The Economics of Revision THA for Fractures: Sustainable?

At the risk of  economic oversimplification, it is difficult to sustainably provide a service when payment for it is less than the cost to perform it. But that is one reality exposed by Hevesi et al. in the May 15, 2019 issue of The Journal. Using National Inpatient Sample and ACS-NSQIP data, the authors compared the average costs and 30-day complication rates for revision total hip arthroplasties (THAs) performed for 3 different indications—fractures, wear/loosening, and instability—at both a local and national level. They found that the average hospitalization costs associated with a revision THA related to a fracture were 33% to 48% higher (p < 0.001) than the cost of revision THAs related to wear or instability.

However, the authors emphasize that all 3 of these indications for revision THA are reimbursed at the same rate based on Medicare Diagnosis-Related Group (DRG) codes. DRGs take into account patient comorbidities to determine reimbursement levels—but they do not adjust payments for THA revision according to indication. Hevesi et al. note that the only DRG reimbursement level that would cover the average cost of a revision THA for a fracture would be one performed on a patient with severe medical comorbidities or a major complication. Not surprisingly, patients who underwent a revision THA to treat a fracture were found to have a higher age and more medical comorbidities than those undergoing a revision for wear or instability.

The authors use this data to make a very compelling case that DRGs for revision THA should be changed so they are indication-specific, taking into account the underlying reason for the revision. They observe that “a DRG scheme that does not distinguish between indications for revision THA sets the stage for disincentivizing the care of fracture patients and incentivizing referrals to other facilities.” Those “other facilities” usually end up being large tertiary-care centers, which the authors claim “perform a higher percentage of the costlier revision THA indications.”

This problem of reimbursement inequality is not unique to revision THAs and requires further investigation in many fields. Unless “the system” addresses these subtle but important differences, tertiary referral centers may be inundated with patients who need procedures that cost more to perform than the institutions receive in reimbursement—an unsustainable scenario.

Chad A. Krueger, MD
JBJS Deputy Editor for Social Media