A. A. Drtil1, T. Zhang1, R. Poondla3, L. N. Bockhorn2, M. S. Laughlin3, B. J. Morris3,4,5 1Baylor College Of Medicine,Houston, TX, USA 2University Of Texas Southwestern Medical Center,Dallas, TX, USA 3Fondren Orthopedic Research Institute,Houston, TX, USA 4Fondren Orthopedic Group,Houston, TX, USA 5Texas Education and Research Foundation for Shoulder and Elbow Surgery,Houston, TX, USA
Introduction:
Upper extremity total joint replacement (UETJR) procedures (Diagnosis-related group 484, DRG 484) have been growing in utilization in the past decade and are expected to increase in prevalence with the aging baby-boomer generation. Despite this increase in demand, the average costs for UETJRs have increased yearly. Previous research demonstrates that lower extremity total joint arthroplasty performed at orthopedic specialty hospitals (OSH) are executed at lower surgical costs, readmission rates, and complication rates than non-specialty hospitals (NSH). The purpose of this study is to determine the influence of volume and orthopedic specialization on cost in UETJR procedures.
Methods:
Data was extracted from Centers for Medicare and Medicaid Services (CMS) Inpatient Charge Data, including the procedures, costs, and payments to CMS DRG 484 procedures from 2014-2016.6 An orthopedic specialization ratio (OSR), defined as the ratio of musculoskeletal discharges (DRG 453-565) to total discharges (DRG 001-989), was determined for each hospital. Using this ratio, the hospitals were divided into either Orthopedic Specialty Hospital (OSH = OSR > 0.97) or Non-Specialty Hospital (NSH = OSR ≤ 0.97) groups.3 Average Medicare payments (AMP) of DRG 484 were extracted for each hospital that performed at least 10 UETJR procedures. From the 2016 data, hospitals were further subdivided, based on the average number of UETJR discharges for NSH, into high-volume (≥ 40 DRG 484 discharges) or low-volume (< 40 discharges) for volume-dependent analysis. The aforementioned variables were compared between OSH and NSH using ANOVA and paired t-test analysis.
Results:
OSH performed UETJR procedures at lower AMP than NSH in 2014, 2015, and 2016 (all P < .001). Specifically, AMP savings averaged to $2174.64 per surgery at OSH in the years studied. No significant change in AMP was noted among OSH/NSH hospitals with respect to low/high UETJR discharge volume. Comparing the average Medicare payments from 2014 and 2016 between the OSH and NSH groups yielded no significant evolution in the 3-year span (P = 0.123 and P = 0.064, respectively), yet total volume steadily increased by nearly 10,000 discharges per year.
Conclusion:
OSH perform UETJR procedures for Medicare patients at a markedly lower cost than NSH. The data suggests that OSH do not need to perform UETJR procedures at high volume to save CMS significant revenue. Eliminating the 2016 average Medicare payment difference for the UETJR procedures performed at NSH would have saved CMS over $100 million. Facilities and surgeons may consider adopting OSH practices to reduce their UETJR cost and CMS burden.
