Episode-of-care costs of total knee arthroplasty: Outpatient versus inpatient postoperative care protocol

Background: Total knee arthroplasty (TKA) is the most commonly performed joint replacement procedure in North America. Few studies have successfully evaluated the episode-of-care cost (EOCC) of common elective orthopedic procedures using an activity-based costing (ABC) framework. The objective of this study is to compare the EOCC of same-day discharge versus inpatient TKA using an activity-based costing methodology. Methods: An observational case-control study was conducted comparing the EOCC of 25 consecutive patients who underwent same-day discharge (SDD) TKA and 25 consecutive patients who underwent same-day admission (SDA) TKA at an academic center. The EOCC was generated using an ABC framework. Results: The median total EOCC for outpatient TKA was $7,243.26 CAD (IQR=614.12), while the median EOCC in the inpatient group was $8,303.94 CAD (IQR=1,157.77). The costs incurred secondary to the hospital admission were the main driver of the increased cost for inpatients. The mean length of stay for admitted patients was 2.45 days (SD=1,52). Patients in the outpatient group were younger (p < 0.01) and had a lower mean Charlson Comorbidity Index group (p = 0.01). There was no significant difference in gender, BMI, ASA scores, and complication rates between the two groups. Conclusion: Through the application of an ABC framework, this value-based healthcare study demonstrates that outpatient procedures are a cost-effective approach to knee arthroplasty. Our findings demonstrate that the total cost of outpatient TKA was on average 15% ($1,060 CAD) lower than the cost of TKA with the standard inpatient postoperative care protocol.