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Episode of Care Payments in Total Joint Arthroplasty and Cost Minimization Strategies.

ABSTRACT: Total joint arthroplasty (TJA) is receiving significant attention in the US health care system for cost containment strategies. Specifically, payer organizations have embraced and are implementing bundled payment schemes in TJA. Consequently, hospitals and providers involved in the TJA care cycle have sought to adapt to the new financial pressures imposed by episode of care payment models by analyzing what components of the total "event" of a TJA are most essential to achieve a good outcome after TJA. As part of this review, we analyze and discuss a health economic study by Snow et al. As part of their study, the authors aimed to understand the association between preoperative physical therapy (PT) and post-acute care resource utilization, and its effect on the total cost of care during total joint arthroplasty. The purpose of this current review therefore is to (1) describe and analyze the findings presented by Snow et al. and (2) provide a framework for analyzing and critiquing economic analyses in orthopedic surgery. The study under review, while having important strengths, has several notable limitations that are important to keep in mind when making policy and coverage decisions. We support cautious interpretation and application of study results, and we encourage maintained attention to economic analysis in orthopedics as well as continued care path redesign to maximize value for patients and health care providers.

SUBMITTER: Nwachukwu BU

PROVIDER: S-EPMC4733696 | biostudies-literature | 2016 Feb

REPOSITORIES: biostudies-literature

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Episode of Care Payments in Total Joint Arthroplasty and Cost Minimization Strategies.

Nwachukwu Benedict U BU O'Donnell Evan E McLawhorn Alexander S AS Cross Michael B MB

HSS journal : the musculoskeletal journal of Hospital for Special Surgery 20150902 1

Total joint arthroplasty (TJA) is receiving significant attention in the US health care system for cost containment strategies. Specifically, payer organizations have embraced and are implementing bundled payment schemes in TJA. Consequently, hospitals and providers involved in the TJA care cycle have sought to adapt to the new financial pressures imposed by episode of care payment models by analyzing what components of the total "event" of a TJA are most essential to achieve a good outcome afte ...[more]

PMID: 26855635

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Project description:BackgroundTotal joint arthroplasty (TJA) has been identified as a procedure with substantial variations in inpatient and postacute care payments. Most studies in this area have focused primarily on the Medicare population and rarely have characterized the younger commercially insured populations. Understanding the inpatient and postdischarge care service-component differences across 90-day episodes of care and factors associated with payments for younger patients is crucial for successful implementation of bundled payments in TJA in non-Medicare populations.Purpose(1) To assess the mean total payment for a 90-day primary TJA episode, including the proportion attributable to postdischarge care, and (2) to evaluate the role of procedure, patient, and hospital-level factors associated with 90-day episode-of-care payments in a non-Medicare patient population younger than 65 years.MethodClaims data for 2008 to 2013 from Blue Cross Blue Shield of Texas were obtained for primary TJAs. A total of 11,131 procedures were examined by aggregating payments for the index hospital stay and any postacute care including rehabilitation services and unplanned readmissions during the 90-day postdischarge followup period. A three-level hierarchical model was developed to determine procedure-, patient-, and hospital-level factors associated with 90-day episode-of-care payments.ResultsThe mean total payment for a 90-day episode for TJA was USD 47,700 adjusted to 2013 USD. Only 14% of 90-day episode payments in our population was attributable to postdischarge-care services, which is substantially lower than the percentage estimated in the Medicare population. A prolonged length of stay (rate ratio [RR], 1.19; 95% CI, 1.15-1.23; p ? 0.001), any 90-day unplanned readmission (RR, 1.64; 95% CI, 1.57-1.71; p ? 0.001), computer-assisted surgery (RR, 1.031; 95% CI, 1.004-1.059; p ? 0.05), initial home discharge with home health component (RR, 1.029; 95% CI, 1.013-1.046; p ? 0.001), and very high patient morbidity burden (RR, 1.105; 95% CI, 1.062-1.150; p ? 0.001) were associated with increased TJA payments. Hospital-level factors associated with higher payments included urban location (RR, 1.29; 95% CI, 1.17-1.42; p ? 0.001), lower hospital case mix based on average relative diagnosis related group weight (RR, 0.94; 95% CI, 0.89-0.95; p ? 0.001), and large hospital size as defined by total discharge volume (RR, 1.082; 95% CI, 1.009-1.161; p ? 0.05). All procedure, patient, and hospital characterizing factors together explained 11% of variation among hospitals and 49% of variation among patients.ConclusionInpatient care contributed to a much larger proportion of total payments for 90-day care episodes for primary TJA in our younger than 65-year-old commercially insured population. Thus, inpatient care will continue to be an essential target for cost-containment and delivery strategies. A high percentage of hospital-level variation in episode payments remained unexplained by hospital characteristics in our study, suggesting system inefficiencies that could be suitable for bundling. However, replication of this study among other commercial payers in other parts of the country will allow for conclusions that are more robust and generalizable.Level of evidenceLevel II, economic analysis.

Project description:BackgroundTotal joint arthroplasty (TJA), although considered to be highly beneficial, is associated with substantial costs to the US healthcare system. Cost utility analysis has become an increasingly important means to objectively evaluate the value of a healthcare intervention from the perspective of both extending the quantity and improving the quality of life. Relatively little is known about the overall cost utility analysis evidence base in TJA.Questions/purposesThe goals of this review were to (1) determine the cost utility of TJA interventions; (2) critically assess the quality of published US-based cost utility analyses using the Quality of Health Economic Studies instrument; and (3) determine what characteristics were common among studies receiving a high quality score.MethodsA systematic review of the literature using the MEDLINE database was performed to compile findings and critically appraise US-based cost utility analysis studies for total hip and knee arthroplasty. Based on review of 676 identified articles, 23 studies were included. We used the Quality of Health Economic Studies instrument to assess study quality and one-sided Fisher's exact tests were applied to analyze the predictors of high-quality cost utility analysis.ResultsVery few studies compare the cost utility of TJA versus nonoperative intervention; however, the available evidence suggests that TJA can be cost-saving and is highly cost-effective compared with conservative management of end-stage arthritis. The majority of identified studies are focused on the cost utility of new implant technologies or comparisons among surgical alternatives. These studies suggest that the upfront costs associated with new technologies are cost-effective when there is a major reduction in a future cost. The quality of identified studies is quite high (Quality of Health Economic Studies Instrument score: mean 86.5; range, 63-100). National funding source (p = 0.095) and lifetime horizon for analysis (p = 0.07) correlate with high-quality evidence but do not reach significance.ConclusionsOver the past 15 years, there has been a major increase in the volume of cost utility analyses published in total hip and knee arthroplasty. The quality of cost utility analyses published during that period is good. As increasing attention is paid to value in US health care, more attention should be paid to understanding the cost utility of TJA compared with nonoperative treatment modalities. Future studies may also look to incorporate patient willingness to pay.

Dataset Information

Episode of Care Payments in Total Joint Arthroplasty and Cost Minimization Strategies.

Publications

Episode of Care Payments in Total Joint Arthroplasty and Cost Minimization Strategies.

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