As part of the Truven Health AnalyticsTM continuing research series into total joint replacement (TJR) bundled costs for commercially insured patients (age 45 to 64), we’ve found that readmissions make up a small percentage of average total bundled costs — 2.1 percent (just $760 on average per patient). That appears to be true no matter what region of the U.S. patients are located.
The average percentage of total bundled costs due to post-acute care is also fairly low, although higher than readmissions, at 12.7 percent. The average percentage among U.S. Census divisions ranges from 10.8 percent (Mountain Division) to 14.5 percent (East South Central), which shows a bit more cost variability than readmissions.
Our simulated commercial bundles included inpatient hospitalization, post-acute care, and readmission costs.
Here’s a very quick look at what we found:
These findings are in contrast to projections for Medicare’s older population. For example, additional Truven Health analysis of simulated TJR bundles for one large hospital showed that 21 percent of the Medicare total bundled cost was for post-acute care compared to less than 8 percent in the commercially insured bundles — with almost 14 percent versus 4 percent for skilled nursing facility costs alone.
Of course, it’s not unexpected that an older, 65+ Medicare population would have a higher likelihood of serious comorbid conditions and a greater need for post-surgical support. However, the Centers for Medicare & Medicaid Services predict that most of the cost-savings for the Medicare population and its new Comprehensive Care for Joint Replacement (CJR) Model will originate from improvements in post-acute care and readmissions costs after reducing cost variation through bundling.
The savings opportunities appear to be far less obvious in the commercial population.
For more details on our data, methodology, and other findings, you can download the complete research brief, Bundled Pricing for Total Joint Replacements (TJRs) in the Commercially Insured Population: Geographic Variation and Cost-Driver Insights.
Our next brief will cover an analysis of the impact of length of stay and post-acute care decisions on bundled commercial costs for TJR patients. If you’d like to be alerted via email when that brief is released, you can provide us with your information via interest.truvenhealth.com/BundledPaymentsWP.
Senior Research Fellow, Advanced Analytics