Tag Archive | healthcare cost

Rethinking How We Spend Healthcare Dollars During—and After—the Pandemic

OrthoBuzz occasionally receives posts from guest bloggers. This guest post comes from Frederick A. Matsen, MD and Jeremy S. Somerson, MD.

The coronavirus pandemic is having a profound effect on healthcare economics. A recent article in Health Affairs1 estimates that the median direct medical cost of a single symptomatic COVID-19 case can exceed $3,000 during the course of the infection alone. As of this writing, there have been almost 2.5 million confirmed cases in the US,2 with the number of known cases doubling every 2 months.3 These numbers suggest that the direct medical costs of the pandemic could easily exceed $8 billion. In addition, federal legislation enacted to help mitigate the effects of the pandemic is estimated to cost more than $480 billion over the next 10 years.4

Independently, the application of new technologies has also been pushing healthcare costs upward for decades. Long before the pandemic, a 2008 report from the  Congressional Budget Office concluded that “the bottom line from all these analyses is that the single most important factor driving the long-term increase in health care costs involves medical technology” and that “technological advances on average have brought major health improvements, but they often then get applied in settings where their benefits seem much less obvious.”5

In orthopaedics, we are strongly attracted to technology. In some cases – such as arthroscopy – technological advances enable less invasive, more effective, and safer treatments. In other cases, the patient benefits “seem much less obvious.” A recent review article makes the following observations about technology use in arthroplasty:

  • Computer-assisted technologies that are used in arthroplasty include navigation, image-derived instrumentation, and robotics.
  • Computer-assisted navigation improves accuracy and allows for real-time assessment of component positioning and soft-tissue tension.
  • It is not clear whether the implementation of these technologies improves the clinical outcome of surgery.
  • High cost and time demands have prevented the global implementation of computer-assisted technologies.

If we take shoulder arthroplasty as a general example, we see that prior to the introduction of routine preoperative CT scans, 3D planning, patient-specific instrumentation, metal-backed and augmented glenoid components, and short-stemmed and stemless humeral components, the results of anatomic total shoulder replacement for osteoarthritis were excellent, with 10-year revision rates under 5%.6,7 Such outcomes do not leave much room for improvement from newer technologies, each of which carries incremental costs of research, development, clearance by the FDA, marketing, learning curves, and potential product recalls and unanticipated long-term adverse effects.8 As Rosenthal et al. recently pointed out, “Since 3D planning and intraoperative navigation is more costly than 2D planning, and augmented glenoid components are more costly than standard glenoid components, the cost-benefit of these changes with respect to mid-term and long-term clinical outcomes and implant survival has not been ascertained.”9

Robust clinical data are needed to establish the incremental benefit to patients of each new technology in order to justify its associated incremental costs in comparison to legacy approaches that have been in place for years.

As a more specific example, the average cost of a preoperative shoulder CT scan ranges from $625 to $8,400,10 yet it remains to be demonstrated whether application of this technology leads to better shoulder arthroplasty outcomes in comparison to results obtained with conventional preoperative radiographic imaging.11 Agyeman et al. recently concluded that  “although CT scans are associated with greater financial cost and exposure to radiation than radiographs, the literature has yet to describe the additional clinical value and/or potential cost-value benefit as a result of improved outcomes provided by the use of CT scans in patients undergoing total shoulder arthroplasty, even when integrated with virtual planning software and generation of patient specific instrumentation.” If a preoperative shoulder CT scan costs $1,000, the very low end of the aforementioned range, avoiding routine preoperative CTs in 3 shoulder-arthroplasty patients would save an amount of money equal to the average direct medical cost of a patient with COVID-19—$3,000.

We conclude that this is a good time to seriously reconsider how we apply new technologies in orthopaedics by asking a simple question: Are we spending our more-precious-than-ever healthcare dollars in ways that best serve the population as a whole?

Frederick A. Matsen III, MD is a professor in the Department of Orthopaedics and Sports Medicine at the University of Washington Medical Center in Seattle. Jeremy S. Somerson, MD is a fellowship-trained shoulder and elbow surgeon at the University of Texas Medical Branch in Galveston.


  1. Bartsch SM, Ferguson MC, McKinnell JA, O’Shea KJ, Wedlock PT, Siegmund SS, et al. The potential health care costs and resource use associated with COVID-19 in the United States. Health Aff (Millwood). 2020;39(6):927-35.
  2. John Hopkins University CSSE. COVID-19 dashboard by the Center for Systems Science and Engineering (CSSE) at John Hopkins University (JHU). 2020 Accessed June 28, 2020. Available from: https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6.
  3. Hernandez S, O’Key S, Watts A, Manley B, Pettersson H, CNN. Tracking Covid-19 cases in the US. CNN, 2020 Accessed June 28, 2020. Available from: https://www.cnn.com/interactive/2020/health/coronavirus-us-maps-and-cases/.
  4. Congressional Budget Office. The budgetary effects of laws enacted in response to the 2020 Coronavirus pandemic, March and April 2020. 2020 Accessed June 28, 2020. Available from: https://www.cbo.gov/system/files/2020-06/56403-CBO-covid-legislation.pdf.
  5. Congressional Budget Office. Technological change and the growth of health care spending. 2008 Accessed June 28, 2020. Available from: https://www.cbo.gov/publication/24748.
  6. Australian Orthopaedic Association National Joint Replacement Registry (AOANJRR). Annual report 2019: Hip, Knee & Shoulder Arthroplasty. Total Shoulder outcomes over two decades. Figure ST22, Page 16. 2019 Accessed June 28, 2020. Available from: https://aoanjrr.sahmri.com/documents/10180/668596/Hip%2C+Knee+%26+Shoulder+Arthroplasty/c287d2a3-22df-a3bb-37a2-91e6c00bfcf0.
  7. Neer CS, 2nd, Watson KC, Stanton FJ. Recent experience in total shoulder replacement. J Bone Joint Surg Am. 1982;64(3):319-37.
  8. Somerson JS, Neradilek MB, Hsu JE, Service BC, Gee AO, Matsen FA, 3rd. Is there evidence that the outcomes of primary anatomic and reverse shoulder arthroplasty are getting better? Int Orthop. 2017;41(6):1235-44.
  9. Rosenthal Y, Rettig SA, Virk M, Zuckerman JD. The impact of preoperative three-dimensional planning and intraoperative navigation of shoulder arthroplasty on implant selection and operative time: a single surgeon’s experience. J Shoulder Elbow Surg. 2020;Epub ahead of print.
  10. Poslusny C. How much does a CT scan cost? New Choice Health, Inc., Pensacola, FL, Accessed June 28, 2020. Available from: https://www.newchoicehealth.com/ct-scan/cost.
  11. Matsen FA, 3rd, Whitson A, Hsu JE, Stankovic NK, Neradilek MB, Somerson JS. Prearthroplasty glenohumeral pathoanatomy and its relationship to patient’s sex, age, diagnosis, and self-assessed shoulder comfort and function. J Shoulder Elbow Surg. 2019;28(12):2290-300.

“Mortgages” for Medical Care: A Good Idea?

OrthoBuzz occasionally receives posts from guest bloggers. This guest post comes from Chad Krueger, MD, in response to a report about healthcare loans that aired recently on Boston radio station WBUR.

How much is life-altering or life-saving treatment worth? People and the companies that insure their health are likely to have different answers to this difficult question. The same person may even have different answers at different points in his or her life. Because our ability to care for patients sometimes outpaces individual and societal economic resources, additional hypothetical dilemmas arise: Would you cash in everything you owned to help your child overcome an illness? What if you had two children with the same life-threatening condition but only had enough money for one of them to get treatment?

On the surface, the idea of commercial lenders granting mortgage-like loans to either individuals or insurance companies to pay for expensive treatments sounds reasonable. Such loans would spread out payments over five to ten years and, under a plan broached by Boston oncologist David Weinstock and MIT finance professor Andrew Lo, would protect borrowers from having to pay for treatments that do not work.

The example in the WBUR story focused on a very expensive hepatitis-C medication, but it begs many additional questions: For example, how would a lender decide whether a loan application for a specific treatment would be too risky? The WBUR story included comments by Boston College Law School professor Patricia McCoy, who noted that the home-mortgage market collapsed in 2008 largely because both lenders and borrowers were unable—or unwilling—to properly determine risk. How would that borrower-lender risk-assessment psychology play out in life-or-death healthcare situations, especially when the annual percentage rates for some of the healthcare credit cards currently available can exceed 25%?

Even if they come to pass, healthcare “mortgages” will not solve the underlying problem of having more medical and surgical options available than we, as a society, have the resources to pay for. Healthcare loans may help some people get the care they need, but ultimately they would do nothing to reduce the cost of care. Still, if we continue working hard to reduce healthcare costs, I think discussions about new and interesting ways to pay for healthcare should be encouraged.

Society may never be able to answer the question of how many dollars a certain treatment is worth, but questions about the costs (economic and emotional) of not being treated can be even harder to answer.

Chad Krueger, MD is a military orthopaedic surgeon at Womack Army Medical Center in Fort Bragg, NC.

For an in-depth look at healthcare loans, read this article in Science Translational Medicine.