Variability in costs associated with total hip and knee replacement implants

Area of Science:

• Orthopedic surgery
• Health economics
• Healthcare policy

Background:

• Implant costs are a major component of total hip replacement (THR) and total knee replacement (TKR) procedures.
• Value-based healthcare reforms aim to manage costs by encouraging collaboration between physicians and hospitals.

Purpose of the Study:

• To quantify patient, hospital, and market characteristics associated with variations in implant and total procedure costs for THR and TKR.

Main Methods:

• Data collected on 10,155 TKR and 5013 THR procedures from 61 hospitals in 2008.
• Multivariate statistical analyses assessed associations between patient/hospital characteristics and implant/procedure costs.

Main Results:

• Average implant costs ranged from $1797-$12,093 (TKR) and $2392-$12,651 (THR).
• For TKR, 61% of cost variation was hospital-related; for THR, 36.1% was hospital-related.
• Significant within-hospital cost variation was observed for both procedures.

Conclusions:

• Substantial variations in THR and TKR implant costs exist within and across hospitals, independent of patient factors.
• This cost variation is a primary driver of overall THR and TKR surgery expenses.