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

Elective THA for Indications Other Than Osteoarthritis Is Associated With Increased Cost and Resource Use: A Medicare Database Study of 135,194 Claims

BACKGROUND

Under Medicare's fee-for-service and bundled payment models, the basic unit of hospital payment for inpatient hospitalizations is determined by the Medicare Severity Diagnosis Related Group (MS-DRG) coding system. Primary total joint arthroplasties (hip and knee) are coded under MS-DRG code 469 for hospitalizations with a major complication or comorbidity and MS-DRG code 470 for those without a major complication or comorbidity. However, these codes do not account for the indication for surgery, which may influence the cost of care.Questions/purposes We sought to (1) quantify the differences in hospital costs associated with six of the most common diagnostic indications for THA (osteoarthritis, rheumatoid arthritis, avascular necrosis, hip dysplasia, posttraumatic arthritis, and conversion arthroplasty), (2) assess the primary drivers of cost variation using comparisons of hospital charge data for the diagnostic indications of interest, and (3) analyze the median length of stay, discharge destination, and intensive care unit use associated with these indications.

METHODS

This study used the 2019 Medicare Provider Analysis and Review Limited Data Set. Patients undergoing primary elective THA were identified using MS-DRG codes and International Classification of Diseases, Tenth Revision, Procedure Coding System codes. Exclusion criteria included non-fee-for-service hospitalizations, nonelective procedures, patients with missing data, and THAs performed for indications other than the six indications of interest. A total of 713,535 primary THAs and TKAs were identified in the dataset. After exclusions were applied, a total of 135,194 elective THAs were available for analysis. Hospital costs were estimated using cost-to-charge ratios calculated by the Centers for Medicare and Medicaid Services. The primary benefit of using cost-to-charge ratios was that it allowed us to analyze a large national dataset and to mitigate the random cost variation resulting from unique hospitals' practices and patient populations. As an investigation into matters of health policy, we believe that assessing the surgical cost borne by the "average" hospital was most appropriate. To analyze estimated hospital costs, we performed a multivariable generalized linear model controlling for patient demographics (gender, age, and race), preoperative health status, and hospital characteristics (hospital setting [urban versus rural], geography, size, resident-to-bed ratio, and wage index). We assessed the principal drivers of cost variation by analyzing the median hospital charges arising from 30 different hospital revenue centers using descriptive statistics. Length of stay, intensive care use, and discharge to a nonhome location were analyzed using multivariable binomial logistic regression.

RESULTS

The cost of THA for avascular necrosis was 1.050 times (95% confidence interval 1.042 to 1.069; p < 0.001), or 5% greater than, the cost of THA for osteoarthritis; the cost of hip dysplasia was 1.132 times (95% CI 1.113 to 1.152; p < 0.001), or 13% greater; the cost of posttraumatic arthritis was 1.220 times (95% CI 1.193 to 1.246; p < 0.001), or 22% greater; and the cost of conversion arthroplasty was 1.403 times (95% CI 1.386 to 1.419; p < 0.001), or 40% greater. Importantly, none of these CIs overlap, indicating a discernable hierarchy of cost associated with these diagnostic indications for surgery. Rheumatoid arthritis was not associated with an increase in cost. Medical or surgical supplies and operating room charges represented the greatest increase in charges for each of the surgical indications examined, suggesting that increased use of medical and surgical supplies and operating room resources were the primary drivers of increased cost. All of the orthopaedic conditions we investigated demonstrated increased odds that a patient would experience a prolonged length of stay and be discharged to a nonhome location compared with patients undergoing THA for osteoarthritis. Avascular necrosis, posttraumatic arthritis, and conversion arthroplasty were also associated with increased intensive care unit use. Posttraumatic arthritis and conversion arthroplasty demonstrated the largest increase in resource use among all the orthopaedic conditions analyzed.

CONCLUSION

Compared with THA for osteoarthritis, THA for avascular necrosis, hip dysplasia, posttraumatic arthritis, and conversion arthroplasty is independently associated with stepwise increases in resource use. These cost increases are predominantly driven by greater requirements for medical and surgical supplies and operating room resources. Posttraumatic arthritis and conversion arthroplasty demonstrated substantially increased costs, which can result in financial losses in the setting of fixed prospective payments. These findings underscore the inability of MS-DRG coding to adequately reflect the wide range of surgical complexity and resource use of primary THAs. Hospitals performing a high volume of THAs for indications other than osteoarthritis should budget for an anticipated increase in costs, and orthopaedic surgeons should advocate for improved MS-DRG coding to appropriately reimburse hospitals for the financial and clinical risk of these surgeries.

LEVEL OF EVIDENCE

Level IV, economic and decision analysis.

Improvements in technology and the expanding role of time-driven, activity-based costing to increase value in healthcare provider organizations: a literature review

Objective

This study evaluated the influence of technology on accurately measuring costs using time-driven activity-based costing (TDABC) in healthcare provider organizations by identifying the most recent scientific evidence of how it contributed to increasing the value of surgical care.

Methods

This is a literature-based analysis that mainly used two data sources: first, the most recent systematic reviews that specifically evaluated TDABC studies in the surgical field and, second, all articles that mentioned the use of CareMeasurement (CM) software to implement TDABC, which started to be published after the publication of the systematic review. The articles from the systematic review were grouped as manually performed TDABC, while those using CM were grouped as technology-based studies of TDABC implementations. The analyses focused on evaluating the impact of using technology to apply TDABC. A general description was followed by three levels of information extraction: the number of cases included, the number of articles published per year, and the contributions of TDABC to achieve cost savings and other improvements.

Results

Fourteen studies using real-world patient-level data to evaluate costs comprised the manual group of studies. Thirteen studies that reported the use of CM comprised the technology-based group of articles. In the manual studies, the average number of cases included per study was 160, while in the technology-based studies, the average number of cases included was 4,767. Technology-based studies, on average, have a more comprehensive impact than manual ones in providing accurate cost information from larger samples.

Conclusion

TDABC studies supported by technologies such as CM register more cases, identify cost-saving opportunities, and are frequently used to support reimbursement strategies based on value. The findings suggest that using TDABC with the support of technology can increase healthcare value.

Cost Difference in Performing Total Knee Arthroplasty at Ambulatory Surgical Centers Compared With Hospital-Based Outpatient Departments: Observational Study

BACKGROUND

As total knee arthroplasty (TKA) further transitions toward an outpatient procedure, it becomes important to identify the resource utilization after TKAs at different outpatient facilities. The objective of this study was to determine the 90-day cost of patients who underwent TKAs at an ambulatory surgical center (ASC) or a hospital outpatient department (HOPD).

METHODS

An observational cohort study was conducted using the Marketscan database with patients who had a TKA at an ASC or HOPD between January 1st, 2019, and October 2nd, 2021. The primary outcome was cost in a 90-day period (including the day of surgery), with inpatient admissions and ED visits as secondary outcomes. Multivariable regression analyses were conducted, adjusting for patient characteristics.

RESULTS

The study population consisted of 47,261 patients with 7,874 ASC patients and 39,387 HOPD patients. 90-day costs for ASC patients were lower compared with HOPD patients ($35,634 ± 19,030 vs. $38,096 ± 24,389, P < 0.001). 90-day inpatient admission rates were lower for ASC than HOPD patients (2.5% vs. 4.8%, P < 0.001). 90-day ED visits for ASC patients were lesser compared with HOPD patients (8.9% vs. 12.7%, P < 0.001).

CONCLUSION

Patients with TKAs at an ASC had an overall lower cost, inpatient admissions, and ED visits over a 90-day period compared with HOPD patients. Future consideration for which outpatient facilities patients have their TKA at is necessary as TKAs shift toward bundle payments and outpatient procedures.

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.

Conversion THA With Concomitant Removal of Orthopaedic Hardware Should Be Reclassified as a Revision Surgery in the Medicare Severity Diagnosis-Related Group Coding Scheme: An Analysis of Cost and Resource Use

BACKGROUND

Conversion THA, which we defined for this study as THA with concomitant removal of preexisting orthopaedic hardware, has been associated with increased hospital costs and perioperative complications compared with primary THA. Yet, conversion THA is classified as a primary procedure under the Medicare Severity Diagnosis-Related Group coding scheme, and hospitals are reimbursed based on the resource use expected for a routine primary surgery. Prior authors have argued for conversion THA to be reclassified as a revision procedure. Although prior research has focused on comparisons between conversion THAs and primary arthroplasties, little is known about the resource use of conversion THA compared with that of revision THA.

QUESTIONS/PURPOSES

(1) Do inpatient hospital costs, estimated using cost-to-charge ratios, differ between conversion THA and revision THA? (2) Do the median length of stay, intensive care unit use, and likelihood of discharge to home differ between conversion and revision THA?

METHODS

This was a retrospective study of the Medicare Provider Analysis and Review Limited Data Set for 2019. A total of 713,535 primary and 74,791 revision THAs and TKAs were identified initially. Exclusion criteria then were applied; these included non-fee-for-service hospitalizations, nonelective admissions, and patients with missing data. Approximately 37% (263,545 of 713,535) of primary and 34% (25,530 of 74,791) of revision arthroplasties were excluded as non-fee-for-service hospitalizations. Two percent (13,159 of 713,535) of primaries and 11% (8159 of 74,791) of revisions were excluded because they were nonelective procedures. Among the remaining 436,831 primary and 41,102 revision procedures, 31% (136,748 of 436,831) were primary THAs and 36% (14,774 of 41,102) were revision THAs. Two percent (2761 of 136,748) of primary THAs involved intraoperative removal of hardware and were classified as conversion THAs. After claims with missing data were excluded, there were 2759 conversion THAs and 14,764 revision THAs available for analysis. Propensity scores were generated using a multivariate logistic regression model using the following variables as covariates: gender, age, race, van Walraven index, hospital setting, geography, hospital size, resident-to-bed ratio, and wage index. After matching, 2734 conversion THAs and 5294 revision THAs were available for analysis. The van Walraven index, which is a weighted score of patient preoperative comorbidities, was used to measure patient health status. Hospital costs were estimated by multiplying cost-to-charge ratios obtained from the 2019 Impact File by total hospital charges. This methodology enabled the use of a large national database to mitigate the random effects of individual hospitals' unique practices and patient populations. Multivariable regression was performed after matching to determine the independent effects of surgery type (that is, conversion versus revision THA) on hospital cost, length of stay greater than 2 days, intensive care unit use, and discharge to home.

RESULTS

There was no difference in the estimated hospital cost between conversion THA and revision THA (β = 0.96 [95% confidence interval 0.90 to 1.01]; p = 0.13). Patients undergoing conversion THA had increased odds of staying in the hospital for more than 2 days (odds ratio 1.12 [95% CI 1.03 to 1.23]; p = 0.01), increased odds of using the intensive care unit (OR 1.24 [95% CI 1.03 to 1.48]; p = 0.02), and decreased odds of being discharged to home (OR 0.74 [95% CI 0.67 to 0.80]; p < 0.001).

CONCLUSION

The inpatient hospital cost of conversion THA is no different from that of revision THA, although patients undergoing conversion surgery have modestly increased odds of prolonged length of stay, intensive care unit use, and discharge to a nonhome location. These findings support the conclusion that reclassification of conversion THA is warranted. Orthopaedic surgeons must advocate for the reclassification of conversion THA using data-backed evidence or run the risk that orthopaedic procedures will be given decreased reimbursement.

LEVEL OF EVIDENCE

Level III, economic and decision analysis.

Interspecialty Variation in Perioperative Health Care Resource Usage for Carpal Tunnel Release

BACKGROUND

We investigated whether any interspecialty variation exists, regarding perioperative health care resource usage, in carpal tunnel releases (CTRs).

METHODS

The 2010 to 2021 PearlDiver Mariner Database, an all-payer claims database, was queried to identify patients undergoing primary CTRs. Physician specialty IDs were used to identify the specialty of the surgeon-orthopedic versus plastic versus general surgery versus neurosurgery. Multivariate logistic regression analysis was used to identify whether there was any interspecialty variation between the use of health care resources.

RESULTS

A total of 908 671 patients undergoing CTRs were included, of which 556 339 (61.2%) were by orthopedic surgeons, 297 047 (32.7%) by plastic surgeons, 44 118 (4.9%) by neurosurgeons, and 11 257 (1.2%) by general surgeons. In comparison with orthopedic surgeons, patients treated by plastic surgeons were less likely to have received opioids, nonsteroidal anti-inflammatory drugs, oral steroids, and preoperative antibiotic prophylaxis but were more likely to have received steroid injections and electrodiagnostic studies (EDSs) preoperatively. Patients treated by neurosurgeons were more likely to have received preoperative opioids, gabapentin, oral steroids, preoperative antibiotic prophylaxis, EDSs, and formal preoperative physical/occupational therapy and less likely to have received steroid injections. Patients treated by general surgeons were less likely to receive oral steroids, steroid injections, EDSs, preoperative formal physical therapy, and preoperative antibiotic prophylaxis, but were more likely to be prescribed gabapentin.

CONCLUSIONS

There exists significant variation in perioperative health care resource usage for CTRs between specialties. Understanding reasons behind such variation would be paramount in minimizing differences in how care is practiced for elective hand procedures.

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.

The Impact of Sarcopenia Risk on Postoperative Walking Independence in Older Adults Undergoing Total Joint Arthroplasty

BACKGROUND AND PURPOSE

Sarcopenia is known to be associated with poor outcomes after arthroplasty; however, no study has reported the relationship between sarcopenia and postoperative walking independence. This study aimed to determine the impact of sarcopenia risk screening using the SARC-CalF questionnaire and calf circumference on the time to walk independently after total hip or knee arthroplasty in older patients.

METHODS

We included 599 nonobese patients aged 65 years and older who underwent unilateral and primary total hip or knee arthroplasty. Preoperative sarcopenia risk was assessed using the SARC-CalF or calf circumference. The outcome of this study was the time to independent walking after surgery; it was calculated as the number of days from the date of surgery to the date when the patient was able to walk independently. The association between preoperative sarcopenia risk and time to independent walking after surgery was analyzed using Kaplan-Meier curves and Cox proportional hazards models.

RESULTS

Among the 599 patients undergoing total joint arthroplasty, 175 (29.2%) were determined to be at risk of sarcopenia using SARC-CalF and 193 (32.2%) using calf circumference. The Kaplan-Meier curve showed that sarcopenia risk assessed by SARC-CalF or calf circumference was associated with a prolonged time to independent walking in patients undergoing hip arthroplasty (log-rank test, P < .001 and P < .001, respectively). In patients undergoing hip arthroplasty, the Cox proportional hazards model showed that SARC-CalF score of 11 points and greater or a calf circumference less than the cutoff was a risk factor for delayed time to independent walking (hazard ratios: 0.55 and 0.57, P < .001 and P = .001, respectively). There was no association between preoperative sarcopenia risk and postoperative time to independent walking in patients who underwent knee arthroplasty.

CONCLUSIONS

Sarcopenia screening tools, such as SARC-CalF or calf circumference, should be useful for planning postoperative rehabilitation in older adults scheduled for hip arthroplasty. However, the accuracy of SARC-CalF or calf circumference measurement in patients scheduled for knee arthroplasty may be low.

Comparison of trends of inpatient charges among primary and revision shoulder arthroplasty over a decade: a regional database study

Background

This study examined trends in inpatient charges for primary anatomic total shoulder arthroplasty (aTSA) and reverse total shoulder arthroplasty (rTSA), hemiarthroplasty (HA), and revision total shoulder arthroplasty (revTSA) over the past decade.

Methods

The New York Statewide Planning and Research Cooperative System was queried for patients undergoing primary aTSA, rTSA, HA, and revTSA from 2010 to 2020 using International Classification of Diseases procedure codes. The primary outcome measured was total charges per encounter. Secondary outcomes included accommodation and ancillary charges, charges covered by insurance, and facility volume. Ancillary charges were defined as fees for diagnostic and therapeutic services and accommodation charges were defined as fees associated with room and board. Subgroup analysis was performed to assess differences between high- and low-volume centers.

Results

During the study period, 46,044 shoulder arthroplasty cases were performed: 18,653 aTSA, 4002 HA, 19,253 rTSA, and 4136 revTSA. An exponential increase in rTSA (2428%) and considerable decrease in HA (83.9%) volumes were observed during this period. Total charges were the highest for rTSA and revTSA and the lowest for aTSA. Subgroup analysis of revTSA by indication revealed that total charges were the highest for periprosthetic fractures. For aTSA, rTSA, and HA, high-volume centers achieved significantly lower total charges compared to low-volume centers. Over the study period, total inpatient charges increased by 57.2%, 38.4%, 102.4%, and 68.4% for aTSA, rTSA, HA, and revTSA, outpacing the inflation rate of 18.7%.

Conclusion

Total inpatient charges for all arthroplasty types increased dramatically from 2010 to 2020, outpacing inflation rates, but high-volume centers demonstrated greater success at mitigating charge increases compared to low-volume centers.

PRIMARY TOTAL HIP ARTHROPLASTIES UNDER BRAZILIAN PUBLIC HEALTH SYSTEM (2012-2021)

Objectives

To describe the regional distribution of hospital admission authorizations (HAA), hospitalization costs (HC), the average length of stay (LOS), and mortality rates (MR) related to primary total hip arthroplasties (THA) funded by the Brazilian Health Unic System (SUS) from 2012 to 2021.

Methods

Descriptive cross-sectional study using secondary data of public domain obtained from the Department of Informatics of SUS (DATASUS) database website.

Results

A total of 125,463 HAA were released with HC of 552,218,181.04 BRL in the evaluated period. The average LOS was of 6.8 days. MR was 1.62%.

Conclusion

The regional distribution of HAA was 65,756 (52%) in the Southeast; 33,837 (27%) in the South; 14,882 (12%) in the Northeast; 9,364 (8%) in Midwest; and 1,624 (1%) in North - in 2020 there was a sharp decrease of the released HAA, probably due to the COVID-19 pandemic. HC was 293,474,673.20 BRL in the Southeast; 144,794,843.11 BRL in the South; 61,751,644.36 BRL in the Northeast; 45,724,353.80 BRL in the Midwest; and 6,472,666.57 BRL in the North. The average LOS was 6.7 in the Southeast; 5.3 in the South; 9.2 in the Northeast; 7.6 in the Midwest; and, 13.6 in the North. MR was as follows: Southeast=1.88%; South=1.07%; Northeast=1.83%; Midwest=1.44%; and North=1.47%. Evidence Level III; Retrospective Comparative Study .

Length of stay and inpatient charges of total knee arthroplasty in China: analysis of a national database

BACKGROUND

There are limited data on the resource utilization of total knee arthroplasty (TKA) in China. This study aimed to examine the length of stay (LOS) and inpatient charges of TKA in China, and to investigate their determinants.

METHODS

We included patients undergoing primary TKA in the Hospital Quality Monitoring System in China between 2013 and 2019. LOS and inpatient charges were obtained, and their associated factors were further assessed using multivariable linear regression.

RESULTS

A total of 184,363 TKAs were included. The LOS decreased from 10.8 days in 2013 to 9.3 days in 2019. The admission-to-surgery interval decreased from 4.6 to 4.2 days. The mean inpatient charges were 61,208.3 Chinese Yuan. Inpatient charges reached a peak in 2016, after which a gradual decrease was observed. Implant and material charges accounted for a dominating percentage, but they exhibited a downward trend, whereas labor-related charges gradually increased. Single marital status, non-osteoarthritis indication, and comorbidity were associated with longer LOS and higher inpatient charges. Female sex and younger age were associated with higher inpatient charges. There were apparent varieties of LOS and inpatient charges among provincial or non-provincial hospitals, hospitals with various TKA volume, or in different geographic regions.

CONCLUSIONS

The LOS following TKA in China appeared to be long, but it was shortened during the time period of 2013 to 2019. The inpatient charges dominated by implant and material charges exhibited a downward trend. However, there were apparent sociodemographic and hospital-related discrepancies of resource utilization. The observed statistics can lead to more efficient resource utilization of TKA in China.

Mark-Up Trends in Contemporary Medicare Primary and Revision Total Joint Arthroplasty

BACKGROUND

Understanding mark-up ratios (MRs), the ratio between a healthcare institution's submitted charge and the Medicare payment received, for high-volume orthopaedic procedures is imperative to inform policy about price transparency and reducing surprise billing. This analysis examined the MRs for primary and revision total hip and knee arthroplasty (THA and TKA) services to Medicare beneficiaries between 2013 and 2019 across healthcare settings and geographic regions.

METHODS

A large dataset was queried for all THA and TKA procedures performed by orthopaedic surgeons between 2013 and 2019, using Healthcare Common Procedure Coding System (HCPCS) codes for the most frequently used services. Yearly MRs, service counts, average submitted charges, average allowed payments, and average Medicare payments were analyzed. Trends in MRs were assessed. We evaluated 9 THA HCPCS codes, averaging 159,297 procedures a year provided by a mean of 5,330 surgeons. We evaluated 6 TKA HCPCS codes, averaging 290,244 procedures a year provided by a mean of 7,308 surgeons.

RESULTS

For knee arthroplasty procedures, a decrease was noted for HCPCS code 27438 (patellar arthroplasty with prosthesis) over the study period (8.30 to 6.62; P = .016) and HCPCS code 27447 (TKA) had the highest median (interquartile range [IQR]) MR (4.73 [3.64 to 6.30]). For revision knee procedures, the highest median (IQR) MR was for HCPCS code 27488 (removal of knee prosthesis; 6.12 [3.83-8.22]). While no trends were noted for both primary and revision hip arthroplasty, median (IQR) MRs in 2019 for primary hip procedures ranged from 3.83 (hemiarthroplasty) to 5.06 (conversion of previous hip surgery to THA) and HCPCS code 27130 (total hip arthroplasty) had a median (IQR) MR of 4.66 (3.58-6.44). For revision hip procedures, MRs ranged from 3.79 (open treatment of femoral fracture or prosthetic arthroplasty) to 6.10 (revision of THA femoral component). Wisconsin had the highest median MR by state (>9) for primary knee, revision knee, and primary hip procedures.

CONCLUSION

The MRs for primary and revision THA and TKA procedures were strikingly high, as compared to nonorthopaedic procedures. These findings represent high levels of excess charges billed, which may pose serious financial burdens to patients and must be taken into consideration in future policy discussions to avoid price inflation.

High-volume Arthroplasty Centers Are Associated With Lower Hospital Costs When Performing Primary THA and TKA: A Database Study of 288,909 Medicare Claims for Procedures Performed in 2019

BACKGROUND

With bundled payments and alternative reimbursement models expanding in scope and scale, reimbursements to hospitals are declining in value. As a result, cost reduction at the hospital level is paramount for the sustainability of profitable inpatient arthroplasty practices. Although multiple prior studies have investigated cost variation in arthroplasty surgery, it is unknown whether contemporary inpatient arthroplasty practices benefit from economies of scale after accounting for hospital characteristics and patient selection factors. Quantifying the independent effects of volume-based cost variation may be important for guiding future value-based health reform.

QUESTIONS/PURPOSES

We performed this study to (1) determine whether the cost incurred by hospitals for performing primary inpatient THA and TKA is independently associated with hospital volume and (2) establish whether length of stay and discharge to home are associated with hospital volume.

METHODS

The primary data source for this study was the Medicare Provider Analysis and Review Limited Data Set, which includes claims data for 100% of inpatient Medicare hospitalizations. We included patients undergoing primary elective inpatient THA and TKA in 2019. Exclusion criteria included non-Inpatient Prospective Payment System hospitalizations, nonelective admissions, bilateral procedures, and patients with cancer of the pelvis or lower extremities. A total of 500,658 arthroplasties were performed across 2762 hospitals for 492,262 Medicare beneficiaries during the study period; 59% (288,909 of 492,262) of procedures were analyzed after the exclusion criteria were applied. Most exclusions (37% [182,733 of 492,262]) were because of non-Inpatient Prospective Payment System hospitalizations. Among the study group, 87% (251,996 of 288,909) of procedures were in patients who were 65 to 84 years old, 88% (255,415 of 288,909) were performed in patients who were White, and 63% (180,688 of 288,909) were in patients who were women. Elixhauser comorbidities and van Walraven indices were calculated as measures of patient health status. Hospital costs were estimated by multiplying cost-to-charge ratios obtained from the 2019 Impact File by total hospital charges. This methodology enabled us to use the large Medicare Provider Analysis and Review database, which helped decrease the influence of random cost variation through the law of large numbers. Hospital volumes were calculated by stratifying claims by national provider identification number and counting the number of claims per national provider identification number. The data were then grouped into bins of increasing hospital volume to more easily compare larger-volume and smaller-volume centers. The relationship between hospital costs and volume was analyzed using univariable and multivariable generalized linear models. Results are reported as exponential coefficients, which can be interpreted as relative differences in cost. The impact of surgical volume on length of stay and discharge to home was assessed using binary logistic regression, considering the nested structure of the data, and results are reported as odds ratios (OR).

RESULTS

Hospital cost and mean length of stay decreased, while rates of discharge to home increased with increasing hospital volume. After controlling for potential confounding variables such as patient demographics, health status, and geographic location, we found that inpatient arthroplasty costs at hospitals with 10 or fewer, 11 to 100, and 101 to 200 procedures annually were 1.32 (95% confidence interval [CI] 1.30 to 1.34; p < 0.001), 1.17 (95% CI 1.17 to 1.17; p < 0.001), and 1.10 (95% CI 1.10 to 1.10; p < 0.001) times greater than those of hospitals with 201 or more inpatient procedures annually. In addition, patients treated at smaller-volume hospitals had increased odds of experiencing a length of stay longer than 2 days (OR 1.25 to 3.44 [95% CI 1.10 to 4.03]; p < 0.001) and decreased odds of being discharged to home (OR 0.34 to 0.78 [95% CI 0.29 to 0.86]; p < 0.001).

CONCLUSION

Higher-volume hospitals incur lower costs, shorter lengths of stay, and higher rates of discharge to home than lower-volume hospitals when performing inpatient THA and TKA. These findings suggest that small and medium-sized regional hospitals are disproportionately impacted by declining reimbursement and may necessitate special treatment to remain viable as bundled payment models continue to erode hospital payments. Further research is also warranted to identify the key drivers of this volume-based cost variation, which may facilitate quality improvement initiatives at the hospital and policy levels.

Trends in Revision Total Hip Arthroplasty Cost, Revenue, and Contribution Margin 2011-2021

INTRODUCTION

Revision total hip arthroplasty (rTHA) is a costly procedure and its prevalence has been steadily increasing over time. This study aimed to examine trends in hospital cost, revenue, and contribution margin (CM) in patients undergoing rTHA.

METHODS

We retrospectively reviewed all patients who underwent rTHA from June 2011 to May 2021 at our institution. Patients were stratified into groups based on insurance coverage: Medicare, government-managed or Medicaid (GMM), or commercial insurance. Patient demographics, revenue (any payment the hospital received), direct cost (any cost associated with the surgery and hospitalization), total cost (the sum of direct and indirect costs), and CM (The difference between revenue and direct cost) were collected. Changes over time as a percentage of 2011 numbers were analyzed. Linear regression analyses were used to determine overall trend significance. Of the 1,613 patients identified, 661 were covered by Medicare, 449 by GMM, and 503 by commercial insurance plans.

RESULTS

Medicare patients exhibited a significant upward trend in revenue (P<0.001), total cost (P=0.004), direct cost (P<0.001), and an overall downward trend in CM (P=0.037), with CM for these patients falling to 72.1% of 2011 values by 2021.

CONCLUSION

In the Medicare population, reimbursement for rTHA has not matched increases in cost, leading to considerable reductions in CM. These trends affect the ability of hospitals to cover indirect costs, threatening access to care for patients who require this necessary procedure. Reimbursement models for rTHA should be reconsidered to ensure the financial feasibility of these procedures for all patient populations.

A Multi-Disciplinary Review of Time-Driven Activity-Based Costing: Practical Considerations for Spine Surgery

STUDY DESIGN

A multi-disciplinary review.

OBJECTIVES

To provide a roadmap for implementing time-driven activity-based costing (TDABC) for spine surgery. This is achieved by organizing and scrutinizing publications in the spine, neurosurgical, and orthopedic literature which utilize TDABC and related methodologies.

METHODS

PubMed and Google Scholar were searched for relevant articles. The articles were selected by two independent researchers. After article selection, data was extracted and summarized into research domains. Preferred reporting items for systematic reviews and meta-analyses (PRISMA) systematic review process was followed.

RESULTS

Of the 524 articles screened, thirty-five articles met the inclusion criteria. Each included article was examined and reviewed to define the primary research question and objective. Comparing different procedures was the most common primary objective. Direct observation along with one other strategy (surveys, interviews, surgical database, or EMR) was most commonly employed during process map development. Across all surgical subspecialties (spine, neurologic, and orthopedic surgery), costs were divided into direct cost, indirect cost, cost to patient, and total costs. The most commonly calculated direct costs included personnel and supply costs. Facility costs, hospital overhead costs, and utilities were the most commonly calculated indirect costs. Transportation costs and parental lost wages were considered when calculating cost to patient. The total cost was a sum of direct costs, indirect costs, and costs to the patient.

CONCLUSION

TDABC provides a common platform to accurately estimate costs of care delivery. Institutions embarking on TDABC for spine surgery should consider the breadth of methodologies highlighted in this review to determine which type of calculations are appropriate for their practice.

The Markup on Orthopaedic Services: An Analysis of 2014-2019 Medicare Data and the Potential for Surprise Billing

BACKGROUND

Markups on charges for medical services have the potential to result in "surprise billing," especially for out-of-network and uninsured patients. Although previously analyzed in other surgical subspecialties, the distribution and level of cost-to-charge ratios (CCRs) for orthopaedic services have yet to be studied. Therefore, our analysis sought to evaluate the CCRs for orthopaedic surgery services provided to Medicare beneficiaries throughout the United States.

METHODS

Orthopaedic services provided to Medicare Part B beneficiaries between 2014 and 2019 were identified in the Physician & Other Practitioners database of the Centers for Medicare & Medicaid Services (CMS). CCRs, representing the ratio between the actual payment provided by CMS and the charge submitted by the provider, were calculated for each service. Descriptive statistics were calculated for CCRs at the national, state, and service-code levels. The coefficient of variation (CoV) was utilized to evaluate variability in CCRs across services and states. Additionally, Mann-Kendall tests were performed to evaluate trends in CCRs for included services over the time frame.

RESULTS

Our analysis included an annual mean of 47,247,928 services provided by a mean of 23,185 orthopaedic surgeons over the study period. In the non-facility setting, there was a decrease in median CCRs for orthopaedic surgery services (0.29 to 0.27; p = 0.024). No changes were demonstrated for facility-based services. Service codes related to trigger finger procedures (0.18 to 0.17; p = 0.004), physical therapy (0.40 to 0.36; p = 0.035), and new patient visits (0.52 to 0.46; p = 0.035) demonstrated significant decreases in median CCRs. Only shoulder arthroscopy demonstrated a significant increase in median CCR (0.09 to 0.10; p = 0.003). High dispersion in CCRs was demonstrated for 16 (80%) of the 20 evaluated services. Wide variations in CCRs were demonstrated across individual states (median, 0.57; interquartile range width, 0.53).

CONCLUSIONS

Our analysis demonstrated low and variable CCRs for commonly performed orthopaedic services in the U.S. These findings serve to inform and help improve related price transparency policies. Additionally, our analysis encourages increased efforts at preventing these low CCRs from limiting care in vulnerable populations.

Similar Value Demonstrated in the Short-Term Outcomes of Superior Capsular Reconstruction and Reverse Shoulder Arthroplasty for Massive Rotator Cuff Tears

Purpose

The purposes of this study were to investigate the difference in value (benefit to cost ratio) of dermal allograft superior capsular reconstruction (SCR) versus reverse total shoulder arthroplasty (rTSA) for the treatment of massive rotator cuff tears (MRCTs) without arthritis; to compare the patient populations selected for the operations and report pre- and postoperative functional data; and to understand other characteristics of the 2 operations, including operating time, use of institutional resources, and complications.

Methods

A retrospective, single-institution analysis during the study period 2014-2019 with MRCT treated with SCR or rTSA by 2 surgeons with complete institutional cost data and minimum 1-year clinical follow-up with American Shoulder and Elbow Surgeons (ASES) score. Value was defined as ΔASES/(total direct costs/$10,000).

Results

Thirty patients underwent rTSA and 126 patients SCR during the study period with significant differences noted in patient demographics and tear characteristics between the groups (patients who underwent rTSA were older, less male, had more pseudoparalysis, had greater Hamada and Goutallier scores, and had more proximal humeral migration). Value was 25 and 29 (ΔASES/$10,000) for rTSA and SCR, respectively (P = .7). The total costs of rTSA and SCR were $16,337 and $12,763, respectively (P = .7). Both groups experienced substantial improvements in ASES scores: 42 for rTSA vs 37 for SCR (P = .6). The operative time for SCR was much longer (204 vs 108 minutes, P < .001) but complication rate lower (3% vs 13%, P = .02) versus rTSA.

Conclusions

In a single institutional analysis of the treatment of MRCT without arthritis, rTSA and SCR demonstrated similar value; however, the value calculation is highly dependent on institution specific variables and duration of follow-up. The operating surgeons demonstrated different indications in selecting patients for each operation. rTSA had an advantage over SCR in shorter operative time, whereas SCR demonstrated a lower complication rate. Both SCR and rTSA are demonstrated to be effective treatments for MRCT at short-term follow-up.

Level of Evidence

III, retrospective comparative study.

Inconsistent Surgical Implant Documentation: A Case Study in Total Knee and Hip Arthroplasty

Value-based care initiatives require accurate quantification of resource utilization. This study explores hospital resource documentation performance for total knee and hip arthroplasty (TKA, THA) implants and how this may differ between hospitals. This retrospective study utilized the Premier discharge database, years 2006 to 2020. TKA/THA cases were categorized into 5 tiers based upon the completeness of implant component documentation: Platinum, Gold, Silver, Bronze, Poor. Correlation between TKA and THA documentation performance (per-hospital percentage of Platinum cases) was assessed. Logistic regression analyses measured the association between hospital characteristics (region, teaching status, bed size, urban/rural) and satisfactory documentation. TKA/THA implant documentation performance was compared to documentation for endovascular stent procedures. Individual hospitals tended to have very complete (Platinum) or very incomplete (Poor) documentation for both TKA and THA. TKA and THA documentation performance were correlated (correlation coefficient = .70). Teaching hospitals were less likely to have satisfactory documentation for both TKA (P = .002) and THA (P = .029). Documentation for endovascular stent procedures was superior compared to TKA/THA. Hospitals' TKA and THA-related implant documentation performance is generally either very proficient or very poor, in contrast with often well-documented endovascular stent procedures. Hospital characteristics, other than teaching status, do not appear to impact TKA/THA documentation completeness.

Prediction of total healthcare cost following total shoulder arthroplasty utilizing machine learning

BACKGROUND

Given the increase in demand in treatment of glenohumeral arthritis with anatomic total (aTSA) and reverse shoulder arthroplasty (RTSA), it is imperative to improve quality of patient care while controlling costs as private and federal insurers continue its gradual transition toward bundled payment models. Big data analytics with machine learning shows promise in predicting health care costs. This is significant as cost prediction may help control cost by enabling health care systems to appropriately allocate resources that help mitigate the cause of increased cost.

METHODS

The Nationwide Readmissions Database (NRD) was accessed in 2018. The database was queried for all primary aTSA and RTSA by International Classification of Diseases, Tenth Revision (ICD-10) procedure codes: 0RRJ0JZ and 0RRK0JZ for aTSA and 0RRK00Z and 0RRJ00Z for RTSA. Procedures were categorized by diagnoses: osteoarthritis (OA), rheumatoid arthritis (RA), avascular necrosis (AVN), fracture, and rotator cuff arthropathy (RCA). Costs were calculated by utilizing the total hospital charge and each hospital's cost-to-charge ratio. Hospital characteristics were included, such as volume of procedures performed by the respective hospital for the calendar year and wage index, which represents the relative average hospital wage for the respective geographic area. Unplanned readmissions within 90 days were calculated using unique patient identifiers, and cost of readmissions was added to the total admission cost to represent the short-term perioperative health care cost. Machine learning algorithms were used to predict patients with immediate postoperative admission costs greater than 1 standard deviation from the mean, and readmissions.

RESULTS

A total of 49,354 patients were isolated for analysis, with an average patient age of 69.9 ± 9.6 years. The average perioperative cost of care was $18,843 ± $10,165. In total, there were 4279 all-cause readmissions, resulting in an average cost of $13,871.00 ± $14,301.06 per readmission. Wage index, hospital volume, patient age, readmissions, and diagnosis-related group severity were the factors most correlated with the total cost of care. The logistic regression and random forest algorithms were equivalent in predicting the total cost of care (area under the receiver operating characteristic curve = 0.83).

CONCLUSION

After shoulder arthroplasty, there is significant variability in cumulative hospital costs, and this is largely affected by readmissions. Hospital characteristics, such as geographic area and volume, are key determinants of overall health care cost. When accounting for this, machine learning algorithms may predict cases with high likelihood of increased resource utilization and/or readmission.

Trends in Revenue, Cost, and Contribution Margin for Total Joint Arthroplasty 2011-2021

BACKGROUND

Regulatory change has created a growing demand to decrease the hospital costs associated with primary total joint arthroplasty (TJA). Concurrently, the removal of lower extremity TJA from the in-patient only list has affected hospital reimbursement. The purpose of this study is to investigate trends in hospital revenue versus costs in primary TJA.

METHODS

We retrospectively reviewed all patients who underwent primary TJA from June 2011 to May 2021 at our institution. Patient demographics, revenue, total cost, direct cost, and contribution margin were collected. Changes over time as a percentage of 2011 numbers were analyzed. Linear regression analysis was used to determine overall trend significance and develop projection models.

RESULTS

Total knee arthroplasty (TKA) insured by government-managed/Medicaid (GMM) plans showed a significant upward trend (P = .013) in total costs. Direct costs of TKA across all insurance providers (P = .001 and P < .001) and total hip arthroplasty (THA) for Medicare (P = .009) and GMM (P = .001) plans demonstrated significant upward trends. Despite this, 2011-2021 modeling found no significant change in contribution margin for TKA and THA covered under all insurance plans. However, models based on 2018-2021 financial data demonstrated a significant downward trend in contribution margin across Medicare (P < .001) and GMM (P < .001) insurers for both TKA and THA.

CONCLUSION

Physician-led innovation in cost-saving strategies has maintained contribution margin over the past decade. However, the increase in direct costs seen over the past few years could lead to negative contribution margins over time, if further efficiency and cost-saving measures are not developed.

LEVEL III EVIDENCE

Retrospective Cohort Study.

Cost and Cost Driver Analysis of Anterior Cruciate Ligament Reconstruction Using Time-Driven Activity-Based Costing: Bone-Tendon-Bone Autograft Versus Hamstring Autograft

As health care transitions toward value-based care, orthopaedics has started to implement time-driven activity-based costing (TDABC) to understand costs and cost drivers. TDABC has not previously been used to study cost drivers in anterior cruciate ligament reconstruction (ACLR). The purpose of this study was to use TDABC to (1) calculate bone-tendon-bone (BTB) and hamstring ACLR total costs of care and (2) evaluate the impact of graft choice and other factors on ACLR costs.

Methods

Data were collected from electronic medical records for primary ACLR from the institutional patient-reported outcome registry between 2009 and 2016 in 1 ambulatory surgery center. Patients receiving allograft, revision ACLR, or concomitant meniscal repair or ligament reconstruction were excluded. The total cost of care was determined using TDABC. Multivariate regression analysis was conducted between ACLR cost and group characteristics.

Results

A total of 328 patients were included; 211 (64.3%) received BTB autograft and 117 (35.7%) received hamstring autograft. The mean cost was $2,865.01 ± $263.45 (95% confidence interval: $2,829.26, $2,900.77) for BTB ACLR versus $3,377.44 ± $320.12 ($3,318.82, $3,436.05) for hamstring ACLR (p < 0.001). Operative time was 103.1 ± 25.1 (99.7, 106.5) minutes for BTB ACLR versus 113.1 ± 27.9 (108.0, 118.2) minutes for hamstring ACLR (p = 0.001). The total implant cost was $270.32 ± $97.08 ($257.15, $283.50) for BTB ACLR versus $587.36 ± $108.78 ($567.44, $607.28) for hamstring ACLR (p < 0.001). Hamstring graft (p = 0.006) and suspensory fixation on the femoral side (p = 0.011) were associated with increased costs.

Conclusions

The mean cost of care and operative time for BTB autograft ACLR are less than those for hamstring autograft ACLR. Operative time, implant choice, and graft choice were identified as modifiable cost drivers that can empower surgeons to manage primary ACLR costs while maximizing the value of the procedure.

Level of Evidence

Economic and Decision Analysis Level IV. See Instructions for Authors for a complete description of levels of evidence.

Editorial Commentary: Saving Cost in Orthopaedics While Preserving Patient Experience and Outcomes: We Can Have It All

Healthcare costs in the United States are the highest in the world and continue to increase unsustainably. As a result, cost-cutting measures are paramount. Bundled payments are a primary method to decrease healthcare use, and they are increasingly prominent in orthopaedic surgical care. Bundled payments require an accurate assessment of the cost of a procedure, which may be determined more reliably and feasibly than previously with time-driven activity-based costing. Time-driven activity-based costing identifies the cost of various stages of care, which allows cost-containment strategies to target the most expensive stages. Amidst the warranted focus on cost reduction, we must maintain a strong focus on the patient experience and patient outcomes. For example, reducing surgeon and staff time with the patient could negatively impact patient care, yet increasing efficiency in the operating room and perioperative setting could decrease the relative cost of staff without harming the patient experience. Other realms, such as implant and administrative costs, are important focuses that are less likely to directly hamper patient care. Controlling cost in the U.S. healthcare system will require a wide-reaching approach with contributions from all parties. As we work toward a more financially sustainable system, we must be sure to preserve excellent patient experience and outcomes.

Telehealth Visits After Shoulder Surgery: Higher Patient Satisfaction and Lower Costs

Introduction:

Studies comparing the cost of in-person and virtual care are lacking. The goal of this study was threefold (1) to compare the cost of telemedicine visits with in-person clinic visits after common shoulder surgeries, (2) to measure the safety, and (3) to evaluate patient experience with telemedicine visits.

Methods:

The In-Person Visit cohort (N = 25) and the telemedicine cohort (Virtual Visit cohort, N = 24) were selected from patients undergoing routine follow-up of common shoulder procedures. Time-driven activity-based costing was used to determine costs associated with each episode of care. Patient complications, satisfaction, convenience, and technical difficulties associated with telehealth were recorded.

Results:

The average Virtual Visit was 54.1% less costly and 87.8% shorter than the In-Person Visit ($49 versus $107 per patient, 8.6 versus 70.1 minutes per patient, P < 0.01, respectively). One complication was missed in the Virtual Visit cohort, later captured by an in-person visit. All patients in the Virtual Visit cohort reported that the virtual visit was safe and convenient and showed high levels of satisfaction.

Discussion:

Virtual visits for postoperative care of patients undergoing shoulder surgery are associated with decreased costs and high ratings of convenience and satisfaction. Postoperative complications may be more challenging to diagnose virtually.

Variation in the Profit Margin for Different Types of Total Joint Arthroplasty

BACKGROUND

As health care shifts to a value-based model with bundled-payment methods, it is important to understand the costs and reimbursements of arthroplasty procedures that represent the largest expenditure of Medicare. The aim of the present study was to characterize the variation in (1) total hospital costs, (2) reimbursement, and (3) profit margin for different arthroplasty procedures.

METHODS

The total hospital costs of total knee arthroplasty (TKA), total hip arthroplasty (THA), anatomic total shoulder arthroplasty (TSA), reverse shoulder arthroplasty (RSA), and total ankle arthroplasty (TAA) were calculated with use of time-driven activity-based costing at an orthopaedic institution from 2018 to 2020. The average reimbursement for each type of procedure was determined. Profit margin, defined as the reimbursement profit after direct costs, was calculated by deducting the average time-drive activity-based total hospital costs from the reimbursement value. Multivariate analyses were performed to evaluate the associations between costs, reimbursement, and profit margins.

RESULTS

There were 13,545 arthroplasty procedures analyzed for this study, including 6,636 TKAs, 5,902 THAs, 346 TSAs, 577 RSAs, and 84 TAAs. Costs and reimbursement were highest for TAA. THA and TKA resulted in the highest profit margins, whereas RSA resulted in the lowest. The strongest associations with profit margin were private insurance (0.46547), age (-0.22732), and implant cost (-0.19240).

CONCLUSIONS

THA and TKA had greater profit margins overall than TAA and upper-extremity arthroplasty in general. Profit margins for RSA, TSA, and TAA were all at least 28% lower than those for TKA or THA. Lower-volume arthroplasty procedures were associated with decreased profit margins. Study findings suggest that optimizing implant costs and length of stay are important for sustaining institutional fiscal health when performing shoulder and ankle arthroplasty surgery.

Preoperative patients' health decrease moderately, while hospital costs increase for hip and knee replacement due to the first COVID-19 lockdown in Germany

PURPOSE

The purpose of this study was a comparison between osteoarthritis patients with primary hip and knee replacements before, during and after the first COVID-19 lockdown in Germany. Patients' preoperative health status is assumed to decrease, owing to delayed surgeries. Costs for patients with osteoarthritis were assumed to increase, for example, due to higher prices for protective equipment. Hence, a comparison of patients treated before, during and after the first lockdown is conducted.

METHODS

In total, 852 patients with primary hip or knee replacement were included from one hospital in Germany. Preoperative health status was measured with the WOMAC Score and the EQ-5D-5L. Hospital unit costs were calculated using a standardised cost calculation. Kruskal-Wallis tests and Chi-squared tests were applied for the statistical analyses.

RESULTS

The mean of the preoperative WOMAC Score was slightly higher (p < 0.01) for patients before the first lockdown, compared with patients afterwards. Means of the EQ-5D-5L were not significantly different regarding the lockdown status (NS). Length of stay was significantly reduced by approximately 1 day (p < 0.001). Total inpatient hospital unit costs per patient and per day were significantly higher for patients during and after the first lockdown (p < 0.001).

CONCLUSION

Preoperative health, measured with the WOMAC Score, worsened slightly for patients after the first lockdown compared with patients undergoing surgery before COVID-19. Preoperative health, measured using the EQ-5D-5L, was unaffected. Inpatient hospital unit costs increased significantly with the COVID-19 pandemic.

LEVEL OF EVIDENCE

Retrospective cohort study, III.

Total Knee Arthroplasty Hospital Costs by Time-Driven Activity-Based Costing: Robotic vs Conventional

Background

Total knee arthroplasty (TKA) represents a major national health expenditure. The last decade has seen a surge in robotic-assisted TKA (roTKA); however, literature on the costs of roTKA as compared to conventional TKA (cTKA) is limited. The purpose of this study was to assess the costs associated with roTKA as compared to cTKA.

Methods

This was a retrospective cohort cost-analysis study of patients undergoing primary, elective roTKA or cTKA from July 2020 to March 2021. Time-driven activity-based costing (TDABC) was used to determine granular costs. Patient demographics, medical/surgical details, and costs were compared.

Results

A total of 2058 TKAs were analyzed (1795 cTKAs and 263 roTKAs). roTKA patients were more often male (50.2% vs 42.3%; P = .016), and discharged home (98.5% vs 93.7%; P = .017), and had longer operating room (OR) time (144.6 vs 130.9 minutes; P < .0001), and lower length of stay (LOS) (1.8 vs 2.1 days; P < .0001). roTKA costs were 2.17× greater for supplies excluding implant (P < .0001), 1.18× for total supplies (P < .0001), 1.12× for OR personnel (P < .0001), and 1.05× for total personnel (P = .0001). Implant costs were similar (P = .076), but 0.98× cheaper for post-anesthesia care unit personnel (P = .018) and 0.84× for inpatient personnel (P < .0001). Overall hospital costs for roTKA were 1.10× more than cTKA (P < .0001).

Conclusion

roTKA had higher total hospital costs than cTKA. Despite a lower LOS, the longer OR time with higher supply and personnel costs resulted in a costlier procedure. Understanding the costs of roTKA is essential when considering the value (ie, outcomes per dollars spent) of this modern technology.

The Cost of Hip and Knee Revision Arthroplasty by Diagnosis-Related Groups: Comparing Time-Driven Activity-Based Costing and Traditional Accounting

BACKGROUND

Traditional hospital cost accounting (TA) has innate disadvantages that limit the ability to meaningfully measure care pathways and quality improvement. Time-driven activity-based costing (TDABC) allows a meticulous account of costs in primary total joint arthroplasty (TJA). However, differences between TA and TDABC have not been examined in revision hip and knee TJA (rTJA). We aimed to compare total costs of rTJA by the diagnosis-related group (DRG), measured by TDABC vs TA.

METHODS

Overall costs were calculated for rTJA care cycles by DRG for 2 years of financial data (2018-2019) at our single-specialty orthopedic institution using TA and TDABC. Costs derived from TDABC, based on time and resources used, were compared with costs derived from TA based on historical costs. Proportions of implant and nonimplant costs were measured to total TA costs.

RESULTS

Seven hundred ninety-three rTJAs were included in this study, with TA methodology resulting in higher cost estimates. The total cost per DRG 468, rTJA with no comorbidities or complications (CC), DRG 467, rTJA with CC, and DRG 466, rTJA with major CC, estimated by TDABC was 69%, 67%, and 49% of the estimation by TA, respectively. Implant and nonimplant costs represented different proportions between methodologies.

CONCLUSION

Considerable differences exist, as TA estimations were 31%-51% higher than TDABC. The true cost is likely a value between the estimations, but TDABC presents granular and patient-specific cost data. TDABC for rTJA provides valuable bottom-up information on cost centers in the care pathway and, with targeted interventions, may lead to a more optimal delivery of value-based health care.

Financial Burden of Revision Hip and Knee Arthroplasty at an Orthopedic Specialty Hospital: Higher Costs and Unequal Reimbursements

BACKGROUND

As demand for primary total joint arthroplasty (TJA) continues to grow, a proportionate increase in revision TJA (rTJA) is expected. It is essential to understand costs and reimbursement of rTJA as our country moves to bundled payment models. We aimed (1) to characterize implant and total hospital costs, (2) assess reimbursement, and (3) determine revenue for rTJA in comparison with primary TJA.

METHODS

The average implant and total hospital cost of all primary and rTJA procedures by diagnosis-related group (DRG) was calculated using time-driven activity-based costing at an orthopedic hospital from 2018 to 2020. Average reimbursement and payer type were assessed by DRG. Revenue was calculated by deducting average time-driven activity-based costing total costs from reimbursement.

RESULTS

13,946 arthroplasties were included in the study. Implant cost comprised 55.8% of total hospital costs for rTJA DRG 468, compared with 43.6% of total hospital costs for primary TJA DRG 470. Total hospital costs for DRG 468 were 61.1% more than DRG 470. Reimbursement for rTJA was 1.23x more than primary TJA. Private payers paid 23.2% more than Medicare for rTJA. Margin for DRG 468 was 1.5% less than primary DRG 470.

CONCLUSION

rTJA requires more hospital resources and costs than primaries, yet hospital reimbursement may be inadequate with the additional expenditures necessary to provide optimal care. If hospitals cannot perform revision services under the current reimbursement model, patient access may be limited. Implant costs are a major contributor to overall rTJA cost. Strategies are needed to reduce revision implant costs to improve value of care.

LEVEL OF EVIDENCE

Level III, economic and decision analysis.

Variation in the value of total shoulder arthroplasty

BACKGROUND

There is growing interest in maximizing value for patients undergoing discretionary orthopedic surgery but little data to guide improvement efforts. Integrating patient-reported outcomes with time-driven activity-based costing, we explored patient-level variation in the value of total shoulder arthroplasty (TSA) and characterized factors that contribute to this variation.

METHODS

Using our institutional registry, we identified 239 patients undergoing elective primary TSA (anatomic or reverse) between 2016-2017 with minimum 2-year follow-up. We calculated value as 2-year postoperative American Shoulder and Elbow Surgeons Standardized Shoulder Assessment Form (ASES) scores divided by hospitalization time-driven activity-based costs. This number was multiplied by a constant to set the minimum value of TSA to 100. Multivariable linear regression modeling was performed to characterize factors underlying variation in value.

RESULTS

The value of shoulder arthroplasty ranged from 100 to 680, resulting in a variation of 580%. Reverse shoulder arthroplasty was associated with decreased value (79-point decrease vs. anatomic arthroplasty; P < .001; partial R² = 0.089), as were prior ipsilateral shoulder surgery (38-point decrease; P = .002; partial R² = 0.031), more self-reported allergies (4-point decrease per 1-unit increase; P = .029; partial R² = 0.015), diabetes (33-point decrease; P = .045; partial R² = 0.013), and lower preoperative ASES score (0.7-point increase per 1-unit increase; P = .045; partial R² = 0.012).

CONCLUSIONS

We observed wide variation in the value of shoulder arthroplasty that was most strongly associated with procedure type and certain preoperative characteristics (eg, prior shoulder surgery, number of self-reported allergies, diabetes, ASES score). Awareness of these associations is important for implementation of targeted strategies to effectively reduce variation and redirect resources toward higher-value, cost-conscious care.

Despite Equivalent Medicare Reimbursement, Facility Costs for Outpatient Total Knee Arthroplasty Are Higher Than Unicompartmental Knee Arthroplasty

BACKGROUND

With the recent removal of total knee arthroplasty (TKA) from the Centers for Medicare and Medicaid Services (CMS) Inpatient Only list, facility reimbursement for outpatient TKA now falls under the Outpatient Prospective Payment System at the same rate as unicompartmental knee arthroplasty (UKA). The purpose of this study was to compare true facility costs of patients undergoing outpatient TKA with those undergoing UKA.

METHODS

We reviewed a consecutive series of 2310 outpatient TKA and 231 UKA patients from 2018 to 2019. Outpatient status was defined as a hospital stay of less than 2 midnights. Facility costs were calculated using a time-driven, activity-based costing algorithm. Implants, supplies, medications, and personnel costs were compared between outpatient TKA and UKA patients. A multivariate analysis was performed to control for confounding medical and demographic variables.

RESULTS

When compared with patients undergoing UKA, outpatient TKA patients had higher implant costs ($3403 vs $3081; P < .001) and overall hospital costs ($6350 vs $5594; P < .001). Outpatient TKA patients had a greater length of stay (1.2 vs 0.5 days; P < .001) and greater postoperative personnel costs ($783 vs $166; P < .001) than UKA patients. When controlling for comorbidities, outpatient TKA was associated with a $803 (P < .001) increase in overall facility costs compared with UKA.

CONCLUSION

Despite equivalent reimbursement from CMS as UKA, outpatient TKA has increased facility costs to the hospital. Although implant costs can vary greatly by institution, CMS should consider appropriately reimbursing outpatient TKA for the additional personnel costs when compared with UKA.

Value Analysis of Anatomic and Reverse Shoulder Arthroplasty for Glenohumeral Osteoarthritis with an Intact Rotator Cuff

BACKGROUND

While anatomic total shoulder arthroplasty (TSA) has historically been considered the ideal treatment for end-stage glenohumeral osteoarthritis, reverse shoulder arthroplasty (RSA) has recently gained popularity. With substantial differences in implant design and cost between TSA and RSA, further investigation of outcomes and value is needed to support recent trends. The purpose of this study was to use the average and incremental cost-effectiveness ratio (ACER and ICER) and the procedure value index (PVI) to examine differences in outcomes and value between TSA and RSA for treatment of glenohumeral osteoarthritis with an intact rotator cuff.

METHODS

We performed a retrospective matched-cohort study of patients treated with primary shoulder arthroplasty for osteoarthritis with an intact rotator cuff who had a minimum 2-year follow-up. Outcome measures analyzed included the Simple Shoulder Test (SST), American Shoulder and Elbow Surgeons (ASES) questionnaire, visual analog scale (VAS) for pain, Single Assessment Numeric Evaluation (SANE), and overall satisfaction. Patients treated with TSA were matched 4:1 to those treated with RSA based on sex, age, and preoperative SST score. Value differences between TSA and RSA were calculated. Radiographs were analyzed for preoperative glenoid classification and postoperative radiolucent lines and gross loosening.

RESULTS

Two hundred and fifty-two TSA-treated patients were matched to 63 RSA-treated patients with no significant differences in sex, age, or preoperative SST score. Total hospitalization costs, charges, and reimbursements along with outcome improvements in units of minimal clinically important differences (MCIDs) and patient satisfaction did not differ between the groups. For RSA, the implant cost was significantly higher than that for TSA, but the operating room, anesthesia, and cement costs were lower. The TSA group had a 3.2% rate of gross glenoid loosening and a 2.4% revision rate. There was no loosening or revision in the RSA group. None of the value analytics differed between groups even after inclusion of the outcomes and costs of early TSA revisions.

CONCLUSIONS

TSA and RSA demonstrated similar outcomes and value when used to manage glenohumeral osteoarthritis with an intact rotator cuff.

LEVEL OF EVIDENCE

Therapeutic Level III. See Instructions for Authors for a complete description of levels of evidence.

Episode-of-Care Costs for Revision Total Joint Arthroplasties by Decadal Age Groups

The demand for revision total joint arthroplasties (rTJAs) is expected to increase as the age of the population continues to rise. Accurate cost data regarding hospital expenses for differing age groups are needed to deliver optimal care within value-based healthcare (VBHC) models. The aim of this study was to compare the total in-hospital costs by decadal groups following rTJA and to determine the primary drivers of the costs for these procedures. Time-driven activity-based costing (TDABC) was used to capture granular hospital costs. A total of 551 rTJAs were included in the study, with 294 sexagenarians, 198 septuagenarians, and 59 octogenarians and older. Sexagenarians had a lower ASA classification (2.3 vs. 2.4 and 2.7; p < 0.0001) and were more often privately insured (66.7% vs. 24.2% and 33.9%; p < 0.0001) as compared to septuagenarians and octogenarians and older, respectively. Sexagenarians were discharged to home at a higher rate (85.3% vs. 68.3% and 34.3%; p < 0.0001), experienced a longer operating room (OR) time (199.8 min vs. 189.7 min and 172.3 min; p = 0.0195), and had a differing overall hospital length of stay (2.8 days vs. 2.7 days and 3.6 days; p = 0.0086) compared to septuagenarians and octogenarians and older, respectively. Sexagenarians had 7% and 23% less expensive personnel costs from post-anesthesia care unit (PACU) to discharge (p < 0.0001), and 1% and 24% more expensive implant costs (p = 0.077) compared to septuagenarians and octogenarians and older, respectively. Sexagenarians had a lower total in-hospital cost for rTJAs by 0.9% compared to septuagenarians but 12% more expensive total in-hospital costs compared to octogenarians and older (p = 0.185). Multivariate linear regression showed that the implant cost (0.88389; p < 0.0001), OR time (0.12140; p < 0.0001), personnel cost from PACU through to discharge (0.11472; p = 0.0007), and rTHAs (-0.03058; p < 0.0001) to be the strongest associations with overall costs. Focusing on the implant costs and OR times to reduce costs for all age groups for rTJAs is important to provide cost-effective VBHC.

Time-Driven Activity-Based Costing Provides a Lower and More Accurate Assessment of Costs in the Field of Orthopaedic Surgery Compared With Traditional Accounting Methods

PURPOSE

To analyze the implementation and benefits of time-driven activity-based costing (TDABC) in the field of orthopaedic surgery.

METHODS

We performed a search of PubMed, Google Scholar, and Embase in March 2020, using the following terms: "Time-Driven Activity-Based Costing," "TDABC," "Orthopaedic Surgery," and "Cost." Then we selected the studies that used the TDABC methodology to generate costs for a particular aspect of orthopaedic surgery. The included studies were divided into the following 5 main categories for ease of analysis: joint arthroplasty, trauma, hand, electronic medical record (EMR) implementation, and pediatric. We analyzed the overall ability of TDABC in the field of orthopaedic surgery, compared to the standard costing methods.

RESULTS

We included a total of 19 studies that implemented the TDABC methodology to generate a cost, which was compared to traditional accounting methods. The orthopaedic subspecialty with the most amount of TDABC implementation has been the field of joint arthroplasty. In these studies, the authors have noted that TDABC has provided a more granular breakdown of costs and has calculated a lower cost compared with traditional accounting methods.

CONCLUSION

TDABC is a powerful cost analysis method that has demonstrated benefit over the activity-based costing (ABC) approach in determining a lower and more accurate cost of orthopaedic procedures. Furthermore, the TDABC method generates an average cost reduction of $10,000 and $12,000 for total hip arthroplasty and total knee arthroplasty, respectively.

CLINICAL RELEVANCE

TDABC can allow health care administration to better determine and understand the cost drivers of particular orthopaedic procedures at their institutions. With improved estimates on the true cost of an activity, hospital administrators and department chairs can adjust to ensure cost-effective, patient-centered health care.

Comparison of direct surgical cost for humeral shaft fracture fixation: open reduction internal fixation versus intramedullary nailing

Background and/or Hypothesis

Prior literature has supported similar complication rates and outcomes for humeral shaft fractures treated with open reduction internal fixation (ORIF) with a plate/screw construct versus intramedullary nailing (IMN). The purpose of this study is to determine whether surgical encounter total direct costs (SETDCs) differ between ORIF and IMN for these fractures.

Methods

Adult patients (≥ 18 years) treated for isolated humeral shaft fractures by ORIF or IMN between June 18, 2014 and June 17, 2019 at a single tertiary academic center were available for inclusion. SETDCs for ORIF and IMN groups, obtained through our institution's information technology value tool, were adjusted to 2019 US dollars and converted to relative costs per institutional policy. SETDCs for ORIF and IMN were compared using the Wilcoxon rank-sum test.

Results

Demographic factors did not differ between ORIF and IMN cohorts with the exception of age (mean of 18.6 years older for IMN; P < .001) and American Society of Anesthesiologist class (higher for IMN; P = .029). Substantial cost variation was observed among the 39 included ORIF and 21 IMN cases. Costs pertaining to operating room utilization (P = .77), implants (P = .64), and the recovery room (P = .27) were similar for ORIF and IMN, whereas supply costs were significantly greater for IMN with a median (interquartile range) of 0.21 (0.17 ∼ 0.28), more than twice the supply costs of ORIF (0.09 [0.05 ∼ 0.13], P < .001). The SETDC of IMN was significantly greater than that of ORIF (median [interquartile range]:1.00 [0.9 to 1.13] vs. 0.83 [0.71∼1.05], respectively; P = .047).

Discussion and/or Conclusion

Our study found that the SETDC for humeral shaft fracture fixation was greater for IMN than for ORIF, although patient cohorts differed significantly with respect to age and the American Society of Anesthesiologist class. Surgeons should take these findings into consideration when consenting patients with humeral shaft fractures for the appropriate fixation type.

Reference Pricing Reduces Total Knee Implant Costs

BACKGROUND

Reference pricing establishes a set price a hospital is willing to pay for total knee arthroplasty (TKA) components regardless of vendor. The hospital contracts with vendors that sell implants to the hospital at the hospital-dictated prices. Orthopedic surgeons are free to utilize any implant system that has met the reference price using their best clinical judgment. Our hypothesis is that vendors will meet the set price and selection of different vendors and technologies will not change.

METHODS

We retrospectively analyzed the 12 months prior (May 2017-2018) and the most recent 12 months after (March 2019-2020) implementing reference pricing at our institution. We investigated differences in average prices for total implant and component costs. We evaluated cost of implants with respect to surgeon volume, assessed the rate of cementless TKAs used, and number of companies purchased from before and after reference pricing.

RESULTS

In total, 7148 TKAs were included in the study with 3790 arthroplasties before and 3358 after implementation of reference pricing. Overall implant costs decreased by 16.7% (P < .0001). All individual knee component costs decreased by at least 11% (P = .0003). No difference in prices were found among surgeons (P = .9758). Cementless knee use increased by 9% (P < .0001; odds ratio 1.94, 95% confidence interval = 1.69-2.24). No vendor business was lost.

CONCLUSION

The strategy of reference pricing significantly reduced costs for TKA implants at our institution. The reduction in implant costs was regardless of surgeon volume. Newer technologies were utilized more often after reference pricing. This strategy represents a significant cost-savings approach for other hospitals.

Differences in Hospital Costs among Octogenarians and Nonagenarians Following Primary Total Joint Arthroplasty

The proportion of patients over the age of 90 years continues to grow, and the anticipated demand for total joint arthroplasty (TJA) in this population is expected to rise concomitantly. As the country shifts to alternative reimbursement models, data regarding hospital expenses is needed for accurate risk-adjusted stratification. The aim of this study was to compare total in-hospital costs following primary TJA in octogenarians and nonagenarians, and to determine the primary drivers of cost. This was a retrospective analysis from a single institution in the U.S. We used time-drive activity-based costing (TDABC) to capture granular total hospital costs for each patient. 889 TJA's were included in the study, with 841 octogenarians and 48 nonagenarians. Nonagenarians were more likely to undergo total hip arthroplasty (THA) (70.8% vs. 42.4%; p < 0.0001), had higher ASA classification (2.6 vs. 2.4; p = 0.049), and were more often privately insured (35.4% vs. 27.8%; p = 0.0001) as compared to octogenarians. Nonagenarians were more often discharged to skilled nursing facilities (56.2% vs. 37.5%; p = 0.0011), experienced longer operating room (OR) time (142 vs. 133; p = 0.0201) and length of stay (3.7 vs. 3.1; p = 0.0003), and had higher implant and total in-hospital costs (p < 0.0001 and 0.0001). Multivariate linear regression showed implant cost (0.700; p < 0.0001), length of stay (0.546; p < 0.0001), and OR time (0.288; p < 0.0001) to be the strongest associations with overall costs. Primary TJA for nonagenarians was more expensive than octogenarians. Targeting implant costs, length of stay, and OR time can reduce costs for nonagenarians in order to provide cost-effective value-based care.

Direct Inpatient Medical Costs of Operative Treatment of Periprosthetic Hip and Knee Infections Are Twofold Higher Than Those of Aseptic Revisions

BACKGROUND

Periprosthetic joint infections (PJIs) following total hip arthroplasty (THA) and total knee arthroplasty (TKA) are associated with substantial morbidity. A better understanding of the costs of PJI treatment can inform prevention, treatment, and reimbursement strategies. The purpose of the present study was to describe direct inpatient medical costs associated with the treatment of hip and knee PJI.

METHODS

At a single tertiary care institution, 176 hips and 266 knees that underwent 2-stage revisions for the treatment of PJI from 2009 to 2015 were compared with 1,611 hips and 1,276 knees that underwent revisions for aseptic indications. In addition, 84 hips and 137 knees that underwent irrigation and debridement (I&D) with partial component exchange were compared with 39 hips and 138 knees that underwent partial component exchange for aseptic indications. Line-item details of services billed during hospitalization were retrieved, and standardized direct medical costs were calculated in 2018 inflation-adjusted dollars.

RESULTS

The mean direct medical cost of 2-stage revision THA performed for the treatment of PJI was significantly higher than that of aseptic revision THA ($58,369 compared with $22,846, p < 0.001). Similarly, the cost of 2-stage revision TKA performed for the treatment of PJI was significantly higher than that of aseptic revision TKA ($56,900 compared with $24,630, p < 0.001). Even when the total costs of aseptic revisions were doubled for a representative comparison with 2-stage procedures, the costs of PJI procedures were 15% to 28% higher than those of the doubled costs of aseptic revisions (p < 0.001). The mean direct medical cost of I&D procedures for PJI was about twofold higher than of partial component exchange for aseptic indications.

CONCLUSIONS

The direct medical costs of operative treatment of PJI following THA and TKA are twofold higher than the costs of similar aseptic revisions. The high economic burden of PJI warrants efforts to reduce the incidence of PJI. Reimbursement schemes should account for the high costs of treating PJI in order to ensure sustainable patient care.

LEVEL OF EVIDENCE

Economic Level IV. See Instructions for Authors for a complete description of levels of evidence.

Evaluation of factors driving cost variation for distal humerus open reduction internal fixation

Background

Distal humerus fracture open reduction and internal fixation (ORIF) represents a substantial cost burden to the health care system. The purpose of this study was to describe surgical encounter cost variation for distal humerus ORIF, and to determine demographic-, injury-, and treatment-specific factors that influence cost.

Methods

We retrospectively identified adult patients (≥18 years) treated for isolated distal humerus fractures between July 2014 and July 2019 at a single tertiary academic referral center. For each case, surgical encounter total direct costs (SETDCs) were obtained via our institution's information technology value tools, which prospectively record granular direct cost data for every health care encounter. Costs were converted to 2019 dollars using the personal consumption expenditure indices for health and summarized with descriptive statistics. Univariate and multivariate linear regression models were used to identify factors influencing SETDC.

Results

Surgical costs varied widely for the 47 included patients, with a standard deviation (SD) of 33% and interquartile range of 76%-124% relative to the mean SETDC. Implant and facility costs were responsible for 46.2% and 32.6% of the SETDC, respectively. Implant costs also varied considerably, with an SD of 21% and range from 13%-36% relative to the mean SETDC. Multivariate analysis demonstrated that SETDC increased 24% (P < .001) on performing an olecranon osteotomy, and by 15% for each additional 1 hour of surgical time (P < .001). These findings were independent of age, sex, body mass index, open fracture, need for an additional small plate construct as a reduction aid, and fracture pattern (all insignificant in the multivariate analysis, with P >.05 for each factor).

Conclusion

Substantial variations in surgical encounter total direct costs for distal humerus ORIF exist, as do wide variations in associated implant costs that comprise nearly half of the entire surgical cost. Performing an olecranon osteotomy, and increased surgical time, significantly increased surgical costs. Although use of an olecranon osteotomy may not be a completely controllable factor as it is confounded by fracture severity and operative time, this may suggest that surgeons should try to use an olecranon osteotomy judiciously. Although complexity of the fracture pattern was statistically insignificant, it is confounded by the need for an olecranon osteotomy and increased surgical time and likely is a clinically relevant and nonmodifiable driver of surgical cost. These findings highlight opportunities to reduce cost variation, and potentially improve the value of care, for distal humerus ORIF patients.

Recent trends in Medicare utilization and surgeon reimbursement for shoulder arthroplasty

BACKGROUND

Recent efforts to contain health care costs and move toward value-based health care have intensified, with a continued focus on Medicare expenditures, especially for high-volume procedures. As total shoulder arthroplasty (TSA) volume continues to increase, especially within the Medicare population, it is important for orthopedic surgeons to understand recent trends in the allocation of health care expenditures and potential effects on reimbursements. The purpose of this study was to evaluate trends in annual Medicare utilization and provider reimbursement rates for shoulder arthroplasty procedures between 2012 and 2017.

METHODS

This study tracked annual Medicare claims and payments to shoulder arthroplasty surgeons via publicly available databases and aggregated data at the county level. Descriptive statistics were used to evaluate trends in procedure volume, utilization rate (per 10,000 Medicare beneficiaries), and reimbursement rate. We used adjusted multiple linear regression models to examine associations between county-specific variables (ie, urban or rural, average household income, poverty rate, percentage Medicare population, and race and ethnicity demographics) and procedure volume, utilization rate, and reimbursement rate.

RESULTS

Between 2012 and 2017, there was an 81.3% increase in primary TSA volume and 55.5% increase in primary TSA utilization. The Midwest and South had higher utilization rates than the Northeast and West (P < .001). TSA utilization rates in metropolitan areas were significantly higher than in rural areas (P < .001). Utilization rates for primary TSA procedures also had a significant negative association with poverty rate (P < .001). Regarding reimbursements, the Medicare payment per TSA case decreased from 2012 to 2017, with overall inflation-adjusted decreases of 7.1% and 11.8% for primary and revision cases, respectively. TSAs performed in metropolitan areas received significantly higher reimbursements per case than TSAs performed in rural areas ($1108.05 and $1066.40, respectively; P = .002). Furthermore, reimbursements per case were on average higher in the Northeast and West than in the South and Midwest (P < .001).

CONCLUSIONS

Our study confirms that although TSA volume and per capita utilization have increased dramatically since 2012, Medicare Part B reimbursements to surgeons have continued to fall even after the adoption of bundled-payment models for orthopedic procedures. Cost-containment efforts continue to focus on Medicare reimbursements to surgeons, although other expenditures such as hospital payments and operational and implant costs must also be evaluated as part of an overall transition to value-based health care.

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.

Utility of postoperative hemoglobin testing following total shoulder arthroplasty

Background

Identifying areas of excess cost for shoulder arthroplasty patients can play a role in effective health care spending. The purpose of this study was to assess the utility of postoperative complete blood count (CBC) testing after total shoulder arthroplasty (TSA) and identify which patients benefit from routine CBC testing.

Methods

We performed a retrospective review of a cohort of patients who underwent primary TSA from January 2018 through January 2019. All patients in this cohort received tranexamic acid. Patient demographic characteristics and patient-specific risk factors such as American Society of Anesthesiologists score, Elixhauser index, body mass index, smoking status, and coagulopathy history were obtained. Perioperative values including length of surgery, preoperative and postoperative hemoglobin (Hgb) levels, and need for transfusion were also obtained.

Results

This study included 387 TSA patients in the final analysis. Comparison between the cohort requiring transfusion and the cohort undergoing no intervention revealed no statistically significant differences in age, sex, body mass index, American Society of Anesthesiologists score, or Elixhauser index. The group receiving transfusions was found to have significantly lower levels of preoperative Hgb (11.3 g/dL) and postoperative Hgb (8.1 g/dL) (P < .0001). Additionally, the percentages of patients with abnormal preoperative Hgb levels (<12 g/dL) (72.3%) and postoperative day 1 Hgb levels < 9 g/dL (81.8%) were significantly higher in the group receiving transfusions (P < .0001). A multivariate regression model identified an abnormal preoperative Hgb level (<12 g/dL), with an odds ratio of 3.8 (95% confidence interval, 1.5-6.2; P < .001), and postoperative day 1 Hgb level < 9 g/dL, with an odds ratio of 3.3 (95% confidence interval, 0.4-6.1; P < .03), as significant predictors of the risk of transfusion with a sensitivity of 64% and specificity of 96.2% with an area under the curve of 0.87.

Conclusion

Routine CBC testing may not be necessary for patients who receive tranexamic acid and have preoperative Hgb levels > 12 mg/dL and first postoperative Hgb levels > 9 mg/dL. This translates to potential health care cost savings and improves current evidence-based perioperative management in shoulder arthroplasty.

Population growth, ageing and obesity do not sufficiently explain the increased utilization of total knee replacement in Australia

BACKGROUND

The utilization of total knee replacement (TKR) has increased significantly. The objective of this study was to assess the impact of changes in population demography (population growth, ageing and gender) and body mass indices (BMIs) on the additional volume of knee replacement surgery undertaken in Australia.

METHODS

Using national data, we compared estimates based on changes in population demography and BMIs to the reported increase in TKR between 2007 and 2017. The costs of additional surgery were estimated using the National Hospital Cost Data Collection.

RESULTS

An additional 25 814 TKRs were performed in 2017 compared to 2007. Contributions from population growth, ageing and changing BMIs were 27.1%, 10.4%, and 6.3%-15.3%, respectively. Other drivers contributed between 47.2% and 56.2%, representing 12 176-14 506 TKRs at a financial cost of A$320.9 million to A$382.3 million per year in 2017.

CONCLUSION

The volume of additional surgery being performed considerably exceeded estimates based on changing population demography and rising rates of obesity. The other drivers of additional TKR utilization will likely have significant implications for the health budget and warrant further investigation. This may involve an examination of the current indications for surgery and the cost-effectiveness of TKR in various settings, reviewing patient expectations and preferences, and assessing the impact of policies which relate to the funding and provision of TKR.

Economic Recovery After the COVID-19 Pandemic: Resuming Elective Orthopedic Surgery and Total Joint Arthroplasty

BACKGROUND

The economic effects of the COVID-19 crisis are not like anything the U.S. health care system has ever experienced.

METHODS

As we begin to emerge from the peak of the COVID-19 pandemic, we need to plan the sustainable resumption of elective procedures. We must first ensure the safety of our patients and surgical staff. It must be a priority to monitor the availability of supplies for the continued care of patients suffering from COVID-19. As we resume elective orthopedic surgery and total joint arthroplasty, we must begin to reduce expenses by renegotiating vendor contracts, use ambulatory surgery centers and hospital outpatient departments in a safe and effective manner, adhere to strict evidence-based and COVID-19-adjusted practices, and incorporate telemedicine and other technology platforms when feasible for health care systems and orthopedic groups to survive economically.

RESULTS

The return to normalcy will be slow and may be different than what we are accustomed to, but we must work together to plan a transition to a more sustainable health care reality which accommodates a COVID-19 world.

CONCLUSION

Our goal should be using these lessons to achieve a healthy and successful 2021 fiscal year.