Comparison of the Hospital Cost of Primary and Revision Total Hip Arthroplasty After Cost Containment

Abstract

This study compared the hospital cost of primary and revision total hip arthroplasty (THA) after the introduction of cost-containment programs (clinical pathway, hip implant standardization, and competitive bid purchasing of hip implants). Hospital financial records for 290 primary and 85 revision THAs performed from October 1993 through September 1995 were analyzed. A cost-accounting system provided actual hospital cost data for each procedure. Accurate calculation of hospital income or loss was determined. Average hospital length of stay was 4.9 days for primary THA and 5.9 days for revision THA. Average hospital cost was $11,104 for primary THA and $14,935 for revision THA. Average net income (hospital revenue - hospital expense) for primary THA was $2486. Average loss from revision THA was $401 . The payer mix included commercial insurance. Blue Cross/Blue Shield, managed care. Medicare, Medicaid, and workmen's compensation. For primary THA, all payers were profitable except Medicaid and selected managed care contracts. For revision THA, profit was achieved with payment from commercial insurance only. Despite the introduction of cost-containment programs, revision THA did not achieve profitability at our institution.