating time, anaesthesia type, age, BMI, American Society of Anesthesiologists grade, race, history of diabetes, rTKA type, sex, and smoking status. Eight of these variables were also found to be significant in the MLR model.

Conclusion

The RF model displayed excellent accuracy and identified clinically important variables for determining candidates for SDD following rTKA. Machine learning techniques such as RF will allow clinicians to accurately risk-stratify their patients preoperatively, in order to optimize resources and improve patient outcomes.

Prediction of Non-Home Discharge Following Total Hip Arthroplasty in Geriatric Patients

Introduction

The majority of total hip arthroplasty (THA) patients are discharged home postoperatively, however, many still require continued medical care. We aimed to identify important characteristics that predict nonhome discharge in geriatric patients undergoing THA using machine learning. We hypothesize that our analyses will identify variables associated with decreased functional status and overall health to be predictive of non-home discharge.

Materials and Methods

Elective, unilateral, THA patients above 65 years of age were isolated in the NSQIP database from 2018-2020. Demographic, pre-operative, and intraoperative variables were analyzed. After splitting the data into training (75%) and validation (25%) data sets, various machine learning models were used to predict non-home discharge. The model with the best area under the curve (AUC) was further assessed to identify the most important variables.

Results

In total, 19,840 geriatric patients undergoing THA were included in the final analyses, of which 5194 (26.2%) were discharged to a non-home setting. The RF model performed the best and identified age above 78 years (OR: 1.08 [1.07, 1.09], P < .0001), as the most important variable when predicting non-home discharge in geriatric patients with THA, followed by severe American Society of Anesthesiologists grade (OR: 1.94 [1.80, 2.10], P < .0001), operation time (OR: 1.01 [1.00, 1.02], P < .0001), anemia (OR: 2.20 [1.87, 2.58], P < .0001), and general anesthesia (OR: 1.64 [1.52, 1.79], P < .0001). Each of these variables was also significant in MLR analysis. The RF model displayed good discrimination with AUC = .831.

Discussion

The RF model revealed clinically important variables for assessing discharge disposition in geriatric patients undergoing THA, with the five most important factors being older age, severe ASA grade, longer operation time, anemia, and general anesthesia.

Conclusions

With the rising emphasis on patient-centered care, incorporating models such as these may allow for preoperative risk factor mitigation and reductions in healthcare expenditure.

Identifying and Creating Value for Employed Arthroplasty Surgeons in an Era of Decreasing Reimbursement

Recent regulatory changes made by the Center for Medicare and Medicaid Services (CMS) will result in a 9% decrease in reimbursement for hip and knee replacements by the end of 2022. Combining this with CMS's recent removal of total knee and total hip arthroplasty from the inpatient-only list has begun to take effect on the bottom line for hospital systems, which now employ around 50% of the arthroplasty community. Employed joint replacement surgeons should continue to innovate and be leaders within their hospital systems in the outpatient and ambulatory surgery space to recoup lost value, increase autonomy, and should be compensated for this work. Employed arthroplasty surgeon leaders can better align goals with and control the narrative in the C-suite to redefine their value as the most consistent, dependable, and transparent department within a larger health system or corporate medical group.

Price Effects Of Vertical Integration And Joint Contracting Between Physicians And Hospitals In Massachusetts

Vertical integration in health care has recently garnered scrutiny by antitrust authorities and state regulators. We examined trends, geographic variation, and price effects of vertical integration and joint contracting between physicians and hospitals, using physician affiliations and all-payer claims data from Massachusetts from the period 2013-17. Vertical integration and joint contracting with small and medium health systems rose from 19.5 percent in 2013 to 32.8 percent in 2017 for primary care physicians and from 26.1 percent to 37.8 percent for specialists. Vertical integration and joint contracting with large health systems slightly declined, whereas geographic variation in these physician affiliations rose. We found that vertical integration and joint contracting led to price increases from 2013 to 2017, from 2.1 percent to 12.0 percent for primary care physicians and from 0.7 percent to 6.0 percent for specialists, with the greatest increases seen in large health systems. These findings can inform policy makers seeking to limit growth in health care prices.

Joint-Venture Ambulatory Surgery Centers: The Perfect Partnership

BACKGROUND

Ambulatory surgery growth has increased in the last few decades as ambulatory surgery centers have been shown to succeed in cost efficiencies through their smaller size and breadth, specialization of care, and ability to quickly participate in perioperative process improvement and education.

METHODS

A 5-year retrospective fiscal review was performed for all Northwell Health-physician ambulatory surgery center joint ventures. The outcome measures studied included model of ownership, specialty types, and gross revenue. Additional facility characteristics were studied, including growth trajectory, facility size, and cost to build a de novo facility.

RESULTS

Eleven free-standing ambulatory surgery centers were identified at Northwell Health during the 5-year study period. The total gross revenue for all Northwell clinical joint ventures for 2019 alone was $102,854,000. Northwell Health is a majority stakeholder in eight of their joint venture ambulatory surgery centers, with an average Northwell ownership of 53 percent and an average number of physician owners per facility of 11. The number of hospital-physician joint-venture ambulatory surgery centers grew from two to 11 facilities during the study period (450 percent). Surgical volume followed a similar trajectory, increasing 295 percent over the same time period.

CONCLUSIONS

The ambulatory surgery center setting provides a vast number of possibilities for key stakeholders, including patients themselves, to benefit from financial and clinical efficiencies. Ambulatory surgery centers have been popular, as they meet patient expectations for convenience of elective surgery, reduce payer and clinical pressures to minimize length of stay in hospitals, and achieve similar or higher quality care with less intense resources.

Hip and Knee Replacement Patients' Experiences With an Orthopaedic Patient Navigator: A Qualitative Study

Hip and knee replacement surgery is common, yet more than 10% of patients who undergo total hip replacement (THR) and total knee replacement (TKR) report postsurgery dissatisfaction. Recommendations for improving patient experience after total joint replacement surgery include increasing support to patients, including having a patient navigator available to patients before and after surgery. This article reports on THR and TKR patients' experiences of using an orthopaedic patient navigator. We employed qualitative description to understand THR and TKR patients' experiences of interacting with an orthopaedic patient navigator in a community teaching hospital. Telephone interviews were conducted with 15 purposefully selected total joint replacement patients (TKR: n = 11; THR: n = 4) who had at least one contact with the navigator. Interview transcripts were analyzed using thematic analysis. Patients described receiving physical support services, emotional support services, informational support services, and care coordination services from the patient navigator. All interactions with the patient navigator were positive. Knowing the patient navigator was available for any future concerns also provided indirect benefits of reassurance, comfort, and security. Patients described these direct and indirect benefits as potentially having long-lasting and resilient positive effects. An orthopaedic patient navigator can have a positive impact on patients' THR and TKR experience and fill gaps in support identified in earlier studies. Addressing patients' complex and varied care needs is well suited to a clinical nurse specialist in the role. Investing in an orthopaedic patient navigator provides reassurance to patients that their needs are a priority and will be addressed in a timely manner.

Artificial neural network prediction of same-day discharge following primary total knee arthroplasty based on preoperative and intraoperative variables

AIMS

This study used an artificial neural network (ANN) model to determine the most important pre- and perioperative variables to predict same-day discharge in patients undergoing total knee arthroplasty (TKA).

METHODS

Data for this study were collected from the National Surgery Quality Improvement Program (NSQIP) database from the year 2018. Patients who received a primary, elective, unilateral TKA with a diagnosis of primary osteoarthritis were included. Demographic, preoperative, and intraoperative variables were analyzed. The ANN model was compared to a logistic regression model, which is a conventional machine-learning algorithm. Variables collected from 28,742 patients were analyzed based on their contribution to hospital length of stay.

RESULTS

The predictability of the ANN model, area under the curve (AUC) = 0.801, was similar to the logistic regression model (AUC = 0.796) and identified certain variables as important factors to predict same-day discharge. The ten most important factors favouring same-day discharge in the ANN model include preoperative sodium, preoperative international normalized ratio, BMI, age, anaesthesia type, operating time, dyspnoea status, functional status, race, anaemia status, and chronic obstructive pulmonary disease (COPD). Six of these variables were also found to be significant on logistic regression analysis.

CONCLUSION

Both ANN modelling and logistic regression analysis revealed clinically important factors in predicting patients who can undergo safely undergo same-day discharge from an outpatient TKA. The ANN model provides a beneficial approach to help determine which perioperative factors can predict same-day discharge as of 2018 perioperative recovery protocols. Cite this article: Bone Joint J 2021;103-B(8):1358-1366.

Preoperative Education for Total Joint Arthroplasty: Does Reimbursement Reduction Threaten Improved Outcomes?

BACKGROUND

Nurse navigation programs have been previously shown to reduce cost and improve outcomes after total joint arthroplasty (TJA). Medicare has proposed a 13.7% reduction in professional fee reimbursement for TJA procedures that may adversely impact providers' and health systems' ability to fund ancillary support resources such as nurse navigators.

METHODS

A consecutive series of primary TJAs performed between April 2019 and February 2020 was retrospectively reviewed. Clinical and financial outcomes of patients attending a nurse navigator-led preoperative education class were compared with those who did not attend.

RESULTS

There were 2057 TJAs identified during the study period. Most patients attended the preoperative education class (82.7%) and were discharged home (92.8%). Controlling for significant differences between groups, class attendance was associated with reduced length of stay (LOS), increased chance of 0- or 1-day LOS, reduced chance of discharge to a skilled nursing facility, and reduced hospital charges. For this patient sample, a proposed 13.7% reduction in nurse navigator-led classes was modeled to increase overall cost to payers by >$400,000 annually. Complete elimination of this class was estimated to increase the total annual cost by >$5,700,000 and cost per TJA by >$2700.

CONCLUSION

The use of a nurse navigator-led preoperative education class was associated with shorter LOS, more frequent 0- and 1-day LOS, reduced discharge to skilled nursing facilities, and lower total hospital charges for those patients who attended. Potential reductions proposed by Medicare may interfere with the ability to support such services and negatively impact both clinical and financial outcomes.

Analysis of Charges and Payments for Outpatient Arthroscopic Meniscectomy From 2005 to 2014: Hospital Reimbursement Increased Steadily as Surgeon Payments Declined

Background:

Charge and reimbursement trends for arthroscopic partial meniscectomies among orthopaedic surgeons, anesthesiologists, and hospital/surgery centers have not been formally analyzed, even though meniscectomies are the most commonly performed orthopaedic surgery.

Purpose:

To analyze Medicare charge and reimbursement trends for surgeons, anesthesiologists, and hospital/surgery centers for outpatient arthroscopic partial meniscectomies performed in the United States.

Study Design:

Economic and decision analysis; Level of evidence, 4.

Methods:

We analyzed trends in surgeon, anesthesiologist, and hospital charges and reimbursements for outpatient isolated arthroscopic partial meniscectomies from 2005 to 2014. Current Procedural Terminology codes were used to capture charge and reimbursement information using the nationally representative 5% Medicare sample. National and regional trends for charge, reimbursement, and Charlson Comorbidity Index (CCI) were evaluated using linear regression analysis.

Results:

A total of 31,717 patients were analyzed in this study. Charges across all groups increased significantly (P < .001) during the 10-year study period, with an increase of 18.4% ($2754-$3262) for surgeons, 85.5% ($802-$1480) for anesthesiologists, and 116.8% ($2743-$5947) for hospitals. Surgeon reimbursements declined by 15.5% ($504-$426; P = .072) during this period. Anesthesiologist and hospital reimbursements increased significantly during by 36.5% ($133-$182; P < .001) and 28.9% ($1540-$1984; P < .001) during the 10-year study period, respectively. The annual incidence of partial meniscectomies per 10,000 database patients decreased significantly from 18.3 to 15.6 over the course of the study (14.8% decrease; P = .009), while the CCI did not change significantly (P = .798).

Conclusion:

Hospital and anesthesiologist Medicare reimbursements for outpatient arthroscopic partial meniscectomies increased significantly, while surgeon reimbursements decreased. In 2005, hospitals were reimbursed 205% more ($1540 vs $504) than surgeons, and by 2014, they were reimbursed 365% more ($1984 vs $426), indicating that the gap between hospital and surgeon reimbursement is rising. Improved understanding of charge and reimbursement trends represents an opportunity for key stakeholders to improve financial alignment across the field of orthopaedics.

Hospital Discharge Within a Day After Total Knee Arthroplasty Does Not Affect 1-Year Complications Compared With Rapid Discharge

INTRODUCTION

In patients undergoing total knee arthroplasty (TKA), it is unclear whether a difference in complication rates exists between patients discharged the day of surgery compared with subsequent postoperative days.

METHODS

Data were collected from the PearlDiver Patient Records Database from 2007 to 2017. Subjects were identified using International Classification of Diseases codes. Eligible patients were stratified into the following three groups: (1) same day discharge (<24 hours postoperatively), (2) rapid discharge (1 to 2 days), and (3) traditional discharge (3 to 4 days) based on the length of stay.

RESULTS

In total, 84,864 patients were identified as having undergone primary TKA. The incidence of same day discharge, rapid discharge, and traditional discharge was 2.36% (2,004/84,864), 28.56% (24,235/84,864), and 69.08% (58,625/84,864), respectively. After adjustment, no notable differences were observed in the overall complication and revision rates between the same day discharge group and either the rapid discharge or the traditional discharge group. On multivariate analysis, patients in the rapid discharge cohort were less likely to require manipulation under anesthesia or develop periprosthetic joint infection when compared with the traditional discharge group at 1 year postoperatively.

CONCLUSIONS

For those who qualify after careful selection, same day and rapid discharge TKA may be a feasible alternative to the traditional inpatient TKA.

LEVEL OF EVIDENCE

A level 3 retrospective, prognostic study.

Identifying surgeon and institutional drivers of cost in total shoulder arthroplasty: a multicenter study

BACKGROUND

Despite rapid increases in the demand for total shoulder arthroplasty, data describing cost trends are scarce. We aim to (1) describe variation in the cost of shoulder arthroplasty performed by different surgeons at multiple hospitals and (2) determine the driving factors of such variation.

METHODS

A standardized, highly accurate cost accounting method, time-driven activity-based costing, was used to determine the cost of 1571 shoulder arthroplasties performed by 12 surgeons at 4 high-volume institutions between 2016 and 2018. Costs were broken down into supply costs (including implant price and consumables) and personnel costs, including physician fees. Cost parameters were compared with total cost for surgical episodes and case volume.

RESULTS

Across 4 institutions and 12 surgeons, surgeon volume and hospital volume did not correlate with episode-of-care cost. Average cost per case of each institution varied by factors of 1.6 (P = .47) and 1.7 (P = .06) for anatomic total shoulder arthroplasty (TSA) and reverse total shoulder arthroplasty (RSA), respectively. Implant (56% and 62%, respectively) and personnel costs from check-in through the operating room (21% and 17%, respectively) represented the highest percentages of cost and highly correlated with the cost of the episode of care for TSA and RSA.

CONCLUSIONS

Variation in episode-of-care total costs for both TSA and RSA had no association with hospital or surgeon case volume at 4 high-volume institutions but was driven primarily by variation in implant and personnel costs through the operating room. This analysis does not address medium- or long-term costs.

The Missing Link: The Business of Plastic Surgery

The practice of plastic surgery has become more complex. As plastic surgeons face the postgraduate realities of contracts, negotiations, and health system employment, they are frequently unprepared to effectively manage these challenges. Furthermore, many plastic surgery training programs do not emphasize real-world business and policy concerns in residency training. Plastic and Reconstructive Surgery endeavors to provide robust conceptual education and guidance in business and policy to help both private practice and academic plastic surgeons participate in, lead, and shape the future of health care.

Hospital Payments Increase as Payments to Surgeons Decrease for Common Inpatient Orthopaedic Procedures

As healthcare costs continue to increase in the United States, it is important to understand the trends in the allocation of healthcare spending for common orthopaedic surgical procedures. We investigated the recent trends in (1) total net payments (for episode of care), (2) payments to hospitals, (3) payments to physicians, (4) payments to physicians as a percentage of total net payments, and (5) regional variation in hospital and physician payments for four common orthopaedic procedures.

Methods

Using a private insurance claims database, we analyzed the payments to US hospitals and physicians from 2010 to 2016 for primary total hip arthroplasty (THA) (n = 128,269), total knee arthroplasty (TKA) (n = 223,319), 1-level anterior cervical diskectomy and fusion (ACDF) (n = 51,477), and 1-level lumbar-instrumented posterior spinal fusion (PSF) (n = 45,680). Regional variations in payments were also assessed. Trends were analyzed using linear regression models adjusting for age, sex, comorbidities, duration of hospital stay, and inflation (alpha = 0.05).

Results

Inflation-adjusted total net payments for the episode of care increased by the following percentages per year: 5.2% for ACDF, 3.2% for PSF, 2.9% for TKA, and 2.6% for THA. Annual inflation-adjusted hospital payments increased significantly for all 4 procedures, whereas annual inflation-adjusted physician payments decreased by -2.2%/year for PSF, -1.5%/year for TKA, -1.1%/year for THA, and -0.4%/year for ACDF (all, P < 0.001). As a percentage of total net payments, physician payments decreased markedly for ACDF (-4.6%), PSF (-3.1%), TKA (-2.1%), and THA (-1.8%). Hospital and physician payments varied significantly by region and were both highest in the West (P < 0.001).

Conclusions

From 2010 to 2016, inflation-adjusted total net payments for 4 common orthopaedic surgical procedures increased markedly, as did payments to the US hospitals for these procedures. Payments to orthopaedic surgeons for these procedures decreased markedly during the same period.

Variation in the Cost of Care for Different Types of Joint Arthroplasty

BACKGROUND

Lower-extremity arthroplasty constitutes the largest burden on health-care spending of any Medicare diagnosis group. Demand for upper extremity arthroplasty also continues to rise. It is necessary to better understand costs as health care shifts toward a bundled-payment accounting approach. We aimed (1) to identify whether variation exists in total cost for different types of joint arthroplasty, and, if so, (2) to determine which cost parameters drive this variation.

METHODS

The cost of the episode of inpatient care for 22,215 total joint arthroplasties was calculated by implementing time-driven activity-based costing (TDABC) at a single orthopaedic specialty hospital from 2015 to 2018. Implant price, supply costs, personnel costs, and length of stay for total knee, total hip, anatomic total shoulder, reverse total shoulder, total elbow, and total ankle arthroplasty were analyzed. Individual cost parameters were compared with total cost and volume.

RESULTS

Higher implant cost appeared to correlate with higher total costs and represented 53.8% of the total cost for an inpatient care cycle. Total knee arthroplasty was the least-expensive and highest-volume procedure, whereas total elbow arthroplasty had the lowest volume and highest cost (1.65 times more than that of total knee arthroplasty). Length of stay was correlated with increased personnel cost but did not have a significant effect on total cost.

CONCLUSIONS

Total inpatient cost at our orthopaedic specialty hospital varied by up to a factor of 1.65 between different fields of arthroplasty. The highest-volume procedures-total knee and hip arthroplasty-were the least expensive, driven predominantly by lower implant purchase prices.

CLINICAL RELEVANCE

We are not aware of any previous studies that have accurately compared cost structures across upper and lower-extremity arthroplasty with a uniform methodology. The present study, because of its uniform accounting process, provides reliable data that will allow clinicians to better understand cost relationships between different procedures.

A Novel, Synergistic Model in Total Joint Arthroplasty: A Report of 2 Specialty Hospitals With Joint Ownership Between Physicians and Healthcare Systems

BACKGROUND

In 2010, the Affordable Care Act introduced new restrictions on the expansion of physician-owned hospitals (POHs) due to concerns over financial incentives and increased costs. The purpose of this study is to determine whether joint ventures between tertiary care and specialty hospitals (SHs) allowing physician ownership (POHs) have improved outcomes and lower cost following THA and TKA.

METHODS

After institutional review board approval, a retrospective review of consecutive series of primary THA and TKA patients from 2015 to 2016 across a single institution comprised of 14 full-service hospitals and 2 SHs owned as a joint venture between physicians and their health system partners. Ninety-day episode-of-care claims cost data from Medicare and a single private insurer were reviewed with the collection of the same demographic data, medical comorbidities, and readmission rates for both the SHs and non-SHs. A multivariate regression analysis was performed to determine the independent effect of the SHs on episode-of-care costs.

RESULTS

Of the 6537 patients in the study, 1936 patients underwent a total joint arthroplasty at an SH (29.6%). Patients undergoing a procedure at an SH had shorter lengths of stay (1.29 days vs 2.23 days for Medicare, 1.15 vs 1.86 for private payer, both P < .001), were less likely to be readmitted (4% vs 7% for Medicare, P = .001), and had lower mean 90-day episode-of-care costs ($16,661 vs $20,579 for Medicare, $26,166 vs $35,222 for private payers, both P < .001). When controlling for the medical comorbidities and demographic variables, undergoing THA or TKA at an SH was associated with a decrease in overall episode costs ($3266 for Medicare, $13,132 for private payer, both P < .001).

CONCLUSION

Even after adjusting for a healthier patient population, the joint venture partnership with health systems and physician-owned SHs demonstrated lower 90-day episode-of-care costs than non-SHs following THA and TKA. Policymakers and practices should consider these data when considering the current care pathways.

What Are the Uses and Limitations of Time-driven Activity-based Costing in Total Joint Replacement?

BACKGROUND

With increasing emphasis on value-based payment models for primary total joint arthroplasty (TJA), there is greater need for orthopaedic surgeons and hospitals to better understand the actual costs and resource use of TJA. Time-driven activity-based costing (TDABC) is a methodology for accurate cost estimation, but its application in the TJA care pathway across institutions/regions has not yet been analyzed.

QUESTIONS/PURPOSES

In this systematic review of studies applying TDABC to primary TJA, we investigated the following: (1) Is there variation in TDABC methodology and cost estimates across institutions? (2) Is a standard set of direct and indirect costs included across studies? (3) Is there a difference in cost estimates derived from TDABC and traditional hospital cost-accounting approaches? and (4) How are institutions using TDABC (process and outputs) with respect to the TJA care pathway?

METHODS

A comprehensive search strategy was developed that included the keywords "TDABC," "time-driven activity-based cost," "THA," "TKA," "THR," "TKR," and "TJR" in the PubMed/MEDLINE, EMBASE, Web of Science, Ovid SP, Scopus, and ScienceDirect databases for articles published between 2004 and 2018 as well as extensive hand searching and citation mining. Relevant studies (n = 15) were screened to include THA or TKA as the focus of the TDABC model, full-text articles, TDABC-based cost estimates for TJA, and studies written in English (n = 8). Due to the heterogeneity of outcomes/methodology in TDABC studies involving TJA, quality assessment was based on each study's adherence to the seven steps delineated by Kaplan et al. in their original publication introducing TDABC in health care.

RESULTS

There was substantial variation in TDABC methodology (especially in scope), adherence to the seven steps of TDABC, and data collection. Only five of eight studies incorporated indirect costs into their TDABC calculation, with notable differences in which direct and indirect expenses were included. TDABC-based cost estimates for TJA ranged from USD 7081 to USD 29,557, with variation driven by the TJA timeframe and whether implant costs were included in the costing calculation. TDABC was most frequently used to compare against traditional hospital accounting methods (n = 4), to increase operational efficiency (n = 4), to reduce wasted resources (n = 3), and to mitigate risk (n = 3).

CONCLUSIONS

TDABC-based cost estimates are more granular and useful in practice than those calculated via traditional hospital accounting; however, there is a lack of standardized principles to guide TDABC implementation (especially for indirect costs) due to institutional and regional differences in TDABC application. Although TDABC methodology will likely continue to vary somewhat between studies, standardized principles are needed to guide the definition, estimation, and reporting of costs to enable detailed examination of study methodology and inputs by readers.

LEVEL OF EVIDENCE

Level III, economic and decision analysis.

A Nurse Navigator Program Is Effective in Reducing Episode-of-Care Costs Following Primary Hip and Knee Arthroplasty

BACKGROUND

Alternative payment models for total hip arthroplasty (THA) and total knee arthroplasty (TKA) have incentivized providers to deliver higher quality care at a lower cost, prompting some institutions to develop formal nurse navigation programs (NNPs). The purpose of this study was to determine whether a NNP for primary THA and TKA resulted in decreased episode-of-care (EOC) costs.

METHODS

We reviewed a consecutive series of primary THA and TKA patients from 2015-2016 using claims data from the Centers for Medicare and Medicaid Services and Medicare Advantage patients from a private insurer. Three nurse navigators were hired to guide discharge disposition and home needs. Ninety-day EOC costs were collected before and after implementation of the NNP. To control for confounding variables, we performed a multivariate regression analysis to determine the independent effect of the NNP on EOC costs.

RESULTS

During the study period, 5275 patients underwent primary TKA or THA. When compared with patients in the prenavigator group, the NNP group had reduced 90-day EOC costs ($19,116 vs $20,418 for Medicare and $35,378 vs $36,961 for private payer, P < .001 and P < .012, respectively). Controlling for confounding variables in the multivariate analysis, the NNP resulted in a $1575 per Medicare patient (P < .001) and a $1819 per private payer patient cost reduction (P = .005). This translates to a cost savings of at least $5,556,600 per year.

CONCLUSION

The implementation of a NNP resulted in a marked reduction in EOC costs following primary THA and TKA. The cost savings significantly outweighs the added expense of the program. Providers participating in alternative payment models should consider using a NNP to provide quality arthroplasty care at a reduced cost.