Cost and utilization of healthcare services for hip and knee replacement.

OBJECTIVE: Describe resource utilization and costs for total hip replacement (THR) and total knee replacement (TKR) for the 90 days before hospitalization for surgery, the hospital event, and the 90 and 360 days after hospitalization for surgery with emphasis on 90 days after hospitalization.

METHODS: A large insurance database was used to identify outpatient and summarized hospital resource use and payments (insurer perspective) for THR and TKR. A second large US database provided hospital details (charge description master level) of inpatient services, costs, and charges (hospital perspective) for a different sample of THR and TKR patients. Included patients were ≥45 years old, had no hospitalization record within 1 year before surgery, and THR length of stay (LOS) of 2-8 days or TKR LOS 2-6 days.

RESULTS: There were 22 618 THR and 50 686 TKR patients in the insurance database and 81 635 THR and 158 990 TKR in the hospital database. Average age was ∼66 years for THR and TKR patients. Median LOS was 4 days (both surgeries). Hospital costs (hospital perspective) were $17 588 in US dollars (USD) and $16 267 (USD) for THR and TKR, respectively. Reimbursement for hospital services (insurer perspective) were $22 967 (USD) and $21 583 (USD) for THR and TKR, respectively. In 90 days post-surgery, THR and TKR total payments were $3827 (USD) and $4237 (USD), respectively. Payments for the first 90 days post-surgery were 57.5% of the 360-day post-period for THR-related payments and 59.9% for TKR-related payments.

CONCLUSION: Payers considering use of episode-of-care payment models for THR and TKR may wish to concentrate efforts on the 90 days post-discharge.

LIMITATIONS: While this study used large samples of subjects, generalisability of the results may be limited since the samples were not randomized samples of THR and TKR patients. It is noteworthy that patients in the hospital sample are not the same as those in the insurer sample. Selection of hip-related and knee-related procedures and associated costs was based on qualitative review. Payers may use different billing codes or aggregate costs differently.