At Truven Health AnalyticsTM we’ve been researching cost variation in simulated bundled payments for privately insured total joint replacement (TJR) patients for several months now. (Visit the landing page for more information and recently released briefs.)
In an earlier blog post, we reported that cost differences across U.S. Census regions for the post-acute care portion of a bundle ranged from an average of $3,907 to $5,292.
I’d like to make a few additional points about these differences.
First, there is no apparent link between hospitalization cost and post-acute care cost.
We know from our previous research that anchor hospitalization costs were the main driver of the variation in overall bundle cost. Post-care services were the next most impactful driver. But we’ve found no clear relationship between the average post-acute care cost in a division and the average anchor cost.
The highest cost variation was found in rehabilitation facility costs.
Our study found substantial differences across divisions in the average cost by type of post-acute care service a patient received. For home healthcare costs, the difference in the average cost per patient was just $1,300. For skilled nursing facility care, the difference was more than $5,000. And for care at an inpatient rehabilitation facility, the difference was more than $10,500 per patient.
This information definitely points to the importance of discharging a patient to the right care option to keep costs down, while still providing the best care and achieving the best outcomes.
Of course, regional preferences play a role.
Because of our study’s large sample size, it is unlikely that post-acute cost variations result from differences in patient characteristics. However, simple geographic-area preferences — such as historical patterns, post-acute care facility availability, or health plan contract rules and payment rates — could play a role. More research would be needed to identify those patterns.
You can read more about our findings by downloading the full research brief, Bundled Pricing for Total Joint Replacements in the Commercially Insured Population: Cost Variation Insights by Bundled Care Components.
Stay tuned for a new brief coming soon on the role of readmissions in TJR bundled costs.
Senior Research Fellow, Advanced Analytics