COMMENTARY

Knee and Hip Replacement Costs Vary Greatly by Region -- Why?

Christin L. Melton, ELS

Disclosures

February 26, 2015

Introduction

Total knee arthroplasty (TKA) and total hip arthroplasty (THA) are among the most common procedures patients in the United States undergo while hospitalized.[1] In 2011, US surgeons performed approximately 645,000 TKAs and 306,000 THAs, excluding revisions.[2] Data suggest that in 2015, they will perform more than 925,000 TKAs and 378,000 THAs.[3]

As the US population ages, experts anticipate that the need for TKA and THA will increase dramatically.[3] By 2020, the number of primary TKAs performed in the United States is predicted to reach almost 1.4 million and the number of THAs is expected to top 510,000.[3]

Concerned about the rapidly growing economic burden of TKAs and THAs, Blue Cross Blue Shield (BCBS) and its independent licensee Blue Health Intelligence (BHI) analyzed BCBS claims data to compare regional costs for both types of joint replacement surgery.[4]

Study Summary

Researchers for BCBS and BHI analyzed three consecutive years of claims data for BCBS health insurance subscribers 18 to 65 years of age who underwent a typical TKA or a typical hip replacement. Eligible claims were those incurred in the 36 months ending July 2013 and paid through September 2013. Claims for individuals who had concurrent Medicare coverage or who had a serious comorbidity, such as cancer or HIV, were excluded from the analysis.

The study determined the average cost of a typical total hip or knee replacement for each of 64 BCBS markets, which encompassed nearly every state in the United States. The estimated cost of each procedure included all claims stemming from the primary surgery and any claims related to presurgical and postsurgical care. In addition, BCBS-BHI analyzed differences in cost between markets and within a market.

The average price of a typical TKA was $31,124, and the average price of a THA was $30,124. However, costs varied substantially between regional markets. Claims incurred for a TKA ranged from $11,317 in Montgomery, Alabama, to $69,654 in New York; claims incurred for a THA ranged from $11,327 in Birmingham, Alabama, to $73,987 in Boston, Massachusetts.

On average, the most expensive market for a patient to undergo either joint replacement procedure was New York, where the mean cost of a TKA was $61,266 and the mean cost of a THA was $59,448. The least expensive market for both procedures was Montgomery, Alabama, where the cost of a TKA averaged $16,097 and the cost of a THA averaged $16,399.

The study showed that costs often varied greatly within a single market. For example, data reflected a 267% difference in price between the least and most expensive TKA in the Dallas, Texas, market; and a 313% difference in price between the least and most expensive THA in the Boston-Worcester, Massachusetts, market.

Conversely, some markets had relatively consistent costs between facilities. The difference between the least and most expensive TKA was only .3% in the Fort Collins-Loveland, Colorado, market; and the difference between the least and most expensive THA was only 1.7% in the Wilmington-Newark, Delaware, market.

The report proposed that the "lack of cost variation within a market can negatively impact consumers when prices are consistently high."

The study did not analyze reasons for the regional variations in cost or whether certain aspects of the joint replacement procedure (eg, price of the implant, facility costs, or surgical fees) were more likely to drive the cost differences observed. The report also did not explore whether any relationship existed between cost and quality.

Comments

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