Orthopedics

Feature Article 

Projected Medicare Savings Associated With Lowering the Risk of Total Hip Arthroplasty Revision: An Administrative Claims Data Analysis

Stacey J. Ackerman, PhD; Tyler Knight, MS; Peter M. Wahl, ScD

Abstract

In the United States, demand for total hip arthroplasty (THA) and THA revision procedures are increasing due to an aging population, a longer life expectancy, and an increasing prevalence of osteoarthritis. This retrospective cohort study identified patients 65 years and older in the Medicare 5% Standard Analytic Files who underwent THA for osteoarthritis between January 1, 2009, and September 30, 2010. The authors estimated the 5-year cumulative revision risk (CRR) using the Kaplan–Meier method, revision-related complications, and Medicare expenditures. Using a 6.22% compound annual growth rate from the Healthcare Cost and Utilization Project of the Agency for Healthcare Research and Quality, the authors estimated the number of THAs that will be performed from 2018 to 2027 and calculated the 10-year projected savings to Medicare for a 1% reduction in CRR. Among 7820 patients, the mean age was 74.4 years, and 62.4% were female. Cumulative revision risk was 4.2% at 5 years (through September 30, 2015), with 30.8% of revisions occurring within 90 days of the THA. At least 24.4% of revision patients had a complication. Median revision inpatient stay and episode of care (through 90 days) expenditures were $23,847 and $36,157, respectively. With a 1% absolute reduction in CRR, Medicare could save $697 million over a 10-year period, or $985 million when including Medicare Advantage, which represented 29.2% of 2016 Medicare payments. Strategies to reduce the risk of THA revision, such as the use of implant constructs with lower CRR and value-based payment models, are needed to achieve Medicare payment reductions while maintaining or improving quality of care for Medicare beneficiaries. [Orthopedics. 2019; 42(1):e86–e92.]

Abstract

In the United States, demand for total hip arthroplasty (THA) and THA revision procedures are increasing due to an aging population, a longer life expectancy, and an increasing prevalence of osteoarthritis. This retrospective cohort study identified patients 65 years and older in the Medicare 5% Standard Analytic Files who underwent THA for osteoarthritis between January 1, 2009, and September 30, 2010. The authors estimated the 5-year cumulative revision risk (CRR) using the Kaplan–Meier method, revision-related complications, and Medicare expenditures. Using a 6.22% compound annual growth rate from the Healthcare Cost and Utilization Project of the Agency for Healthcare Research and Quality, the authors estimated the number of THAs that will be performed from 2018 to 2027 and calculated the 10-year projected savings to Medicare for a 1% reduction in CRR. Among 7820 patients, the mean age was 74.4 years, and 62.4% were female. Cumulative revision risk was 4.2% at 5 years (through September 30, 2015), with 30.8% of revisions occurring within 90 days of the THA. At least 24.4% of revision patients had a complication. Median revision inpatient stay and episode of care (through 90 days) expenditures were $23,847 and $36,157, respectively. With a 1% absolute reduction in CRR, Medicare could save $697 million over a 10-year period, or $985 million when including Medicare Advantage, which represented 29.2% of 2016 Medicare payments. Strategies to reduce the risk of THA revision, such as the use of implant constructs with lower CRR and value-based payment models, are needed to achieve Medicare payment reductions while maintaining or improving quality of care for Medicare beneficiaries. [Orthopedics. 2019; 42(1):e86–e92.]

Demand for total hip arthroplasty (THA) in the United States continues to grow due to an aging population, a longer life expectancy, more active lifestyles, and an increasing prevalence of osteoarthritis (OA).1–4 Patients leading longer, more active lives may increasingly face the need for THA revision because of added wear, soft tissue reactions from wear particles (and, with metal implants, local/systemic responses), and potential for prosthesis failure.1–3,5 Because of these demographic and behavioral changes, the incidence of THA revisions in the United States is increasing.2 Recent studies by Bozic et al6 and Badarudeen et al7 reported 5-year revision risks of 5.11% and 5.71%, respectively, among Medicare beneficiaries who underwent THA from 1998 to 2011.

Compared with primary THA, revisions are associated with more complications, longer operating times and postoperative hospital stays, and a higher likelihood of 90-day hospital readmission.8–10 Further, risk of subsequent revision within 10 years of surgery is up to 4 times higher for THA revision than for primary THA.8,11,12

Total hip arthroplasty revision is also associated with substantial costs to payers,10,13,14 with the revision hospitalization, readmission hospitalization, and skilled nursing facility as the primary cost drivers.10 Overall, the total cost of THA revision in the United States is projected to reach $4.01 billion by 2030.13

Given the increasing volume of THA revisions and associated economic burden, the authors aimed to estimate the 5-year cumulative risk of revision following primary THA in a Medicare population, quantify Medicare expenditures for THA revision, describe the complications (including mortality) occurring within 90 days of THA revision, and estimate the 10-year projected savings to Medicare associated with a 1% absolute reduction in THA revision risk to help inform Medicare payment policy. To the authors' knowledge, this is the first study to estimate—using real-world evidence—the projected savings to Medicare by reducing THA revision risk.

Materials and Methods

Study Design and Data Source

The authors conducted a retrospective cohort study using data from Medicare 5% Standard Analytic Files to determine the revision risk following primary THA for OA. The Medicare 5% Standard Analytic Files are composed of final-action deidentified, longitudinal, claim-level files, representing all claims for a random sample of 5% of Medicare beneficiaries in a given year.

Study Population

The study included patients with 1 or more medical claims between January 1, 2009, and September 30, 2010, for THA (International Classification of Diseases, Ninth Revision, Clinical Modification [ICD-9-CM] procedure code 81.51) with a primary diagnosis of OA (ICD-9-CM 715.15, 715.35, or 715.95) recorded on the primary THA procedure claim. Patients who were not US residents, were younger than 65 years as of the date of the primary THA (index date), had more than 1 THA revision (ICD-9-CM 81.53, 00.70, 00.71, 00.72, or 00.73) following discharge from the primary THA admission, and had metal-on-metal bearing surface (ICD-9-CM 00.75) recorded on the index date were excluded. For the cost analysis, patients with revisions recorded during the primary THA inpatient stay were excluded because of the difficulty of proper attribution of costs.

Study Outcomes

Total hip arthroplasty revision was defined as 1 or more medical claims for THA revision during the post-THA follow-up period (through September 30, 2015).

The authors calculated Medicare expenditures as the reimbursement amounts for the THA revision inpatient stay and the THA revision episode of care (inpatient stay plus 90 days reflecting the global period for Medicare bundled payment). Patient-paid coinsurance, copayment, and deductible amounts were not included. Site-of-care–specific expenditures for the revision episode of care were calculated for each of the following settings: hospital acute inpatient (Part A), physician services (Part B), durable medical equipment, hospital outpatient department, skilled nursing facility, home health, rehabilitation and long-term care hospital stays, and hospice.

To assess THA revision-related complications, the authors identified infections (ICD-9-CM 996.66, 996.67, 996.69, 998.51, or 998.59) and other complications (ICD-9-CM 998.12, 998.30, 998.31, 998.32, 998.51, or 998.83) from the THA revision admission date through 90 days after discharge.

Statistical Methods

Descriptive statistics were used to describe patient demographics and clinical characteristics. Means, medians, standard deviations, and minimum and maximum values were calculated for continuous variables. Frequencies and percentages were calculated for categorical variables. For revision risk, the authors estimated the cumulative percent revision at 1, 2, 3, 4, and 5 years after the index date, calculated as 1 minus the time-specific survival estimates using the Kaplan–Meier method. The authors calculated time to revision as the number of days between the primary THA hospitalization discharge date and the THA revision admission date.

Medicare expenditures for the THA revision inpatient stay were calculated as the sum of all medical claims during the entire THA revision hospitalization. Expenditures associated with the THA revision episode of care were calculated as the sum of reimbursement amounts for all claims during the inpatient THA revision hospitalization and during the 90-day period following THA revision discharge. Site-specific expenditures included medical claims during the THA revision episode of care with the respective place of service recorded.

Using THA inpatient stay and episode of care payments, the authors extrapolated expenditures and projected savings in the 5% sample to the entire Medicare population. They multiplied the respective estimated median per-revision expenditures by the number of patients having a THA revision annually on average and then multiplied that result by 20.

Using a 6.22% compound annual growth rate for THAs performed in the United States, as estimated using the 2009–2014 data from the Healthcare Cost and Utilization Project of the Agency for Healthcare Research and Quality,15 the authors projected the number of THAs expected to be performed from 2018 to 2027 and calculated the projected savings to Medicare for a 1% absolute reduction in the 5-year revision risk. Estimated savings attributable to the revisions averted with a 1% absolute reduction in risk were calculated as follows: (the number of THAs projected during the 2018–2027 time period) × (1%) × (median expenditure for revision episode of care). Expenditures were inflated to 2016 US dollars using the medical care component of the Consumer Price Index.16 Analyses were performed using SAS version 9.3 statistical software (SAS Institute, Cary, North Carolina).

Results

In total, 7820 patients 65 years and older underwent THA for OA during the study (Figure 1). Mean age was 74.4 years (Table 1), and most patients were female (62.4%) and white (94.0%).

Selection of the study sample. Abbreviations: MoM, metal-on-metal; OA, osteoarthritis; THA, total hip arthroplasty; US, United States.

Figure 1:

Selection of the study sample. Abbreviations: MoM, metal-on-metal; OA, osteoarthritis; THA, total hip arthroplasty; US, United States.

Patient Demographic and Clinical Characteristics (N=7820)

Table 1:

Patient Demographic and Clinical Characteristics (N=7820)

Overall, 344 of 7820 (4.4%) Medicare beneficiaries underwent THA revisions (with placement of 1 or more components) during the follow-up period. Among THA revisions, 106 (30.8%) occurred within 90 days of the primary THA. The remaining 238 (69.2%) occurred 91 or more days after the primary THA. The observed cumulative risk of THA revision increased by approximately 0.5% annually, from 2.2% at 1 year to 4.2% at 5 years (Table 2). Mechanical complication (25.3%), dislocation (18.3%), fracture (17.7%), and mechanical loosening (14.5%) accounted for three-quarters of all reasons for revision during the 5-year follow-up period. Early revisions (within 1 year following the primary THA) were predominantly due to fractures (23.4%) and dislocations (21.6%), whereas later revisions (years 2 to 5) were most often due to mechanical complications (38.7%) (Table 3). Revisions for treatment of periprosthetic joint infection after THA are often 2-stage, with 3.2% of the 344 THA revisions representing a second stage with placement of new components.

Cumulative Risk of THA Revisiona

Table 2:

Cumulative Risk of THA Revision

Reasons for THA Revision, Reported as the Primary Diagnosis on THA Revision Insurance Claim

Table 3:

Reasons for THA Revision, Reported as the Primary Diagnosis on THA Revision Insurance Claim

Among those with THA revision, 84 (24.4%) had 1 or more of the evaluated THA revision–related complications: infection and inflammatory reaction due to internal joint prosthesis (n=59, 17.2%); other postoperative infection (n=28, 8.1%); infection and inflammatory reaction due to other internal orthopedic or prosthetic device, implant, or graft (n=19, 5.5%); surgical wound non-healing or disruption (n=17, 4.9%); and hematoma or seroma (n=15, 4.4%).

Mean Medicare expenditure per inpatient stay for patients who underwent a THA revision was $24,562; the median was $23,847 (Table 4). The mean and median Medicare expenditure per episode of care were $39,274 and $36,157, respectively. Mean total Medicare expenditures per episode of care for THA revision were distributed across the following settings of care: hospital acute inpatient (60.9%), skilled nursing facility (17.0%), physician and other professional (10.8%), home health (7.1%), rehabilitation and long-term care hospital stays (2.2%), hospital outpatient department (1.9%), and durable medical equipment (0.2%).

Medicare Expenditures Associated With THA Revision Inpatient Stay and Episode of Care (2016 US Dollars)

Table 4:

Medicare Expenditures Associated With THA Revision Inpatient Stay and Episode of Care (2016 US Dollars)

Extrapolating to all Medicare beneficiaries, total expenditures incurred by Medicare for the THA revision inpatient stay and episode of care were approximately $87,756,960 annually and $133,057,760 annually, respectively. With 1,928,852 THAs expected to be performed between 2018 and 2027, and 19,289 revisions averted if the 5-year cumulative risk were reduced by 1%, the authors estimate that Medicare (as the primary payer) could achieve $697,432,373 in savings during the next decade, or up to $985 million when Medicare Advantage is included.

Discussion

This retrospective cohort analysis used Medicare claims data to estimate the cumulative risk of, and Medicare spending associated with, THA revision. The authors observed a cumulative 4.2% risk of revision over 5 years among patients who underwent a primary THA between January 2009 and September 2010. A substantial percentage (30.8%) of revisions occurred within 90 days of the primary THA. Almost one-fourth (24.4%) of patients undergoing revision experienced 1 or more of the evaluated complications following the revision. On the basis of observed expenditures for the THA revision episodes of care, the authors estimate Medicare could save approximately $697 million over a 10-year period if a 1% absolute reduction in THA revision risk were achieved.

The observed 1-year revision risk (2.2%) is consistent with findings reported by Bozic et al6 (2.4%), who analyzed Medicare 5% Standard Analytic Files data from 2008 to 2010. The 4.2% 5-year cumulative revision risk the authors observed is slightly lower than that reported by Bozic et al6 (5.1%) and Badarudeen et al7 (5.7%) for Medicare beneficiaries, likely because they included certain metal-on-metal bearing surfaces with increased revision risks.17

In contrast, an Australian patient registry reported 5-year cumulative percent revision for primary total conventional hip replacement for OA at 2.9% and 3.1% among patients 65 to 74 years and 75 years and older, respectively, when large head metal-on-metal prostheses were excluded,18 which suggests that a 1% absolute reduction in 5-year cumulative risk of THA revision (from 4.2% to 3.2%) is feasible among Medicare beneficiaries. Beyond 5 years, patients can experience loosening from wear particles and develop late instability. In the Australian patient registry's 2017 annual report, the 10-year revision rate ranged from 3.4% for hip implants with ceramicized metal (oxidized zirconium)-on-cross-linked polyethylene to 12.5% with ceramicized metal/non–cross-linked polyethylene.18

Differences in clinical practice and health care systems may have contributed to differences in reported revision risk between the current study and the Australian registry. Nonetheless, these findings highlight the potential for reduction in THA revision risk among Medicare beneficiaries with vigilant patient selection, protocols, technological and biological improvements, and better construct survivorship.13,19 In the United States, benchmarking outcomes associated with various implant constructs is feasible with existing codes.

The most common THA revision complications among those analyzed in this study were infections and inflammatory reactions due to internal joint prostheses (17.2%), which is consistent with findings of Badarudeen et al7 (17.3% in Medicare population) and Nichols and Vose10 (16% in private payer population). The current authors analyzed a subset of complications; as such, the observed 24.4% of patients who experienced THA revision–related complications is conservative.

Estimated Medicare expenditures, per inpatient stay and per episode of care, were similar to other previously published estimates of THA revision costs10,14 after adjusting charges to Medicare expenditures and omitting patient liability (coin-surance, copayments, and deductibles).

Total reimbursement and potential cost savings to Medicare in the current study does not include Medicare Advantage, which represents approximately one-third of Medicare beneficiaries.20 Including Medicare Advantage, which represented approximately 29.2% of total Medicare benefit payments in 2016,21 Medicare could save $985 million during the next decade with a 1% absolute reduction in cumulative revision risk.

This study had several limitations. With the focus on Medicare, the authors did not include patient and caregiver costs (eg, copays, medication expenses, travel expenses, or lost productivity). The authors anticipate that both patients and their caregivers would similarly realize substantial cost savings associated with a lower THA revision risk.

Additionally, the authors excluded patients with 1 or more THA revisions because 90-day episodes of care for such patients may overlap and could have limited their ability to separate costs for each revision. Given that each revision procedure is associated with a higher risk of morbidity and mortality compared with previous surgeries,8–10 this exclusion may have resulted in underestimating the cumulative risk of revision and the associated costs. The authors also excluded patients who underwent primary THA with large head metal-on-metal bearing surface, in light of the extensive device recalls22 and the US Food and Drug Administration's 2016 final order that manufacturers submit a premarket approval application to continue marketing their metal-on-metal devices.23 Similarly, for the cost analysis, the authors excluded 18 patients who had revisions during the same inpatient stay as the primary THA, because it is not possible to separate the costs for the primary THA from those for the THA revision using claims data. The authors recognize the potential for coding irregularities in the Medicare claims data. Nonetheless, the authors used reimbursement codes in the current study that are consistent with similar US claims database analyses.10,14

Finally, all-cause claims were used to estimate episode of care costs, including claims for comorbid conditions that may have been unrelated to the revision. To address this, Medicare spend extrapolations and projections used the median episode of care expenditures, which were lower than the mean expenditures.

In this study, nearly one-third of the THA revisions occurred during the 90-day global period for the primary THA. In an era of bundled payment, hospitals are at increased financial risk for costly revisions. As the value-based payment paradigm continues to emerge, providers will be rewarded for quality and efficiency of care. The Centers for Medicare & Medicaid Services recently solicited public comment on the possible removal of THA procedures from the inpatient-only list.24 Using evidence-based patient selection to identify the subset of Medicare beneficiaries without significant comorbidities who could safely undergo such procedures, including THA revision, on a hospital outpatient basis has the potential for substantial cost savings to the Medicare program, including shorter hospital stays and lower risk of hospital-acquired infections. Although the Bundled Payments for Care Improvement initiative was intended to determine whether bundled payment incentives could reduce Medicare payments while maintaining or improving quality of care (such as lowering readmission rates or emergency department use),25 results to date indicate that hip revision patients who used skilled nursing facilities or home health agency services experienced a decline in the activities of daily living.25 Also, the average standardized payment for hip and knee revision clinical episodes (inpatient stay plus 90 days) was 9.7% ($2878) higher with Bundled Payments for Care Improvement.25 These Bundled Payments for Care Improvement results suggest that alternative strategies are needed beyond bundled payment incentives.

Conclusion

This retrospective cohort study indicated there is a marked risk of revision among Medicare beneficiaries who undergo primary THA, whereby even a modest reduction in revision risk results in large cumulative savings. For every 1% absolute reduction in THA revision risk achieved, nearly 20,000 revisions could be averted over a 10-year period, with Medicare saving up to $697 million, or $985 million when Medicare Advantage is included. Strategies to reduce the risk of THA revision, such as the use of implant constructs with lower revision risk and value-based payment models, are needed to achieve Medicare payment reductions while maintaining or improving quality of care for Medicare beneficiaries.

References

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  3. Lubbeke A, Zimmermann-Sloutskis D, Stern R, et al. Physical activity before and after primary total hip arthroplasty: a registry-based study. Arthritis Care Res (Hoboken). 2014;66(2):277–284. doi:10.1002/acr.22101 [CrossRef]
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  6. Bozic KJ, Ong K, Kurtz S, et al. Short-term risk of revision THA in the Medicare population has not improved with time. Clin Orthop Relat Res. 2016;474(1):156–163. doi:10.1007/s11999-015-4520-6 [CrossRef]
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  10. Nichols CI, Vose JG. Clinical outcomes and costs within 90 days of primary or revision total joint arthroplasty. J Arthroplasty. 2016;31(7):1400–1406. doi:10.1016/j.arth.2016.01.022 [CrossRef]
  11. National Joint Replacement Registry. Hip, knee and shoulder arthroplasty: annual report 2016. https://aoanjrr.sahmri.com/documents/10180/275066/Hip%2C%20Knee%20%26%20Shoulder%20Arthroplasty. Published December 2015. Accessed December 2, 2017.
  12. Australian Orthopaedic Association National Joint Replacement Registry. 2016 annual report: supplementary reports. https://aoanjrr.sahmri.com/annual-reports-2016/supplementary. Accessed December 2, 2017.
  13. Burns AWR, Bourne RB. Economics of revision total hip arthroplasty. Orthop and Trauma. 2006;20(3):203–207.
  14. Gwam CU, Mistry JB, Mohamed NS, et al. Current epidemiology of revision total hip arthroplasty in the United States: national in-patient sample 2009 to 2013. J Arthroplasty. 2017;32(7):2088–2092. doi:10.1016/j.arth.2017.02.046 [CrossRef]
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  20. Jacobson G, Casillas G, Damico A, et al. Medicare Advantage 2016 spotlight: enrollment market update. https://www.kff.org/medicare/issue-brief/medicare-advantage-2016-spotlight-enrollment-market-update. Accessed November 14, 2017.
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  24. Hospital Outpatient Prospective Payment—Notice of Final Rulemaking (NFRM) with comment period. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices-Items/CMS-1678-FC.html. Accessed November 15, 2017.
  25. Lewin Group. CMS Bundled Payments for Care Improvement initiative models 2–4: year 3 evaluation & monitoring annual report. https://downloads.cms.gov/files/cmmi/bpci-models2-4yr3evalrpt.pdf. Published October 2017. Accessed December 10, 2017.

Patient Demographic and Clinical Characteristics (N=7820)

CharacteristicValue
Age, mean (SD), ya74.4 (6.33)
Female, No. (%)4883 (62.4)
Race, No. (%)
  White7352 (94.0)
  Black331 (4.2)
  Other137 (1.8)
Total hip arthroplasty revision subcategory, No. (%)b
  Major partialc151 (43.9)
  Major totald117 (34.0)
  Minore53 (15.4)

Cumulative Risk of THA Revisiona

ProcedureNo. of PatientsbTime, Cumulative Percent Revision (95% CI)

1 year2 years3 years4 years5 years
THA revision3442.2% (1.90%–2.55%)2.7% (2.37%–3.10%)3.2% (2.85%–3.64%)3.7% (3.33%–4.18%)4.2%c (3.74%–4.64%)

Reasons for THA Revision, Reported as the Primary Diagnosis on THA Revision Insurance Claim

ReasonaNo. (%)

Revision Within 5 YearsRevision Within 1 YearRevision in 2 to 5 Years
Mechanical complication87 (25.3)20 (11.7)67 (38.7)
Dislocation63 (18.3)37 (21.6)26 (15.0)
Fracture61 (17.7)40 (23.4)21 (12.1)
Mechanical loosening50 (14.5)20 (11.7)30 (17.3)
Infection and inflammatory reaction30 (8.7)19 (11.1)11 (6.4)
Osteoarthrosis25 (7.3)bb
Acquired deformities of hipc11 (3.2)bb
Other17 (4.9)35b(20.5)b18b(10.4)b
Total344 (100.0)d171 (100.0)173 (100.0)d

Medicare Expenditures Associated With THA Revision Inpatient Stay and Episode of Care (2016 US Dollars)

THA RevisionMedicare Expenditure (N=322)a
Inpatient stay
  Mean (SD)$24,562 ($7647)
  Median (range)$23,847 ($223–$55,902)
Episode of careb
  Mean (SD)$39,274 ($16,663)
  Median (range)$36,157 ($319–96,688)
Authors

The authors are from Covance Market Access Services Inc (SJA), San Diego, California; and Covance Market Access Services Inc (TK, PMW), Gaithersburg, Maryland.

Dr Ackerman is a paid consultant for Smith & Nephew. Mr Knight is a paid consultant for Smith & Nephew. Dr Wahl is a paid consultant for Smith & Nephew.

This study was sponsored by Smith & Nephew.

The authors thank Ningqi Hou, PhD, formerly of Covance Market Access Services Inc, for her contributions to the statistical analysis plan; Rachael Mann of Covance Market Access Services Inc for medical writing and editorial support in the development of this manuscript; and Gary Delhougne of Smith & Nephew for providing ICD-9-CMcodes and ensuring the accuracy of information concerning implant constructs.

Correspondence should be addressed to: Tyler Knight, MS, Covance Market Access Services Inc, 9801 Washingtonian Blvd, 9th Fl, Gaithersburg, MD 20878 ( tyler.knight@covance.com).

Received: March 16, 2018
Accepted: July 18, 2018
Posted Online: November 28, 2018

10.3928/01477447-20181120-03

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