Are Commercial Value-Based Care Programs Still Viable for Hip and Knee Arthroplasty: An Analysis of a Single...

Unlike Medicare bundled payment programs for total hip arthroplasty and total knee arthroplasty, which have little variance in facility reimbursements, few publications have studied value-based care (VBC) partnerships with commercial insurers. Specifically, VBC partnerships incentivize practices to maximize revenue surpluses by providing high-value care at decreased costs. Surgical facility choice can reduce costs with more procedures shifting to lower-cost specialty hospitals and ambulatory surgery centers. This study aimed to determine whether demand matching appropriate patients to lower-cost facilities reduced costs in our commercial VBC program.

We reviewed a consecutive series of 4,285 primary total hip arthroplasty and total knee arthroplasty patients between January 2020 and April 2023 as part of a single-payer VBC program, including both commercial and Medicare Advantage (MA) plans. Demographics, facility, and 90-day episode-of-care claims data were collected from our clinical and payor cost databases. Surgical facility utilization, total costs, and revenue surpluses were stratified by insurance type (commercial versus MA), and trends were compared over the 4-year study period. There were 1,369 patients (32%) who had MA and 2,916 (68%) who had commercial insurance.

Among commercially insured patients, the mean total ($33,455 versus $27,433, P < 0.001) and facility costs ($25,068 versus $18,385, P < 0.001) both declined from 2020 to 2023, whereas the revenue surpluses ($6,216 versus $13,090, P < 0.001) increased. Among MA patients, mean total ($17,809 versus $17,235, P < 0.001) and facility costs ($13,491 versus $13,151, P < 0.001) had only minimal decreases, whereas revenue surpluses declined ($7,928 versus $4,073, P < 0.001). Utilization of ambulatory surgery centers increased among both groups from 2020 to 2023 (1 versus 20% for commercial, 0.3 versus 12% for MA, P < 0.001).

Practices can still have successful VBC partnerships with private insurers by demand matching appropriate patients to lower-cost facilities. Our cost-reduction efforts did not have the same success with MA plans. Further studies should evaluate whether continued cuts to MA programs will threaten access.