Editor’s note: The following content was published in the AAOS Now Special Edition and distributed in June 2020. The content was originally scheduled for the AAOS Now Daily Edition, which publishes each year onsite at the AAOS Annual Meeting but this year’s meeting in March was canceled due to COVID-19. Despite the cancellation, members can access virtual content from the Annual Meeting by visiting the Academy’s Annual Meeting Virtual Experience webpage.

Costs associated with total hip arthroplasty (THA) and total knee arthroplasty (TKA) vary significantly at different facilities. A study presented as part of the Annual Meeting Virtual Experience compared short-term outcomes of THAs and TKAs performed at higher- versus lower-cost facilities and observed no significant differences.

“Prior studies have demonstrated that there is significant variation in hospital facility costs for private insurance payers, but the literature is limited as to whether these differences in costs equate to differences in the quality of care provided,” study author Michael Yayac, MD, a research fellow in the Division of Adult Reconstruction at the Rothman Orthopaedic Institute, told AAOS Now. “With this study, we sought to quantify these differences within our practice for patients undergoing total joint arthroplasty (TJA) and determine if higher-cost facilities provide higher-quality care, potentially justifying their increased rates.”

Dr. Yayac and colleagues analyzed claims data from a single private insurer for THA and TKA patients treated between 2015 and 2017 by one of 25 surgeons at 16 hospitals within their institution. Mean index reimbursement was used to stratify facilities based on cost. Outcomes included 90-day episode-of-care costs, readmissions, comorbidities, discharge disposition, and complications.

Final analysis included 2,953 arthroplasties, of which 1,305 (44 percent) were conducted at higher-cost facilities. Of the higher-cost surgeries, 1,038 (80 percent) had a Charlson Comorbidity Index (CCI) of 0 (healthiest patients). Mean index reimbursement was higher at higher-cost facilities compared to lower-cost ones ($40,597 versus $26,781; P < 0.001), as was mean CCI (0.32 versus 0.24; P = 0.003); however, there were no significant between-group differences in complications (2.2 percent versus 1.8 percent, respectively; P = 0.396) or readmissions (2.2 percent versus 1.5 percent, respectively; P = 0.149).

In controlled analyses, THA and TKA patients at higher-cost facilities had increased index reimbursement by $13,780 (95 percent confidence interval [CI], 13,489–14,071; P < 0.001), as well as a greater risk of being discharged to a facility (odds ratio [OR], 3.2; 95 percent CI, 1.9–5.4; P < 0.0001). No significant increased risks were observed in complications (OR, 1.2; 95 percent CI, 0.7–2.0; P = 0.5983) or readmissions (OR, 1.5; 95 percent CI, 0.9–2.6; P = 0.1474).

The researchers calculated that moving a quarter of the healthiest patients (CCI of 0) from higher- to lower-cost facilities would result in inpatient facility costs decreasing by about $3,582,784.

The researchers were surprised by the significant cost disparities that existed within the same insurance network: “The most striking finding from this study was the wide range of facility costs that exist for TJA within the same private insurer. There was a range of more than $35,000, from roughly $8,500 at the lowest-cost hospital to more than $43,600 at the highest-cost facility,” Dr. Yayac said.

Dr. Yayac explained that the higher level of care that higher-cost facilities may be able to provide is unnecessary for many TJA patients because they are otherwise relatively healthy at the time of surgery.

Looking ahead, he said, “The next step would be to develop and implement a systematic process for appropriately matching patients to hospitals and determine the true degree of savings that could be achieved in this manner without compromising quality of care.”

A limitation of the study is that it included procedures covered by a single private insurer at one institution. “There likely exists a degree of selection bias in this study explaining the differences in comorbidities observed, which could subsequently explain the differences in length of stay, discharge disposition, and post-acute care costs that were also observed,” according to Dr. Yayac.

Dr. Yayac’s coauthors of Poster 026, “Demand Matching and Site of Care: High Cost Facilities Do Not Improve Short-Term Quality Metrics Following Total Hip and Knee Arthroplasty,” are Nicholas D’Antonio, BS; Andrew M. Star, MD; Matthew S. Austin, MD; and P. Maxwell Courtney, MD.

Kaitlyn D’Onofrio is the associate editor for AAOS Now. She can be reached at kdonofrio@aaos.org.