Resolving price disparities for hip and knee replacements could potentially save hospitals millions, according to a new analysis from Premier.
The analysis, published in Premier's most recent Margin of Excellence report, was conducted between October 2015 and March 2017. It examined inpatient data from 869 hospitals, representing more than 283,000 patient discharges over the 17-month period.
Premier found hospitals have made large strides toward reducing overall length of stay and readmissions for total joint replacements. For instance, the length of stay for these procedures fell 28 percent — from an average of 3.2 days to 2.3 days — over a five-year period for 279 facilities. Additionally, the median length of stay for total joint replacement surgery fell to two days, and 50 percent of cases fell between 2-3 days, according to the analysis.
However, Premier said it found hospitals have large opportunities to reduce price variation for many of the primary hip and knee implants used for total joint procedures —which could essentially save hospitals millions.
The analysis found the median cost per overall total joint procedure was $14,520 among the 869 hospitals, and half of cases were between $12,000 and $17,900.
After a deeper dive into nearly 350 hospitals, Premier said it found a $1,500 difference between the top-performing and bottom-performing hospitals for knee implants in the last year. Researchers also found a $1,700 difference for hip implants.
Overall, Premier estimated savings of $23.7 million for knee implants and $19.1 million for hip implants if all hospitals met or exceeded the top 25th percentile pricing.
"As total joint replacements are the most common procedures performed nationally, every component — from care delivery protocols to device acquisition costs — should be scrutinized for opportunities to improve overall margin," said Robin Czajka, RN, service line vice president of cost management at Premier. "Implants have been more difficult to manage in terms of gaining transparency around pricing, but data and tools are available to help reduce variation and curb price discrepancies for high-value implants."
Access the full analysis here.
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