Cost Analysis of Medicare Patients with Varying Complexities Who Underwent Total Knee Arthroplasty

The effort to reduce overall healthcare costs may affect more complex patients, as their pre- and postoperative care can be substantially involved. Therefore, the purpose of this study was to use a large nationwide insurance database to compare (1) costs, (2) reimbursements, and (3) net losses of 90-day episodes of care (EOC) for total knee arthroplasty (TKA) patients according to Elixhauser's Comorbidity Index (ECI) scores. All TKAs performed between 2005 and 2014 in the Medicare Standard Analytic Files were extracted from the database and stratified based on ECI scores, ranging from 1 to 5. ECI 1 patients served as the control cohort, while ECI 2, 3, 4, and 5 patients were considered study cohorts. Each study cohort and control cohort were matched based on age and sex, resulting in a total of 715,398 patients included for analysis. Total EOC costs, reimbursements, and total net losses (defined as total EOC costs minus total EOC reimbursements) were compared between the cohorts. Overall, total EOC costs increased with ECI. For example, compared with the matched ECI 1 cohorts, the total EOC costs for ECI 5 patients ($56,589.19 vs. $51,747.54) were significantly greater (p < 0.01). Although reimbursements increased with increasing ECI, so did net losses. The net losses for ECI 5 patients were greater than that for ECI 1 patients ($42,309.39 vs. $40,007.82). The bundled payments for care improvement (BPCI) and comprehensive care for joint replacement (CJR) are alternative payment models that might de-incentivize treatment of more complex patients. Our study found that despite increasing reimbursements, overall costs, and therefore net losses, were greater for more complex patients with higher ECI scores.