Risk Adjustment for Episode-of-Care Costs After Total Joint Arthroplasty: What is the Additional Cost of Individual Comorbidities and Demographics?

Introduction: Concerns exist regarding the lack of risk adjustment in alternative payment models for patients who may use more resources in an episode of care. The purpose of this study was to quantify the additional costs associated with individual medical comorbidities and demographic variables. Methods: We reviewed a consecutive series of primary total hip and knee arthroplasty patients at our institution from 2015 to 2016 using claims data from Medicare and a single private insurer. We collected demographic data and medical comorbidities for all patients. To control for confounding variables, we performed a stepwise multivariate regression to determine the independent effect of medical comorbidities and demographics on 90-day episode-of-care costs. Results: Six thousand five hundred thirty-seven consecutive patients were identified (4,835 Medicare and 1,702 private payer patients). The mean 90-day episode-of-care cost for Medicare and private payers was $19,555 and $30,020, respectively. Among Medicare patients, comorbidities that significantly increased episode-of-care costs included heart failure ($3,937, P < 0.001), stroke ($2,604, P = 0.002), renal disease ($2,479, P = 0.004), and diabetes ($1,368, P = 0.002). Demographics that significantly increased costs included age ($221 per year, P < 0.001), body mass index (BMI; $106 per point, P < 0.001), and unmarried marital status ($1896, P < 0.001). Among private payer patients, cardiac disease ($4,765, P = 0.001), BMI ($149 per point, P = 0.004) and age ($119 per year, P = 0.002) were associated with increased costs. Discussion: Providers participating in alternative payment models should be aware of factors (cardiac history, age, and elevated BMI) associated with increased costs. Further study is needed to determine whether risk adjustment in alternative payment models can prevent problems with access to care for these high-risk patients.