Background: Despite increasing demands on physicians and hospitals to increase value and reduce unnecessary costs, reimbursement for healthcare services has been under downward pressure for several years. This study aimed to analyze the trend in hospital charges and payments relative to corresponding surgeon charges and payments in a Medicare population for total hip (THA) and knee arthroplasty (TKA).
Methods: The 5% Medicare sample database was used to capture hospital and surgeon charges and payments related to 56,228 patients who underwent primary THA and 117,698 patients who underwent primary TKA between 2005 and 2014. Two values were calculated: (1) the charge multiplier (CM), the ratio of hospital to surgeon charges and (2) the payment multiplier (PM), the ratio of hospital to surgeon payments. Year-to-year variation and regional trends in patient demographics, Charlson Comorbidity Index, length of stay (LOS), CM, and PM were evaluated.
Results: Hospital charges were significantly higher than surgeon charges and increased substantially for both THA (CM increased from 8.7 to 11.5, P < .0001) and TKA (CM increased from 7.9 to 11.4, P < .0001). PM followed a similar trend, increasing for both THA and TKA (P < .0001). LOS decreased significantly for both THA and TKA (P < .0001), while Charlson Comorbidity Index remained stable. Both CM (r = 0.84 THA, 0.90 TKA) and PM (r = 0.75 THA, 0.84 TKA) were strongly negatively associated with LOS.
Conclusion: Hospital charges and payments relative to surgeon charges and payments have increased substantially for THA and TKA despite stable patient complexity and decreasing LOS.
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