- Avoiding inappropriate knee and hip replacements could save an estimated $12.7 billion, according to an opinion piece published this week in JAMA.
- Capping reimbursements for knee and hip replacements at the mean Medicare rate of $13,000 could produce annual savings of about $4.4 billion.
- Lack of patient education, variation in device prices and use of inpatient versus outpatient settings also help to fuel unnecessary costs around these procedures, the authors say.
An estimated 723,000 knee replacements and 505,000 hip replacements were performed in the U.S. in 2014, at a cost of more than $20 billion. That amounts to 226 knee and 204 hip replacements per 100,000 people, exceeding the rate of those procedures in other high-income countries. The incidence of these procedures is rising, too, with more younger adults opting for joint replacements, the article notes.
Meanwhile, one U.S. study of 205 knee replacements concluded more than a third were deemed possibly inappropriate — at a potential cost savings of $8.3 billion, the authors say.
Looking at what’s driving costs and procedures could help reduce overall healthcare costs. For example, reimbursements for knee and hip replacements range from $17,000 in some parts of the country to nearly $60,000 in others. Prices for the actual implants also vary by up to $4,000. A 2017 study found spending on knee and hip replacements was 2.1 and 1.7 times more at higher-cost hospitals versus lower-cost hospitals.
To rein in costs, the authors recommend limiting payment variation and educating patients about treatment alternatives and risks during the decision-making process. Increasing price transparency around the prostheses would enable hospitals to compare prices and reduce purchase prices.
Moving more procedures to outpatient settings could also lead to sizeable savings. The authors cite Ambulatory Surgery Center Association estimates that a fourth to half of knee and hip replacements could be done in outpatient settings. Shifting just a fourth to outpatient venues could save Medicare about $714 million annually.
CMS’ Comprehensive Care for Joint Replacement (CJR) bundled payment program is another vehicle for lowering costs. The model bundles payments for inpatient and 90-day post-discharge care for knee and hip surgery patients and rewards hospitals that surpass cost and quality benchmarks.
However, results have been mixed. A January 2017 study in JAMA Internal Medicine found CJR reduced spending by over $5,000 per episode. By contrast, a CMS report from the previous year showed split results — orthopedic surgery bundles saved over $860 per episode, but bundling for spinal surgery episodes increased costs.