Article | Arthroplasty Today | March 2017

Variation in the Cost of Care for Primary Total Knee Arthroplasties

by Derek A. Haas and Robert S. Kaplan

Abstract

The study examined the cost variation across 29 high-volume U.S. hospitals for delivering a primary total knee arthroplasty without major complicating conditions. Hospital and physician personnel costs were calculated using time-driven activity-based costing. Consumable supply costs, such as the prosthetic implant, were calculated using purchase prices, and post-acute care costs were measured using either internal costs or external claims as reported by each hospital. Despite having similar patient demographics as well as re-admission and complication rates, the average cost of care for total knee arthroplasty across the hospitals varied by a factor of about 2 to 1. Even after adjusting for differences in internal labor cost rates, the hospital at the 90th percentile of cost spent about twice as much as the one at the 10th percentile of cost. The large variation in costs among sites suggests major and multiple opportunities to transfer knowledge about process and productivity improvements that lower costs while simultaneously maintaining or improving outcomes.

Keywords: Cost Management; Performance Productivity; Health Care and Treatment; Health Industry;

Citation:

Haas, Derek A., and Robert S. Kaplan. "Variation in the Cost of Care for Primary Total Knee Arthroplasties." Arthroplasty Today 3, no. 1 (March 2017): 33–37.