Exploring Economic Issues in Total Joint Arthroplasty

    Because the way in which orthopaedic surgeons are compensated for managing total joint arthroplasty patients continues to evolve, ICJR devoted an entire session to economic issues at the recent 11th Annual Winter Hip & Knee Course.

    The session featured presentations from Walter B. Beaver Jr., MD; William J. Hozack, MD; William J. Long, MD, FRCSC; Gwo-Chin Lee, MD; and Richard W. McCalden, MD, FRCSC, who explored various aspects of reimbursement, including:

    • Bundled payments
    • Strategies to reduce implant costs
    • Assessment of patient risk
    • Cost-effectiveness of joint replacement
    • Post-acute care costs

    Private Bundles: Where We Are Going

    Walter B. Beaver Jr., MD, shared the experience of his practice, OrthoCarolina Hip & Knee Center in Charlotte, North Carolina, with commercial bundles for hip and knee arthroplasty, including the steps he and his colleagues have taken to ensure that they maintain, or even improve patient outcomes as they decrease spending. He discussed:

    • How they determine if a patient will be in a bundle
    • How they assess risk and optimize patients before surgery
    • How they communicate across the continuum of care
    • How they manage post-acute services

    Click the image above to watch Dr. Beaver’s presentation and learn more about commercial bundles for joint replacement patients, including differences between commercial and Medicare bundles.

    BCPI from the Rothman Perspective

    In 2015, surgeons from The Rothman Institute in Philadelphia, Pennsylvania, began participating in the voluntary Bundled Payments for Care Improvement (BPCI) initiative for joint replacement patients with Medicare insurance. Three years and roughly 10,000 patients later, they found that BPCI had no impact on their clinical routine or their billing routine and that they had generated $3 million per year.

    In his presentation on the Rothman experience with BPCI, William J. Hozack, MD, provided background on BPCI, described how he and his colleagues prepared for BPCI and why it worked for them, and discussed the future of value-based care. The bottom line, he said, is that the best financial performance comes from providing the best care for each patient.

    Click the image above to watch Dr. Hozack’s presentation.

    Value-Based Implants and Hospital-Vendor Alignment Advantages

    The cost of implants for joint replacement surgery is 60% higher today than in 2000, despite competition among companies, a near standardization of product lines, and near doubling of procedure volume, William J. Long, MD, FRCSC, from NYU Health and the Insall Scott Kelly Institute in New York, said in his presentation.

    With the increased demand for joint replacement, evolving payment strategies, and decreased reimbursement to providers, now is the time for surgeons to get involved in efforts to reduce implant costs. In his presentation, Dr. Long discussed how this can be accomplished through preferred vendor agreements, rep-less surgeries, use of an in-house technician to manage the implants, reduced implant and tray inventory, and the use of generic implants.

    Click the image above to watch Dr. Long’s presentation and learn how some of these strategies have been implemented at NYU Health.

    Risk Stratification for TJA: Can We Safely Predict Who, Why, When, and Where?

    In 2019, the orthopaedic surgeon’s mantra, said Gwo-Chin Lee, MD, from the University of Pennsylvania in Philadelphia, should be minimize complications, reduce readmissions, and decrease costs for joint replacement surgery. One way to do this is to adopt rapid recovery protocols and consider outpatient surgery when it makes sense. Dr. Lee concluded that:

    • Preoperative patient selection and education are critical to minimizing complications and patient dissatisfaction.
    • Preoperative optimization of modifiable risk factors can potentially decrease the risks from surgery.
    • Risk stratification before elective joint replacement can help anticipate hospital resource allocation and discharge disposition.

    Click the image above to watch Dr. Lee’s presentation.

    Is Joint Replacement Cost-Effective in the Obese and Morbidly Obese Patient?

    Patients who are obese have been found to be at higher risk for some complications of joint replacement surgery, but they also do as well as non-obese patients in terms of outcomes, such as pain reduction and improved function. Ninety-day costs are also higher, according to research from Richard W. McCalden, MD, FRCSC, and his colleagues from the London Health Sciences Center in London, Ontario, Canada, but again, outcomes are similar in obese and non-obese patients. [1,2]

    What was not clear from this research, Dr. McCalden said in his presentation, is whether joint replacement is cost-effective in obese and morbidly obese patients, whether there should be a cut-off for BMI in joint replacement patients, and whether providers should receive greater reimbursement for managing patients with a high BMI.

    Click the image above to watch Dr. McCalden’s presentation, during which he described the Markov model he and his colleagues used to answer the question of cost-effectiveness in obese patients. [3,4]

    Minimizing Post-Acute Discharge Costs

    Controlling costs associated with joint replacement surgery means controlling what goes on across the entire continuum of care for the hip or knee arthroplasty patient, from initial visit to post-discharge management. In his second presentation of the session, William J. Hozack, MD, from The Rothman Institute in Philadelphia, Pennsylvania, reviewed strategies for decreasing costs, including:

    • Reducing avoidable complications, readmissions, and reoperations by understanding how decisions about operating on certain patients could increase costs
    • Avoiding inappropriate variation in care by developing protocols that are based on consensus and/or evidence (if available), communicated to the entire team, and updated on a regular basis
    • Avoiding excessive costs of post-discharge care – physical therapy, home healthcare, inpatient rehabilitation, and skilled nursing facilities – due to variations in pricing
    • Understanding what care is unnecessary and what care is really needed during the entire perioperative period

    Click the image above to watch Dr. Hozack’s presentation and learn more about research he and his colleagues have done on reducing costs of post-discharge disposition and care. [5,6]


    Dr. Beaver, Dr. Long, Dr. Lee, and Dr. McCalden have no disclosures relevant to their presentations. Dr. Hozack has disclosed that he has stock or stock options in Force Therapeutics.


    1. Sisko ZW, Vasarhelyi EM, Somerville LE, Naudie DD, MacDonald SJ, McCalden RW. Morbid obesity in revision total knee arthroplasty: a significant risk factor for re-operation. J Arthroplasty. 2019 Jan 14. pii: S0883-5403(19)30037-3. doi: 10.1016/j.arth.2019.01.010. [Epub ahead of print]
    2. Ponnusamy KE, Marsh JD, Somerville LE, McCalden RW, Vasarhelyi EM. Ninety-day costs, reoperations, and readmissions for primary total hip arthroplasty patients of varying body mass index levels. J. Arthroplasty. 2019 Mar;34(3):433-438. doi: 10.1016/j.arth.2018.11.027. Epub 2018 Nov 24.
    3. Ponnusamy KE, Vasarhelyi EM, McCalden RW, Somerville LE, Marsh JD. Cost-effectiveness of total hip arthroplasty versus nonoperative management in normal, overweight, obese, severely obese, morbidly obese, and super obese patients: a Markov model. J Arthroplasty. 2018 Dec;33(12):3629-3636. doi: 10.1016/j.arth.2018.08.023. Epub 2018 Aug 24.
    4. Ponnusamy KE, Vasarhelyi EM, McCalden RW, Somerville LE, Marsh JD. Cost-effectiveness of total knee arthroplasty vs nonoperative management in normal, overweight, obese, severely obese, morbidly obese, and super-obese patients: a Markov model. J Arthroplasty. 2018 Jul;33(7S):S32-S38. doi: 10.1016/j.arth.2018.02.031. Epub 2018 Feb 14.
    5. Austin MS, Urbani BT, Fleischman AN, et al. Formal physical therapy after total hip arthroplasty is not required: a randomized controlled trial. J Bone Joint Surg Am. 2017 Apr 19;99(8):648-655. doi: 10.2106/JBJS.16.00674.
    6. Klement MR, Rondon AJ, McEntee RM, Greenky MR, Austin MS. Web-based, self-directed physical therapy after total knee arthroplasty is safe and effective for most, but not all, patients. J Arthroplasty. 2018 Dec 3. pii: S0883-5403(18)31168-9. doi: 10.1016/j.arth.2018.11.040. [Epub ahead of print]