Widespread variation in costs for total joint replacements could mean hospitals are losing millions in potential savings if the variations continue to go unchecked. That's according to a new analysis by healthcare improvement company, Premier.
That analysis included blinded inpatient data from 869 facilities, representing more than 283,000 patient discharges over a 17-month period, October 2015 to March 2017. Premier researchers looked at variation in care delivery and resource costs within total joint replacements.
According to the results, there are "large opportunities" to reduce cost variations for the primary hip and knee implants used for total joint procedures. Reducing those variations would mean providers achieve greater savings and cut healthcare spending. For instance, researchers found providers paid very different prices for various hip and knee devices.
When Premier drilled down into the data for a subset of 350 hospitals over the past year, they found a $1,500 difference between the top and bottom performing hospitals for knee implants and $1,700 difference between the best performing and worst performing hospitals for hip implants.
Were all hospitals able to meet or exceed the top 25th percentile pricing and close the gap, hospitals would save roughly $23.7 million for knee implants and $19.1 million for hip implants, Premier said.
"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."
Cost variations included surfaced in ancillary areas of the procedures, such as anesthesia. There are debates as to whether local or general anesthesia is better for patient care. However, as local is more cost effective, it may be worth looking at the procedures to see if using local anesthesia in lieu of general would be appropriate.
Time spent in the operating room and the cost that went with it also varied.
"The highest-performing hospitals accounted for just over $2,000 in labor spending in the operating room, compared to the lower-performing hospitals, which accounted for more than $4,600 in operating room labor spend – signifying opportunities to enhance throughput within the operating room for total joint replacements," Premier said.
Hospitals that kept implant costs the lowest utilized the following best practices to get the best prices on goods and services: cleanse and understand data for a full view into hip and knee device costs; use benchmark pricing against peers to examine price variation; do a thorough analysis with a data expert who understands the health system's culture, trends, surgeon preferences and vendor relationships to help devise a practical approach to pricing and achieving savings; and get surgeons on board with data to agree on goals and "ensure pricing parity is effective," according to Premier.
Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com