Tuesday, May 7, 2013

Costs of orthopaedic implants, do we know what they are?

Orthopaedic Surgeons Frequently Underestimate the Cost of Orthopaedic Implants

Orthopaedic surgeons control which devices are used in the care of their patients. Potentially, orthopaedic surgeons, the hospitals for which they work, and payers of healthcare can influence the costs of these implants.

These authors presented a questionnaire to 51 residents and attending orthopaedic surgeons asking them to estimate the cost of 13 commonly used orthopaedic devices (IMD). The mean percentage error in estimation for all respondents was 69% (range, 29%-289%).

The authors conclude: " we found orthopaedic surgeons have poor knowledge of orthopaedic IMD costs. For surgeons to actively participate in cost containment in a healthcare environment in which spending will be intensely scruti- nized, they must have a thorough understanding of IMD pricing. As the current level of expenditures is not sustainable, new strategies for the education of surgeons regarding costs of IMDs and an evidence-based rationale for their use should be utilized."

The CORR editor remarks : "Surgeons’ consulting relationships, the reluctance of vendors to provide price transparency, the chilling effect of the U. S. Department of Justice investigation of 2005–2007, and hospital confidentiality in purchasing agreements render most broad-based efforts to educate physicians about implant costs difficult. The impact of our choices on the lives of patients, particularly the uninsured who — in a cruel irony — often receive bills for the full-retail charges, is coming under withering public scrutiny, perhaps appropriately. If we continue choosing and using devices as though we have no skin in the game; if we do not insist on a measure of clarity about device pricing, our profession will continue to lose both respect and autonomy."

Comment: Our ability to understand the value equation of devices (incremental benefit divided by incremental cost) requires knowledge of both the numerator and denominator.  For shoulder arthroplasty implants, it has been pointed out that the cost of the implant is a major part of the cost for the entire procedure  That article pointed out that in 2008 list prices for a hemiarthroplasty was  $1547 while a reverse total shoulder implant cost was $12,140.  The estimated costs for the procedures were based on the 2008 national average Medicare reimbursement rates for the respective Current Procedural Terminology codes. The procedural cost for a hemiarthroplaty was  $9509.05; therefore, the total cost of a primary HHR was $11,509.05 when the price of the implant was included. 13% of the total cost is for the implant. The procedural cost for a reverse total shoulder was estimated at $9,823.99; therefore, the total cost of the primary reverse was $21,963.99 when the price of the implant was included. Over 55% of the total cost is for the implant!

It is an interesting observation that the cost of computers and smart phones drop with time and increase only when it is demonstrated that new features make the device more useful. In the implant world the costs do not seem to decline with time and when more expensive models are introduced, data on their clinical superiority over prior models is lacking.

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