Dive Brief:
-
Hospitals could see huge savings in total joint replacements if they optimized anesthesia and bone cement and enhanced operating room workflow, Premier Inc. said in a new report.
-
Hospital prices vary up to $1,500 per knee implant and $1,700 per hip implant. These differences present an opportunity to reduce unnecessary hospital costs, according to research from the alliance of roughly 3,900 hospitals.
-
Despite differences in prices, hospitals have improved performance in total joint replacements, including length-of-stay and re-admission rates, the report shows.
Dive Insight:
Premier said providers are delivering “more efficient, effective” total joint replacement care. That’s evident in the fact that Medicare agreed to reimburse for total knee replacements in the outpatient setting rather than requiring procedures in a hospital.
Costs remain a problem though. “Opportunities to generate savings still exist within total joint replacements, especially in terms of reducing variation around the pricing of supplies and implants used in these procedures,” the report said.
The study comes two months after a JAMA opinion piece said avoiding inappropriate knee and hip replacements could save an estimated $12.7 billion. Reducing unneeded treatment is one way to find savings, and another is to use bundled payment models for joint replacement. When the procedure is reimbursed based on the entire episode of care, physicians have an incentive to coordinate care and follow up with patient rehabilitation.
There were an estimated 723,000 knee replacements and 505,000 hip replacements in the U.S. in 2014, which cost more than $20 billion. The rate of knee and hip replacements exceeds the rate of the same procedures in other high-income countries and now even younger adults are having joint replacements.
Premier said the healthcare system has the potential to save millions. The study analyzed data from 869 hospitals between March 2015 and October 2017. Researchers found improvements for total joint replacements. For instance, the median length-of-stay was two days (50% of cases fell between two to three days) and the 30-day readmission rate was only 3.1%.
Despite those improvements, Premier said there are still opportunities to reduce healthcare spending. The report found that $23.7 million for knee implants and $19.1 million for hip implants could be saved if all hospitals were able to meet or exceed the top 25th percentile in pricing.
One way to do that is to use local anesthesia. The report said 22% of patients received local anesthesia, while 52% received general anesthesia. The researchers said going with local anesthesia for joint replacement procedures could save money. Operating room time also played a part in costs. The highest-performing hospitals within the cohort had slightly more than $2,000 in labor spending in the operating room. Lower-performing hospitals were at more than $4,600.
Also, bone cement affected costs. Bone cement with antibiotics costs 120% more per patient than cement without antibiotics, though research doesn't show that it improves patient outcomes, Premier said.
Robin Czajka, senior line vice president of cost management at Premier, said total joint replacements are some of the most common procedures and every part of that care needs close analysis. “Implants have been more difficult to manage in terms of gaining transparency around pricing, but data and tools are available to help reduce variation and curb price discrepancies for high-value implants,” Czajka said.