The Total “Economic Cost” of Revision Total Joint Replacement Surgery in the United StatesRyan M. Graver, MPH; Lisa Da Deppo, PharmD, MPH, MSc; Erik M. Harris, MHA; Shamiram R. Feinglass, MD, MPH, Zimmer, Inc.

IntroductionRevision surgeries impose a burden on the clinical team and patient in the form of patient management and additional hospital stays, respectively. Recent estimates indicate that substantial growth in the number of revision procedures in the US will continue between 2007 and 2013; with a 32% increase in knee procedures and a 23% increase in hip revisions projected during this period.1

Study ObjectiveThe objective was to report the actual economic burden to Medicare and commercial insurance associated with the treatment of patients who require revision total hip (RTHA) and knee Arthroplasty (RTKA) procedures. This research explores the direct economic costs and related healthcare utilization in the United States among the 62% Medicare and 30% commercial insurance patient populations undergoing primary RTHA and RTKA.2

Materials and MethodsData Source. This study is a retrospective, longitudinal database audit with data derived from the Thomson Reuters MarketScan® Commercial Claims and Encounters Database (Commercial Database) and Medicare Supplemental and Coordination of Benefits Database (Medicare Database) from January 1, 2000 through December 31, 2007.

Claims were selected for patients who underwent arthroplasty procedures, identified using the ICD-9 procedure codes, 00.70, 00.71, 00.72, 00.73, 81.53 for RTHA and 00.80, 00.81, 00.82, 00.83, 00.84, 81.55 for RTKA.

Study Population and Sample Selection. For this analysis, patients undergoing revision total joint replacement procedures were examined.

This is an episode-based analysis and a patient could be included in more than one cohort. •

Only adult patients in the databases who had at least 12-months of continuous health plan •enrollment in the pre- and post-arthroplasty period, and did not have any diagnosis for bone cancers, were included in this analysis.

Patients with more than one type of arthroplasty procedure on the index date were excluded. •

For the cost and utilization analysis, episodes were assigned to cohorts depending on the year •of the index arthoplasty, 2003-2006.

Cost and Utilization Variables. The data endpoints were segmented into orthopaedic-related vs. non-orthopaedic-related care for both inpatient and outpatient claims. Cost variables analyzed include: hospital access, in-patient hospital stay, orthopaedic procedures, medications, outpatient drug utilization, specialty provider’s visits and contacts with medical specialty in the 3-year pre-surgery or 3-year post-surgery period.

Costs were extrapolated as reimbursement payment requests made by institution and provider to third party Medicare and commercial payers. Costs were adjusted to December 2007 dollars by multiplying each year’s cost by the Medical Care Consumer Price Index.3

ResultsA total of 7,034 patient records of RTHA and RTKA performed from January 1, 2003 and December 21, 2006 were qualified for analysis.

3,326 patients underwent revision hip replacement surgery, and 3,708 patients underwent •revision knee replacement surgery.

Females comprised the majority of patients undergoing revision total joint replacement (55.2% •hip replacement, 56.8% knee replacement). The mean age was 68.3 (± 12.5) years at the time of RTHA and 67.8 (± 10.4) years at the time of the RTKA.

Examining the mean combined costs and utilization during the first year post-procedure we •observed the following:

Average hospital length of stay was 4.48 days for RTHA and 3.93 days for RTKA. °

During the entire study period, the total inpatient hospitalization cost for all reasons was °$35,164 for RTHA and $36,913 for RTKA (Figure 1).

Healthcare utilization and expenditure increased dramatically in the 1-year post-surgery °period due to arthroplasty and arthroplasty-related costs (Table 1).

The mean orthopaedic related hospitalization cost was $24,878 for RTHA and $25,844 for °RTKA cohorts or 71% and 70% of total costs, respectively.

Total pharmaceutical costs were $23,127 for RTHA and $25,411 for RTKA; of which approx- °imately $3,397 or 15% was orthopaedic related for RTHA and $3,981 or 16% for RTKA.

The total national aggregate direct cost of illness for revision RTHA and RTKA in the year of the index •procedure by payer type is represented in Figure 2 and Figure 3. Costs were adjusted to 2007 dollars. In both RTHA and RTKA Medicare cohorts, increases in costs are likely due to increases in annual reimbursement, however roughly half of the RTKA increase also did appear to be related to volume. In the commercial cohorts, RTHA costs were flat despite a slight increase in volume. Commercial RTKA demonstrated the largest CAGR, of which approximately 70% was driven by increases in volume.

It is estimated that the aggregate national direct cost of orthopaedic related care in the year •patients underwent RTHA increased from $800 million in 2003 to approximately $941 million in 2006 and from $630 million in 2003 to $961million in 2006 for RTKA. The inpatient hospital portion during the year of the index procedure averaged 66% for RTHA and 72% for RTKA, respectively, of the total estimated aggregate costs for each procedure cohort.

the same category of orthopaedic-related hospitalization costs appeared to drive the post-operative costs for primary joint replacement. This analysis was subject to a number of limitations. The results shown were all unadjusted for potential confounders such as age, seriousness of the morbidity status and co-morbidities. Classification error is possible when relying on diagnosis coding of administrative claims data.

This analysis represents the first truly population-based examination of orthopaedic expenditure in the Medicare and commercial insurance populations. With increasing budgetary pressure and increasing numbers of elderly patients who may be seeking these surgeries to relieve their hip and knee problems, reliable and objective quantification of the economic and epidemiologic characteristics of these surgeries is critically needed.

Bibliography1 Millennium Research Group. US markets for large-joint reconstructive implants, 2009.2 Agency for Healthcare Research and Quality. National and state statistics on hospital stays by payer –Medicare, Medicaid, private, uninsured. http://hcupnet.ahrq.gov/.

Accessed 2009 Mar 1. 3 Consumer Price Index Detailed Reports 2000-2007, http://www.bls.gov/cpi/cpi_dr.htm (Medical CPI Averages, 2000 – 4.1%,2001 – 4.6%, 2002 – 4.7%, 2003 – 4.0%,

2004 – 4.4%, 2005 – 4.2%, 2006 – 4.0%, 2007 - 4.4%) 4 Kim S. Changes in surgical loads and economic burden of hip and knee replacements in the US: 1997-2004.Arthritis Rheum 2008 Apr 15;59 (4):481-8.5 Kurtz S, Ong K, Lau E, Mowat F, Halpern M. Projections of primary and revision hip and knee arthroplasty in the United States from 2005 to 2030. J Bone Joint Surg Am 2007

Apr; 89(4):780-5.

AcknowledgmentsDan Huse, PhD, Vice President, Health Care Division, Thomson Reuters, Inc.

MarketScan® is a trademark of Thomson Reuters (Healthcare) Inc.

Discussions/ConclusionsIn 2006, major joint replacements ranked No. 3 in Medicare discharges for all short-stay hospitals.4 The economic burden of revision joint replacements is projected to increase substantially over the next 5 years.4,5 Accordingly, greater insight into the longitudinal costs associated with treatment of these patients should help to inform strategies aimed at cost management.

When comparing costs, this analysis demonstrated patients undergoing revision arthroplasty procedures represented an increase in all costs of 23% for both hip and knee. The index procedure represented a 22% increase in cost of RTHA and a 28% increase in cost for RTKA.

Costs observed in the 2- to 3-year post-surgery period were lower than in the three years prior to the revision joint replacement procedure. This is a different trend than observed in our primary joint arthroplasty analysis (see AAOS poster 271). In revision cohorts, declining orthopaedic-related hospitalization costs during the 2- to 3-year post revision surgery period were observed. In contrast,

Table 1. Mean Costs

3rd year pre

procedureA

2nd year pre

procedureA

1st year pre

procedureA

1st year post

procedureB

2nd year post

procedureB

3rd year post

procedureB

Total

Commercial

Revision THA Cohort

All Causes $14,912 $16,371 $18,154 $47,263 $17,132 $14,386 $128,223

Orthopedic Related $6,804 $6,555 $6,913 $35,018 $6,741 $5,063 $67,095

Revision TKA Cohort

All Causes $19,604 $25,291 $22,244 $25,814 $19,011 $27,410 $139,374

Orthopedic Related $11,101 $12,923 $7,087 $32,124 $6,923 $9,546 $79,704

Medicare

Revision THA Cohort

All Causes $11,951 $13,366 $16,187 $33,181 $15,238 $14,800 $104,722

Orthopedic Related $3,391 $4,747 $5,384 $21,214 $4,419 $3,557 $42,712

Revision TKA Cohort

All Causes $12,776 $15,136 $14,925 $31,336 $15,288 $15,551 $105,012

Orthopedic Related $3,977 $5,693 $4,579 $19,937 $4,143 $3,682 $42,012

Hospital+ $36,913

MD $12,023

Drugs $25,411

Rehabilitation$1,729

Other¨ $33,586

Drugs $23,127

Hospital+ $35,164

Rehabilitation$1,219

MD $11,623

Other¨ $37,878

Figure 1. Combined Medicare & Commercial Direct Costs During Study Period

Total $104,719

$0

$120,000RTHA

Total $113,954

$0

$120,000RTKA

A Includes costs of services rendered prior to the index procedure, for any medcal reason. B Includes costs of services rendered following and including the index procedure, for any medical reason.

Figure 2. Growth in Aggregate National RTHA Annual Costs

$310

$330

$360

$390

$420

$450

$480

$510

$540

$570

$600

2003 Cohort 2004 Cohort

Cost

in M

illio

ns

0

2.5K

5.0K

7.5K

10.0K

12.5K

15.0K

17.5K

20.0K

22.5K

25.0K

Volu

me

2005 Cohort 2006 Cohort

NationalCommercial Cost

NationalCommercial Volume

NationalMedicare Volume

NationalMedicareCost

*Compound Annual Growth Rate (CAGR); the geometric mean growth rate on anannualized basis

CAGR* = 0.08%

CAGR* = -0.30%CAGR* = 7.07%

CAGR* = 1.84%

Figure 3. Growth in Aggregate National RTKA Annual Costs

$250

$280

$310

$340

$370

$400

$430

$460

$490

$520

$550

2003 Cohort 2004 Cohort

Cost

in M

illio

ns

0

2.5K

5.0K

7.5K

10.0K

12.5K

15.0K

17.5K

20.0K

22.5K

25.0K

Volu

me

2005 Cohort 2006 Cohort

NationalCommercial Cost

NationalCommercial Volume

NationalMedicare Volume

NationalMedicareCost

*Compound Annual Growth Rate (CAGR); the geometric mean growth rate on anannualized basis

CAGR* = 12.98%

CAGR* = 4.54%CAGR* = 9.74%

CAGR* = 8.89%

+ Implant related costs included in Hospital costs for both THA & TKA.

¨ Other costs include all medical expenses reimbursed by insurance not categorized in Figure 1, including but not limited to; x-ray, MRI, chiropractic care, etc.

© 2010 Zimmer, Inc. 1002-AE11 2/25/2010 LL