Background: Alternative payment models have been proposed for lower extremity joint replacement surgeries to deliver well-coordinated and high quality care. It is speculated that while these payment models may lead to more cost effective care, institutions may “cherry pick” less costly and less complex patients to minimize financial risks.
In this study, we aim to quantify the impact of the factors associated with variation in the total direct cost of index admission for total hip arthroplasty (THA) and total knee arthroplasty (TKA). We also describe the factors associated with discharge to rehabilitation facility after THA/TKA, since post-acute care may account for over a third of the costs in the bundled payment.
Methods: This is a single center, retrospective study at an academic institution. 3,524 patients admitted for THA/TKA (MS-DRG 470), between September 1, 2012 and February 28, 2017 were included. Multivariable generalized estimating equations with a gamma distribution and log link were used to examine the associations between the total direct cost, and three sets of characteristics added sequentially: (a) Patient demographics (Age, sex, race/ethnicity, marital status, insurance, and household income), (b) Medical complexity (Charlson comorbidity index, American Society of Anesthesiologists grade, and All Patient Refined-Severity of Illness or All Patient Refined-Risk of Mortality classification), and (c) Surgical characteristics (Regional or general anesthesia, and the operating time). Multivariable logistic generalized estimating equations were used to examine the association of these characteristics with discharge to rehabilitation facility.
Results: 1,614 patients underwent THA, and 1,910 underwent TKA. Patient demographics and medical complexity accounted for 13.2% of the cost variation for index admission for THA, and 9.6% for TKA. Combined, patient demographics, medical complexity, and surgical characteristics accounted for 50.3% of the cost variation for index admission for THA, and 44.9% for TKA.
29.4% patients were discharged to rehabilitation facility. Patients who were older, female, or more medically complex were more likely to be discharged to rehabilitation facility after THA/TKA.
Conclusions: While patient demographics and medical complexity account for minimal variation in the direct cost of care for index admission for THA/TKA, they were significantly associated with discharge to rehabilitation facility.
Institutions should continue to optimize the type of anesthesia and operating time for reducing the cost of care of the index admission for THA/TKA. Alternate payment models should consider risk adjustment for sub-groups of patients to account for variation in the discharge disposition.