AAOS-Sponsored Study Touts Long-Term Financial Benefits of Knee Replacement

Most people getting a knee replacement worry about the cost of the procedure. But what about the long-term cost of patients that return to productivity?

The average total knee replacement surgery generates indirect savings of almost $40,000—more than offsetting the cost of an operation that itself costs about $21,000, according to a new study sponsored by the Chicago, Ill.-based American Academy of Orthopaedic Surgeons (AAOS) published in the The Journal of Bone & Joint Surgery.

The study looked at 600,000 total knee replacement surgeries performed in 2009 and suggests that the lifetime “societal savings”—mainly in the form of patients’ continued employment and increased earnings—equal about $12 billion. And the savings are on track to grow dramatically in coming years as more people have the procedure as a result of aging or obesity. The number of people getting knee replacements increased to 644,000 in 2011 and is expected to grow to 3.5 million a year by 2030.

In the past few years, people have begun getting replacements when they’re younger and still or working age. That’s why surgery has a net financial benefit for many patients, in addition to reducing their pain and enhancing their mobility. Nearly half the people undergoing the procedure are under 65—a typical retirement age for many workers—up from just 26 percent in 1997.

The study found that the average net lifetime societal benefit fell in the range of $10,000 to $30,000. It factored in fewer missed workdays and reduced disability payments stemming from the procedure. Higher earnings from a longer working life accounted for about 85 percent of the benefits, which accrue mainly to workers and their employers.

The estimated mean cost (in 2012 U.S. dollars) was $43,401 for simultaneous bilateral total knee arthroplasty compared with $72,233 for staged bilateral total knee arthroplasty. The quality-adjusted life years gained were 9.31 for simultaneous bilateral total knee arthroplasty and 9.29 for staged bilateral total knee arthroplasty, according to the study. On the basis of these matched results, simultaneous bilateral total knee arthroplasty dominated staged bilateral total knee arthroplasty with lower costs and better outcomes.

On the basis of the study’s analysis, simultaneous bilateral total knee arthroplasty is more cost-effective than staged bilateral total knee arthroplasty, with lower costs and better outcomes for the average patient.

“These data can inform shared medical decision-making when bilateral total knee arthroplasty is indicated,” authors noted.

The study comes as the price of many medical procedures are being examined more closely as health-reform advocates look for ways to reduce costs and boost value. Knee and hip replacements are among the most expensive procedures reimbursed by Medicare.

A new study by the cost-comparison website, NerdWallet, compared 2,750 hospitals across the United States and found a staggering disparity between what the hospitals officially charge for hip and knee replacement surgeries before any insurance adjustments.

For example, one low-volume hospital in California officially charges $223,373 for such surgeries. In comparison, a high-volume hospital in Ohio charges $15,465, according to the survey. Notably, hospitals that performed more than 200 of those surgeries annually tended to have lower rates of patients readmitted for complications such as infections than hospitals that did fewer procedures, the survey found.

The price consciousness on knee replacements has led to recent moves such as Oregon officials slapping a $500 surcharge on covered state employees who opt for the operation, and California’s requirement that all state workers and retirees foot the bill for the out-of-pocket costs of such operations in excess of $30,000.

John Tongue, M.D., past president of AAOS and one of the study’s authors, said this is the first study that addresses the issue from a “societal point of view,” changing the conversation from expense to value.

“We’re looking not just at the quality of life, we’re looking at the ability to get back to work,” Tongue said, adding that four additional studies analyzing the financial benefits of other orthopedic procedures are in the pipeline.