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Joint Replacement Post-Acute Care and Readmissions: Variations Represent Opportunity to Improve Bundled Cost

Thursday, March 3, 2016

In our continuing research at Truven Health AnalyticsTM into bundled payments for commercially-insured total joint replacement (TJR) patients, we’ve uncovered some additional insights this month. The research is based on simulated bundles that include the entire episode of care from surgery through 90 days post-discharge; the data is from the Truven Health MarketScan® commercial claims database, analyzed across U.S. Census divisions.

Length-of-Stay Finding

We found significant variation in the effect of anchor hospitalization length of stay on total bundled costs. The average impact varied from $313 per additional day in the anchor facility (after initial day of hospitalization) or 1 percent of the base price in the East North Central division, to $1,944 or 6.2 percent of the base price in the Pacific division.


Post-Acute Care Impact

We also found differences in average bundled cost across regions for post-acute care services, from $3,907 to $5,292 — a difference of nearly $1,400. In addition, the study identified significant variation in the average bundled cost by type of post-acute care received by patients (for instance, home health services versus a skilled nursing facility). The highest average patient cost was for care at a rehabilitation facility — the option that also had the greatest variability in cost across divisions.

And About Those Readmission Rates …

We also found that patients with multiple types of post-acute care had higher readmission rates. The combinations of rehab facility and home health, and skilled nursing and rehab, had similar readmission rates at 10.5 percent and 9.2 percent, respectively. What’s not known is whether these patients were at higher risk of readmission prior to discharge, or if the risk increased during post-acute care. We hope to tackle that question in future research.

So What’s the Key Takeaway?

All of this analysis points to the importance of discharge planning and directing patients to the appropriate care option when the goal is to reduce bundled costs for TJR, while maintaining high levels of quality and patient outcomes. While costs associated with post-acute care and readmissions were only a fraction of the total bundled costs for the commercial population, they were subject to substantial variability — representing perhaps an important opportunity to better manage results.


For more insights from this study, you can download the new research brief, Bundled Pricing for Total Joint Replacements in the Commercially Insured Population: Cost Variation Insights by Bundled Care Components, here.


Bob Kelley
Senior Research Fellow
Advanced Analytics