Published January 23,
2019
INFOGRAPHIC FULL REPORT
Download: REPORT LOCAL DATA READ PRESS RELEASE
Executive Summary
At more than $54 billion, spending to treat all orthopedic pain
conditions (including pain in the muscles, bones and joints) represents more
than 14 percent of overall healthcare spending for commercially insured adult
Blue Cross Blue Shield (BCBS) members.1,2 This report identifies trends in cost
and quality of care for elective or planned orthopedic surgical procedures
(specifically total and partial knee replacements and total hip replacements)
by examining the medical claims of BCBS commercially insured members from 2010
through 2017.3 This report is based on analysis of data from
Blue Cross Blue Shield Axis® (BCBS Axis), the largest collection of commercial
insurance claims data in the U.S. BCBS Axis was completed in 2015 to support
cost transparency and data-driven decision making. Cost transparency is key for
patients to work with their doctor to compare and consider the best setting of
care (whether inpatient or outpatient) and specific facility for these planned
procedures.
Specific Findings
- Planned
(elective) orthopedic procedures for commercially insured adult BCBS
members cost approximately $25 billion in 2017, accounting for
approximately 47 percent of total orthopedic care spending, an increase of
44 percent since 2010.
- The increase in
the number of knee and hip procedures from 2010 to 2017 is the main cost
driver, as the number of knee and hip procedures is up across nearly
all ages. Utilization increased by 17 percent for knee replacements and 33
percent for hip replacements. During this time period, the average
price of knee and hip procedures increased by 6 percent and 5
percent, respectively.
- There are
significant cost savings for knee and hip procedures performed in the
outpatient setting when compared to the inpatient setting. These
savings range between 30 to 40 percent.
·
The average price for an inpatient knee replacement is $30,249,
compared to $19,002 in an outpatient setting.
·
The average price for an inpatient hip replacement is $30,685,
compared to $22,078 in an outpatient setting.
- Despite these
potential savings, only 11 percent of knee procedures and 8 percent of hip
procedures were performed on an outpatient basis in 2017. Moreover,
outpatient complication rates have substantially improved by 23 percent for
knee procedures and 36 percent for hip procedures from 2013 to 2017
and are lower than complication rates in the inpatient setting.
- There is wide
price variation for knee and hip procedures within and between
metropolitan statistical areas (MSAs). For example:
·
Within San Antonio, the highest price of a knee replacement is
nearly three-times higher than that for the lowest priced procedure.
Within Dallas, the highest price of a hip replacement is nearly four-times
higher than that for the lowest priced procedure.
·
Between Des Moines, Iowa, and New York, N.Y., knee and hip
procedure prices vary more than three-fold.
Data Insights,
Collaboration and Leadership to Drive Quality of Care
This is the second Health of America Report since 2015
highlighting trends in planned orthopedic procedures for commercially insured
BCBS members. As each of these Health of America Reports reveal,
utilization and costs of planned knee and hip procedures both continue to
rise, impacting overall healthcare costs. In response to these trends,
BCBS companies developed solutions to help inform and empower
individuals to select quality, affordable sites of care that best meet
their needs. Two solutions are detailed below.
Centers of Excellence
BCBS companies have worked with providers to identify Centers of
Excellence throughout the country to ensure quality, cost-effective care—known
as Blue Distinction® Centers. Blue Distinction® is a national public
designation program recognizing healthcare facilities that demonstrate
expertise in specific types of care—safely, effectively and cost-efficiently.
In addition, BCBS companies established Blue Distinction Centers+, a
distinction available only to facilities that meet both quality and cost
thresholds, and BCBS has awarded over 550 designations nationwide for knee and
hip replacements. Among the top MSAs examined in this report, approximately
three out of four MSAs have at least one Blue Distinction Center+ for knee and
hip replacements (see Appendices C and D). Total knee and hip replacements
performed in Blue Distinction Center+ facilities offer 24 percent savings
(across the episode of care) when compared to non-Blue Distinction Center+
facilities.
To learn more about the Blue Distinction® Program, see: https://www.bcbs.com/about-us/capabilities-initiatives/blue-distinction/blue-distinction-specialty-care#kneehip
Local Programs Impact
BCBS companies have implemented a number of value-based, care
management and cost transparency initiatives in collaboration with employers
and local medical communities to help members understand and access the best
care to meet their needs.
To learn more about BCBS initiatives in local communities,
see: www.bcbs.com/the-health-of-america
Increase in Knee and Hip
Procedures
Planned orthopedic surgeries are increasingly common among
Americans ages 35 to 64, costing more than $25 billion dollars in 2017—an
increase of 44 percent over the past eight years.4 Since 2010, prices increased 6 percent for knee
procedures and 5 percent for hip procedures. In the same time span, knee and
hip replacement rates have increased 17 and 33 percent, respectively.5
As expected, the largest increases for knee and hip procedures
were among those within the 55 to 64 age group from 2010 to 2017. However, both
procedures also grew among most of the younger age groups.
Improvements in Quality
Outcomes
Inpatient
Complication rates for knee and hip procedures in the inpatient
setting have improved over the past eight years—with rates down 29 percent for
knee procedures and 32 percent for hip procedures.6 In addition, the average length of a hospital
stay has also decreased for inpatient procedures since 2010. At the same time,
prices for both knee and hip procedures continue to rise year-over-year.7
Outpatient
Complication rates for knee and hip procedures have also
improved in the outpatient setting and, in fact, are below rates in the
inpatient setting. Outpatient complication rates were down 23 percent for knee
procedures and 36 percent for hip procedures from 2013 to 2017.8,9
Utilization and Cost of
Surgery
Planned knee and hip outpatient procedures are 30 to 40 percent
less expensive on average than inpatient procedures.10 To emphasize the differences between costs in
each care setting, the analysis in this section presents procedure prices
incurred during the surgical visit.11
Across the country, the average cost for an inpatient knee
replacement is $30,249, compared to $19,002 in the outpatient setting. For a
hip replacement, the average cost in the inpatient setting is $30,685, compared
to $22,078 in the outpatient setting.12
Access to outpatient facilities and the use of outpatient
facilities for both knee and hip replacement procedures varies widely from
state to state.13 For knee procedures, Alaska, Colorado, Georgia,
Hawaii, Indiana, Kentucky, Minnesota, Mississippi and Ohio show outpatient
surgery rates above 20 percent. For hip procedures, Alaska, Colorado, Minnesota
and Mississippi have outpatient surgery rates above 20 percent.
Cost Transparency for
Knee and Hip Replacements
Wide price variation continues to exist for orthopedic
procedures across the U.S.14 In 2017, the national average price for a
complete episode of orthopedic care was about $34,000, with average costs of
$34,513 for inpatient knee replacements and $34,282 for inpatient hip
replacements.15,16
Between MSAs, prices range three-fold—from an average low price
of $19,934 and $19,263 for knee and hip procedures in Des Moines, Iowa, to an
average high price of $61,750 and $64,641 for knee and hip surgeries in
New York, N.Y.17 (See Appendices A, B and C for more information
on costs by state and MSA.)
Price spreads within MSAs
Within the largest 100 MSAs, there is also typically a three- to
four-fold difference between the highest priced and lowest priced episode of
care (“price spread”) for these surgeries. In fact, 30 of the largest MSAs
have a price spread greater than $25,000 for knee and hip procedures.
In 2017, the greatest price spread for planned knee replacements
occurred in San Antonio, ranging from $22,547 to $88,231 for the same episode
of care—more than a three-fold price difference.
In 2017, Dallas had the
greatest price spread for planned hip replacements, ranging from $20,597 to
$98,638 for the same episode of care—more than a four-fold price
difference.
Conclusion
Planned knee and hip replacements are becoming more common among
Americans, including people under age 55. Since orthopedic procedures have
considerable price variation across the U.S., it is essential that individuals
work with physicians to select a site of care that meets their needs for both
quality and affordable costs. This report is based on analysis of data from
BCBS Axis, the largest collection of commercial insurance claims data in the
U.S. BCBS Axis was completed in 2015 to support cost transparency and
data-driven decision making.
BCBS companies established Blue Distinction® Centers+, a
national designation program recognizing healthcare facilities that demonstrate
expertise in specific types of care—safely, effectively and cost-efficiently.
Over 550 Blue Distinction Center+ for knee and hip replacement have been
designated across the country to help Americans make informed choices
about quality, cost-effective care.
Methodology
This is the 23rd study of the Blue Cross Blue Shield, The Health
of America Report® series, a collaboration between Blue Cross Blue Shield
Association (BCBSA) and Blue Health Intelligence (BHI), which uses a
market-leading claims database to uncover key trends and insights in healthcare
affordability and access to care. The report was done in partnership with
HealthCore, a wholly owned and independently operated health outcomes
subsidiary of Anthem, Inc.
This report identifies trends in cost and quality of care for
elective or planned orthopedic surgical procedures (specifically knee and hip
replacements) by examining the medical claims of more than 48 million Blue
Cross and Blue Shield commercially insured members from 2010 through 2017.18 In this analysis, a knee replacement is defined
as a total or partial knee replacement or a revision surgery. A hip replacement
is defined as a total hip replacement or revision surgery. Inpatient settings
include surgeries that are performed in a hospital, whereas outpatient settings
include surgeries that are performed in an ambulatory surgery setting or
dedicated hospital outpatient unit with no overnight stay.
Total spending amounts were extrapolated from the study
population to the entire adult BCBS commercially insured population in 2017 and
are adjusted for membership growth in prior years. All dollar amounts have been
adjusted to reflect inflation and are presented in 2017 dollars.
In this report, overall orthopedic care costs include any of the
following as they relate to musculoskeletal conditions: office visits, imaging
tests, non-surgical treatments, planned surgeries and emergency surgeries.
Prices for specific elective procedures are measured in two ways. Price at
national, state and MSA levels are representative of an entire episode of care
and include any tests or treatment in the year prior to surgery, the surgical
procedure, device and professional fees and any physical therapy or prescriptions
in the 60 days after surgery. For the inpatient to outpatient price comparison,
costs before and after the surgery were stripped away to allow a “surgical
visit” comparison between settings. This was done, in part, due to the need to
obtain provider level pricing. The cost transparency section includes only
episodes of care pricing at inpatient facilities due to low reporting volume
for the outpatient setting.
All 50 states, the District of Columbia and the 100 most
populous MSAs were analyzed, and results are presented in the Appendix. In some
cases adjacent MSAs were combined to ensure sufficient data. All prices shown
at the state and MSA levels were adjusted for cost of living using Medicare’s
Geographic Adjustment Factor.19
For more information and to read past reports from the Health of
America Report series, visit www.bcbs.com/the-health-of-america
Appendix A: Price Spreads (2017)
Appendix B:
Planned procedures by state (2010, 2017)
See Excel document
Planned procedures by state (2010, 2017)
See Excel document
Appendix C:
Planned procedures by MSA (2010, 2017)
See Excel document
Planned procedures by MSA (2010, 2017)
See Excel document
Appendix D:
Blue Distinction Centers+ (2018)
See Excel document
Blue Distinction Centers+ (2018)
See Excel document
Footnotes
1.
In this report,
orthopedic care includes office visits, imaging, pre-operative care, any
surgical procedure, post-operative care, physical therapy and/or medication for
musculoskeletal conditions. Overall spending on orthopedic care is based on
data gathered from the Blue Cross Blue Shield Health IndexSM.
2.
In 2015, Blue Cross Blue Shield Association (BCBSA), in
collaboration with Blue Health Intelligence (BHI), explored baseline trends in
costs and utilization of knee and hip replacement surgeries: This new report updates
cost and utilization trends and widens the scope to offer potential cost
savings solutions for planned orthopedic surgeries.
3.
An elective procedure is a procedure planned in advance rather
than a procedure performed in an emergency situation. Read more.
4.
Planned orthopedic surgeries include knee replacements, hip
replacements, planned spine surgeries and other planned procedures. This report
focuses on total and partial knee replacements, total hip replacements, and
revision surgeries.
5.
Reasons often cited to account for the increase in planned knee
and hip surgeries include improved implant technology and an increasing desire
of Americans age 45 and older to remain active later in life. Read more.
6.
A procedure will be included in this measure if any of the
following complications occurred during or within 90 days of the procedure:
deep vein thrombosis, hematoma, joint dislocation, infections, pulmonary
embolism, revision surgery or post-procedural hospitalization. If a surgery had
multiple complications, it will only be counted once in this
measure.
8.
Outpatient data is insufficient prior to 2013 due to low volume
utilization for hip replacements.
9.
Complication rates are not adjusted for case mix severity;
therefore, caution should be used in comparing differences in rates between the
inpatient and outpatient settings.
10.
This report examined outpatient procedures performed in either
ambulatory surgery centers or a dedicated hospital outpatient department with
no overnight stay.
11.
People who undergo inpatient or outpatient orthopedic surgeries
may seek other types of treatments (including medications and physical therapy)
in the one year before and within 60 days after surgery. Since costs before and
after the surgery can be similar for either setting of care, price differences
are mainly incurred during the surgical visit (including professional and
facility fees, surgical procedure costs and hospital length of stay).
13.
This report focuses on the under 65 commercially insured
population. However, it is important to note that the Centers for Medicare
& Medicaid Services (CMS) for 2018 removed knee replacement surgery from
its “inpatient only” list. This change allows these procedures to be performed
in hospital outpatient settings. Read more.
14.
In 2015, Blue Cross Blue Shield Association (BCBSA), in
collaboration with Blue Health Intelligence (BHI), explored baseline trends in
costs and utilization of knee and hip replacement surgeries. Read more.
15.
In this report, a complete episode of orthopedic care includes
office visits, imaging, pre-operative care, any surgical procedure,
post-operative care and physical therapy and/or medication for one year prior
to surgery and 60 days post surgery.
16.
Only inpatient episodes of care were analyzed in this section of
the report, as the bulk of orthopedic procedures are currently performed in the
inpatient setting, demonstrating the price variation across and between MSAs.
17.
Average prices within all MSAs were adjusted for cost of living
differences based on Medicare’s Geographic Adjustment Factor (GAF) data.
18.
For more information on how musculoskeletal conditions can lead
to both planned and emergency orthopedic surgeries, see AAOS.
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