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Health program lowers costs of total joint procedures, influences cost in other facilities

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A California-based employee health program that implemented a price threshold on total joint replacement procedures for its members found comparable or better outcomes for those members, and was also able to influence price drops in health care facilities not part of the original designation list.

“The results of our study showed that CalPERS health plan costs for joint replacement procedures dropped significantly – by 19% from $35,408 to $28,695, per surgical-related admission. The analysis also found that use of designated facilities increased by 21% by CalPERS members,” Chia-hsuan Li, MS, a senior researcher analyst at HealthCore Inc. in Wilmington, Del., told Orthopedics Today.

 

Chia-hsuan Li

Li and colleagues studied adults less than 65 years old who were diagnosed with osteoarthritis and underwent either an elective, non-emergency total hip replacement or total knee replacement, according to the abstract. Members of the California Public Employees’ Retirement System were given a list of 46 designated facilities that met quality requirements and charged less than $30,000 for each knee or hip replacement surgery. Participants either chose from the list, which would result in the patients paying little or no out-of-pocket charges beyond the deductible, or were able to pay the difference if they chose to use another facility that charged more than $30,000 for a total joint replacement. The participants lived in the same area regardless of health care coverage and reported at 30-day and 90-day follow-up, or until their health care coverage ended.

“During this time, member out-of-pocket costs remained relatively flat from 2011 to 2012. Looking at claims-base measures, we saw that outcomes were either equivalent or better in the group using the designated facilities,” Li said.

She also said members had significantly lower 30-day general infection rates and non-complication general complication rates than non-members.

Reference:

Li C-H. Effects of a reference-based purchasing design program on healthcare utilization and outcomes of knee and hip replacement surgeries. Presented at: AcademyHealth Annual Research Meeting. June 23-25, 2013; Baltimore.

Disclosure: This study was funded by WellPoint Inc.