Abstract
Introduction
As total knee arthroplasty incidence in the United States continues to increase, health care entities are looking to reform policy to decrease costs while improving efficiency and quality of care. The allocation of hospital and surgeon charges and payments is an important aspect of health care economics, but the trends and relationship between surgeon and hospital charges and payments for knee arthroplasty have not been well examined. The goal of this study is to report trends and variation in hospital charges and payments compared to surgeon charges and payments for total knee arthroplasty in a Medicare population.
Methods
The 5% Medicare sample was used to capture hospital and surgeon charges and payments for total knee arthroplasty from 2005–2014. Two important values were calculated: (1) the charge multiplier (CM) which is the ratio of hospital to surgeon charges, and (2) the payment multiplier (PM), which is the ratio of hospital to surgeon payments. The year to year variation and regional trends in patient demographics, Charlson Comorbidity Index (CCI), length of stay (LOS), CM and PM were evaluated for all patients. Statistical significance of trends was evaluated using student's t-tests. Correlations between the financial multipliers and LOS were evaluated using a Pearson correlation coefficient (r).
Results
117,698 patients were included. Hospital charges were significantly higher than surgeon charges throughout the study period and increased substantially (CM increased from 7.9 to 11.4, p <0.0001) [Fig 1,2]. Hospital payments relative to surgeon payments ratio (PM) followed a similar trend, increasing from 10.0 to 14.6 (p < 0.0001). [Fig 1,2]. Similar trends were noted in all four regions of the US. LOS decreased significantly throughout the study from 3.8 to 2.8 days (p < 0.0001). CCI remained stable over the study period. Both the CM (r2 = −0.90) and PM (r2 = −0.84) were strongly negatively associated with LOS, meaning that as LOS decreased, the ratio of hospital to surgeon charges and payments (CM and PM) paradoxically significantly increased [Fig 3].
Conclusions
Hospital charges and payments relative to surgeon charges and payments have significantly increased for total knee arthroplasty despite stable patient complexity as measured by CCI and decreasing LOS. These results encourage the need for future studies with detailed cost analysis to identify the causes of hospital and surgeon financial malalignment. As healthcare shifts toward value-based care with shared responsibility for outcomes and cost, more closely aligned incentives between hospitals and providers is needed.
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