Primary Total Joint Replacement AAOS Poster
1
The Total “Economic Cost” of Primary Total Joint Replacement Surgery in the United States Ryan M. Graver, MPH; Lisa Da Deppo, PharmD, MPH, MSc; Erik M. Harris, MHA; Shamiram R. Feinglass, MD, MPH, Zimmer, Inc. Introduction Published literature has established that total hip and knee arthroplasty are among the most cost effective surgical interventions in medicine. 1,2,3,4 However, limited data are available, and few studies have comprehensively investigated the direct costs of both orthopaedic- and non-orthopaedic- associated care, longitudinally, for both Medicare and commercial insurance patients. 5,6,7,8 Study Objective The objective was to report the actual economic burden to Medicare and commercial insurance assoc- iated with the treatment of patients who require primary total hip and knee arthroplasty procedures. This research explores the direct economic costs and related healthcare utilization in the United States among the 60% Medicare and 35% commercial insurance patient populations undergoing primary THA and TKA. 9 Materials and Methods Data Source. This study is a retrospective, longitudinal database audit with data derived from the Thomson Reuters MarketScan ® Commercial Claims and Encounters Database (Commercial Database) and Medicare Supplemental and Coordination of Benefits Database (Medicare Database) from January 1, 2000 through December 31, 2007. Claims were selected for patients who underwent arthroplasty procedures, identified using the ICD-9 procedure codes, 81.51 for primary total hip and 81.54 for primary knee arthroplasty. Study Population and Sample Selection. For this analysis, patients undergoing total knee and hip replacement were examined. This is an episode-based analysis and a patient could be included in more than one cohort. • Only adult patients in the databases who had at least 12-months of continuous health plan • enrollment in the pre- and post-arthroplasty period, and did not have any diagnosis for bone cancers, were included in this analysis. Patients with more than one type of arthroplasty procedure on the index date were excluded. • For the cost and utilization analysis, episodes were assigned to cohorts depending on the year • of the index arthoplasty, 2003-2006. Cost and Utilization Variables. The data endpoints were segmented into orthopaedic-related vs. non- orthopaedic-related care for both inpatient and outpatient claims. Cost variables analyzed include: hospital access, in-patient hospital stay, orthopaedic procedures, medications, outpatient drug utilization, specialty provider’s visits and contacts with medical specialty in the 3-year pre-surgery or 3-year post-surgery period. Costs were extrapolated as reimbursement payment requests made by institution and provider to third party Medicare and commercial payers. Costs were adjusted to December 2007 dollars by multiplying each year’s cost by the Medical Care Consumer Price Index. 10 Results A total of 93,717 patient records of primary total hip arthroplasty (THA) and primary total knee arthroplasty (TKA) performed from January 1, 2003 and December 21, 2006 were qualified for analysis. 29,225 patients underwent total hip replacement surgery and 64,492 patients underwent total • knee replacement surgery. Females comprised the majority of patients undergoing primary total joint replacement (54.9% • hip replacement, 62.6% knee replacement) with a mean age of 65.8 (± 11.9) years at the time of primary hip arthroplasty and 66.6 (± 10.0) years at the time of primary knee arthroplasty. Examining the mean combined costs and utilization during the first year post-procedure we • observed the following: Average hospital length of stay was 3.67 days for primary THA and 3.70 days for primary TKA. ° During the entire study period, the total inpatient hospitalization cost for all reasons was ° $27,556 for THA and $27,057 for TKA (Figure 1). Healthcare utilization and expenditure increased dramatically in the 1-year post-surgery ° period due to arthroplasty and arthroplasty-related costs (Table 1). The mean orthopaedic related hospitalization cost was $19,328 for THA and $18,540 for ° TKA cohorts or 70% and 68.5% respectively. Total pharmaceutical costs were $18,018 for THA and $21,180 for TKA; of which approx- ° imately $2,547 or 14.1% was orthopaedic related for THA and $2,904 or 13.7% for TKA. The total national aggregate direct cost of illness for primary THA and TKA in the year of the • index procedure, by payer type, is represented in Figure 2 and Figure 3. Costs were adjusted to 2007 dollars. Procedure volumes appear to be driving the annual growth in commercial costs for both THA and TKA, while volume appears to account for only half of the Medicare cost increases observed; likely due to Medicare’s annual adjustment in reimbursement. It is estimated that the aggregate national direct cost of orthopaedic related care in the year • patients underwent THA increased from $4.1 billion in 2003 to approximately $5 billion in 2006 and from $7.7 billion in 2003 to $11.3 billion in 2006 for TKA. The inpatient hospital portion averaged 70% for THA and 65% for TKA of the total estimated aggregate costs for each procedure cohort during the year of the index procedure. Discussions/Conclusions This analysis demonstrates that the healthcare costs for patients with joint replacement in the year of the surgery are higher than in the years pre-surgery. Cost and utilization patterns were as expected: the higher cost and utilization during the 1-year post-surgery period reflects the arthroplasty and related care being included in this time frame. The post-surgery period utilization was as expected for orthopaedic procedures, the percentage of patients receiving physical and occupational therapy services or visiting physical medicine/rehab specialists after surgery appears to be lower than anticipated. Of note, orthopaedic specific inpatient hospital costs observed in the 2- to 3-year post-surgery period were higher than in the three years prior to the joint replacement procedure, averaging $698 for the THA cohort and $890 for the TKA cohort. These higher costs observed in the 2- to 3-year post-surgery period may be reflective of treatment costs associated with joint replacement complications requiring subsequent inpatient hospitalization, such as dislocation. This analysis was subject to a number of limitations. The results shown were all unadjusted for potential confounders such as age, seriousness of the morbidity status, and co-morbidities. It is important to note that classification error is possible when relying on diagnosis coding of administrative claims data. Lastly, this analysis did not consider the well known improvement in quality of life following arthroplasty, such as the clinically relevant improvement in outcomes such as pain relief and restoration of function in 90% 12 of patients receiving these procedures. This analysis represents the first truly population-based examination of orthopaedic expenditure in the Medicare and commercial insurance populations. With increasing budgetary pressure and increasing numbers of elderly patients who may be seeking these surgeries to relieve their hip and knee problems, reliable and objective quantification of the economic and epidemiologic characteristics of these surgeries is critically needed. Table 1. Mean Costs 3rd year pre procedure A 2nd year pre procedure A 1st year pre procedure A 1st year post procedure B 2nd year post procedure B 3rd year post procedure B Total Commercial Total Hip Cohort All Causes $8,762 $10,076 $11,475 $37,445 $11,980 $11,307 $91,046 Orthopedic Related $2,461 $3,016 $3,959 $29,121 $4,172 $3,326 $46,055 Total Knee Cohort All Causes $10,443 $11,433 $12,412 $40,164 $14,336 $13,530 $102,317 Orthopedic Related $3,218 $3,810 $4,222 $30,132 $5,030 $4,324 $50,736 Medicare Total Hip Cohort All Causes $8,135 $9,153 $10,935 $26,550 $11,459 $11,377 $77,609 Orthopedic Related $1,955 $2,264 $2,856 $17,739 $2,685 $2,285 $29,785 Total Knee Cohort All Causes $9,579 $9,834 $10,696 $27,206 $12,410 $12,084 $81,808 Orthopedic Related $2,164 $2,446 $2,611 $18,324 $3,047 $2,645 $31,237 Other¨ $28,169 Drugs $21,180 Hospital + $27,057 Rehabilitation $1,514 MD $9,252 Other¨ $24,888 Drugs $18,018 Hospital + $27,556 Rehabilitation $1,081 MD $8,941 Figure 1. Combined Medicare & Commercial Direct Costs During Study Period Total $80,484 $0 $100,000 Total Hip Total $87,172 $0 $100,000 Total Knee A Includes costs of services rendered prior to the index procedure, for any medcal reason. B Includes costs of services rendered following and including the index procedure, for any medical reason. Figure 2. Growth in Aggregate National THA Annual Costs $0 $1.00 $1.25 $1.50 $1.75 $2.00 $2.25 $2.50 $2.75 $3.00 2003 Cohort 2004 Cohort Cost in Billions 60K 70K 80K 90K 100K 110K 120K 130K 140K 150K Volume 2005 Cohort 2006 Cohort National Commercial Cost National Commercial Volume National Medicare Volume National Medicare Cost *Compound Annual Growth Rate (CAGR); the geometric mean growth rate on an annualized basis CAGR* = 4.65% CAGR* = 1.45% CAGR* = 5.84% CAGR* = 4.94% Figure 3. Growth in Aggregate National TKA Annual Costs $3.50 $3.75 $4.00 $4.25 $4.50 $4.75 $5.00 $5.25 $5.50 $5.75 $6.00 120K 140K 160K 180K 200K 220K 240K 260K 280K 300K 320K 2003 Cohort 2004 Cohort Cost in Billions Volume 2005 Cohort 2006 Cohort National Commercial Cost National Commercial Volume National Medicare Volume National Medicare Cost *Compound Annual Growth Rate (CAGR); the geometric mean growth rate on an annualized basis CAGR* = 10.91% CAGR* = 5.79% CAGR* = 8.67% CAGR* = 8.70% + Implant related costs included in Hospital costs for both THA & TKA. ¨ Other costs include all medical expenses reimbursed by insurance not categorized in Figure 1, including but not limited to; x-ray, MRI, chiropractic care, etc. Bibliography 1 Losina E, Walensky RP, Kessler CL. Cost-effectiveness of total knee arthroplasty in the United States: patient risk and hospital volume. Arch Intern Med 2009;169(12):1113. 2 Young NL, Cheah D, Waddell JP, Wright JG. Patient characteristics that affect the outcome of total hip arthroplasty: a review. Can J Surg 1998;41(3):188. 3 Chang RW, Pellisier JM, Hazen GB. A cost-effectiveness analysis of total hip arthroplasty for osteoarthritis of the hip. Jama 1996;275(11):858. 4 Liang MH, Cullen KE, Larson MG et al. Cost-effectiveness of total joint arthroplasty in osteoarthritis. Arthritis Rheum 1986;29(8):937-43. 5 Iorio R, Healy WL, Richards JA. Comparison of the hospital cost of primary and revision total hip arthroplasty after cost containment. Orthopedics 1999;22(2):185. 6 Gupta S, Hawker GA, Laporte A, Croxford R, Coyte PC. The economic burden of disabling hip and knee osteoarthritis (OA) from the perspective of individuals living with this condition. Rheumatology 2005;44(12):1531. 7 Tien WC, Kao HY, Tu YK, Chiu HC, Lee KT, Shi HY. A population-based study of prevalence and hospital charges in total hip and knee replacement. Int Orthop 2009;33(4):949-54. 8 Antoniou J, Martineau PA, Filion KB et al. In-hospital cost of total hip arthroplasty in Canada and the United States. J Bone Joint Surg Am 2004;86(11):2435. 9 Agency for Healthcare Research and Quality. National and state statistics on hospital stays by payer –Medicare, Medicaid, private, uninsured. http://hcupnet.ahrq.gov/. Accessed 2009 Mar 1. 10 Bureau of Labor Statistics. Consumer price index detailed report information. http://www.bls.gov/cpi/cpi_dr.htm. Accessed 2009 Mar 1. 11 Malchau H, Herberts P, Eisler T, Garellick G, Soderman P. The Swedish total hip replacement register. J Bone Joint Surg Am 2002;84(Suppl 2):S2. 12 Jeffrey N Katz, Total joint replacement in osteoarthritis. Best Practice & Research Clinical Rheumatology Vol. 20, No. 1, pp. 145–153, 2006 Acknowledgments Dan Huse, PhD, Vice President, Health Care Division, Thomson Reuters, Inc. MarketScan ® is a trademark of Thomson Reuters (Healthcare) Inc. © 2010 Zimmer, Inc. 1002-AE13 2/25/2010 LL
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Transcript of Primary Total Joint Replacement AAOS Poster
The Total “Economic Cost” of Primary Total Joint Replacement Surgery in the United StatesRyan M. Graver, MPH; Lisa Da Deppo, PharmD, MPH, MSc; Erik M. Harris, MHA; Shamiram R. Feinglass, MD, MPH, Zimmer, Inc.
IntroductionPublished literature has established that total hip and knee arthroplasty are among the most cost effective surgical interventions in medicine.1,2,3,4 However, limited data are available, and few studies have comprehensively investigated the direct costs of both orthopaedic- and non-orthopaedic-associated care, longitudinally, for both Medicare and commercial insurance patients.5,6,7,8
Study ObjectiveThe objective was to report the actual economic burden to Medicare and commercial insurance assoc-iated with the treatment of patients who require primary total hip and knee arthroplasty procedures. This research explores the direct economic costs and related healthcare utilization in the United States among the 60% Medicare and 35% commercial insurance patient populations undergoing primary THA and TKA.9
Materials and MethodsData Source. This study is a retrospective, longitudinal database audit with data derived from the Thomson Reuters MarketScan® Commercial Claims and Encounters Database (Commercial Database) and Medicare Supplemental and Coordination of Benefits Database (Medicare Database) from January 1, 2000 through December 31, 2007.
Claims were selected for patients who underwent arthroplasty procedures, identified using the ICD-9 procedure codes, 81.51 for primary total hip and 81.54 for primary knee arthroplasty.
Study Population and Sample Selection. For this analysis, patients undergoing total knee and hip replacement were examined.
This is an episode-based analysis and a patient could be included in more than one cohort. •
Only adult patients in the databases who had at least 12-months of continuous health plan •enrollment in the pre- and post-arthroplasty period, and did not have any diagnosis for bone cancers, were included in this analysis.
Patients with more than one type of arthroplasty procedure on the index date were excluded. •
For the cost and utilization analysis, episodes were assigned to cohorts depending on the year •of the index arthoplasty, 2003-2006.
Cost and Utilization Variables. The data endpoints were segmented into orthopaedic-related vs. non-orthopaedic-related care for both inpatient and outpatient claims. Cost variables analyzed include: hospital access, in-patient hospital stay, orthopaedic procedures, medications, outpatient drug utilization, specialty provider’s visits and contacts with medical specialty in the 3-year pre-surgery or 3-year post-surgery period.
Costs were extrapolated as reimbursement payment requests made by institution and provider to third party Medicare and commercial payers. Costs were adjusted to December 2007 dollars by multiplying each year’s cost by the Medical Care Consumer Price Index.10
ResultsA total of 93,717 patient records of primary total hip arthroplasty (THA) and primary total knee arthroplasty (TKA) performed from January 1, 2003 and December 21, 2006 were qualified for analysis.
29,225 patients underwent total hip replacement surgery and 64,492 patients underwent total •knee replacement surgery.
Females comprised the majority of patients undergoing primary total joint replacement (54.9% •hip replacement, 62.6% knee replacement) with a mean age of 65.8 (± 11.9) years at the time of primary hip arthroplasty and 66.6 (± 10.0) years at the time of primary knee arthroplasty.
Examining the mean combined costs and utilization during the first year post-procedure we •observed the following:
Average hospital length of stay was 3.67 days for primary THA and 3.70 days for primary TKA. °
During the entire study period, the total inpatient hospitalization cost for all reasons was °$27,556 for THA and $27,057 for TKA (Figure 1).
Healthcare utilization and expenditure increased dramatically in the 1-year post-surgery °period due to arthroplasty and arthroplasty-related costs (Table 1).
The mean orthopaedic related hospitalization cost was $19,328 for THA and $18,540 for °TKA cohorts or 70% and 68.5% respectively.
Total pharmaceutical costs were $18,018 for THA and $21,180 for TKA; of which approx- °imately $2,547 or 14.1% was orthopaedic related for THA and $2,904 or 13.7% for TKA.
The total national aggregate direct cost of illness for primary THA and TKA in the year of the •index procedure, by payer type, is represented in Figure 2 and Figure 3. Costs were adjusted to 2007 dollars. Procedure volumes appear to be driving the annual growth in commercial costs for both THA and TKA, while volume appears to account for only half of the Medicare cost increases observed; likely due to Medicare’s annual adjustment in reimbursement.
It is estimated that the aggregate national direct cost of orthopaedic related care in the year •patients underwent THA increased from $4.1 billion in 2003 to approximately $5 billion in 2006 and from $7.7 billion in 2003 to $11.3 billion in 2006 for TKA. The inpatient hospital portion averaged 70% for THA and 65% for TKA of the total estimated aggregate costs for each procedure cohort during the year of the index procedure.
Discussions/ConclusionsThis analysis demonstrates that the healthcare costs for patients with joint replacement in the year of the surgery are higher than in the years pre-surgery. Cost and utilization patterns were as expected: the higher cost and utilization during the 1-year post-surgery period reflects the arthroplasty and related care being included in this time frame.
The post-surgery period utilization was as expected for orthopaedic procedures, the percentage of patients receiving physical and occupational therapy services or visiting physical medicine/rehab specialists after surgery appears to be lower than anticipated.
Of note, orthopaedic specific inpatient hospital costs observed in the 2- to 3-year post-surgery period were higher than in the three years prior to the joint replacement procedure, averaging $698 for the THA cohort and $890 for the TKA cohort. These higher costs observed in the 2- to 3-year post-surgery
period may be reflective of treatment costs associated with joint replacement complications requiring subsequent inpatient hospitalization, such as dislocation.
This analysis was subject to a number of limitations. The results shown were all unadjusted for potential confounders such as age, seriousness of the morbidity status, and co-morbidities. It is important to note that classification error is possible when relying on diagnosis coding of administrative claims data. Lastly, this analysis did not consider the well known improvement in quality of life following arthroplasty, such as the clinically relevant improvement in outcomes such as pain relief and restoration of function in 90%12 of patients receiving these procedures.
This analysis represents the first truly population-based examination of orthopaedic expenditure in the Medicare and commercial insurance populations. With increasing budgetary pressure and increasing numbers of elderly patients who may be seeking these surgeries to relieve their hip and knee problems, reliable and objective quantification of the economic and epidemiologic characteristics of these surgeries is critically needed.
Table 1. Mean Costs
3rd year pre
procedureA
2nd year pre
procedureA
1st year pre
procedureA
1st year post
procedureB
2nd year post
procedureB
3rd year post
procedureB
Total
Commercial
Total Hip Cohort
All Causes $8,762 $10,076 $11,475 $37,445 $11,980 $11,307 $91,046
Orthopedic Related $2,461 $3,016 $3,959 $29,121 $4,172 $3,326 $46,055
Total Knee Cohort
All Causes $10,443 $11,433 $12,412 $40,164 $14,336 $13,530 $102,317
Orthopedic Related $3,218 $3,810 $4,222 $30,132 $5,030 $4,324 $50,736
Medicare
Total Hip Cohort
All Causes $8,135 $9,153 $10,935 $26,550 $11,459 $11,377 $77,609
Orthopedic Related $1,955 $2,264 $2,856 $17,739 $2,685 $2,285 $29,785
Total Knee Cohort
All Causes $9,579 $9,834 $10,696 $27,206 $12,410 $12,084 $81,808
Orthopedic Related $2,164 $2,446 $2,611 $18,324 $3,047 $2,645 $31,237
Other¨ $28,169
Drugs $21,180
Hospital+ $27,057
Rehabilitation$1,514
MD $9,252
Other¨ $24,888
Drugs $18,018
Hospital+ $27,556
Rehabilitation$1,081
MD $8,941
Figure 1. Combined Medicare & Commercial Direct Costs During Study Period
Total $80,484
$0
$100,000Total Hip
Total $87,172
$0
$100,000Total Knee
A Includes costs of services rendered prior to the index procedure, for any medcal reason. B Includes costs of services rendered following and including the index procedure, for any medical reason.
Figure 2. Growth in Aggregate National THA Annual Costs
$0
$1.00
$1.25
$1.50
$1.75
$2.00
$2.25
$2.50
$2.75
$3.00
2003 Cohort 2004 Cohort
Cost
in B
illio
ns
60K
70K
80K
90K
100K
110K
120K
130K
140K
150K
Volu
me
2005 Cohort 2006 Cohort
NationalCommercial Cost
NationalCommercial Volume
NationalMedicare Volume
NationalMedicareCost
*Compound Annual Growth Rate (CAGR); the geometric mean growth rate on anannualized basis
CAGR* = 4.65%
CAGR* = 1.45%
CAGR* = 5.84%
CAGR* = 4.94%
Figure 3. Growth in Aggregate National TKA Annual Costs
$3.50
$3.75
$4.00
$4.25
$4.50
$4.75
$5.00
$5.25
$5.50
$5.75
$6.00
120K
140K
160K
180K
200K
220K
240K
260K
280K
300K
320K
2003 Cohort 2004 Cohort
Cost
in B
illio
ns
Volu
me
2005 Cohort 2006 Cohort
NationalCommercial Cost
NationalCommercial Volume
NationalMedicare Volume
NationalMedicareCost
*Compound Annual Growth Rate (CAGR); the geometric mean growth rate on anannualized basis
CAGR* = 10.91%
CAGR* = 5.79%
CAGR* = 8.67%
CAGR* = 8.70%
+ Implant related costs included in Hospital costs for both THA & TKA.
¨ Other costs include all medical expenses reimbursed by insurance not categorized in Figure 1, including but not limited to; x-ray, MRI, chiropractic care, etc.
Bibliography1 Losina E, Walensky RP, Kessler CL. Cost-effectiveness of total knee arthroplasty in the United States: patient risk and hospital volume. Arch Intern Med 2009;169(12):1113.2 Young NL, Cheah D, Waddell JP, Wright JG. Patient characteristics that affect the outcome of total hip arthroplasty: a review. Can J Surg 1998;41(3):188.3 Chang RW, Pellisier JM, Hazen GB. A cost-effectiveness analysis of total hip arthroplasty for osteoarthritis of the hip. Jama 1996;275(11):858.4 Liang MH, Cullen KE, Larson MG et al. Cost-effectiveness of total joint arthroplasty in osteoarthritis. Arthritis Rheum 1986;29(8):937-43.5 Iorio R, Healy WL, Richards JA. Comparison of the hospital cost of primary and revision total hip arthroplasty after cost containment. Orthopedics 1999;22(2):185.6 Gupta S, Hawker GA, Laporte A, Croxford R, Coyte PC. The economic burden of disabling hip and knee osteoarthritis (OA) from the perspective of individuals living with this
condition. Rheumatology 2005;44(12):1531.7 Tien WC, Kao HY, Tu YK, Chiu HC, Lee KT, Shi HY. A population-based study of prevalence and hospital charges in total hip and knee replacement.
Int Orthop 2009;33(4):949-54.8 Antoniou J, Martineau PA, Filion KB et al. In-hospital cost of total hip arthroplasty in Canada and the United States. J Bone Joint Surg Am 2004;86(11):2435.9 Agency for Healthcare Research and Quality. National and state statistics on hospital stays by payer –Medicare, Medicaid, private, uninsured. http://hcupnet.ahrq.gov/.
Accessed 2009 Mar 1. 10 Bureau of Labor Statistics. Consumer price index detailed report information. http://www.bls.gov/cpi/cpi_dr.htm. Accessed 2009 Mar 1.11 Malchau H, Herberts P, Eisler T, Garellick G, Soderman P. The Swedish total hip replacement register. J Bone Joint Surg Am 2002;84(Suppl 2):S2.12 Jeffrey N Katz, Total joint replacement in osteoarthritis. Best Practice & Research Clinical Rheumatology Vol. 20, No. 1, pp. 145–153, 2006
AcknowledgmentsDan Huse, PhD, Vice President, Health Care Division, Thomson Reuters, Inc.
MarketScan® is a trademark of Thomson Reuters (Healthcare) Inc.
© 2010 Zimmer, Inc. 1002-AE13 2/25/2010 LL
