Purpose
To examine the cost metrics and profitability of rotator cuff repairs (RCRs) in a
large health care system.
Methods
A retrospective study was performed using value analysis team data from 2 hospitals
within a large metropolitan health system from 2010 to 2014. Cost and profit metrics
were collected and compared against surgeon volume, surgeon subspecialty training,
implant costs, Current Procedural Terminology (CPT) coding, length of stay, and hospital
site.
Results
A total of 5,899 RCRs were identified with a mean contribution margin of $2,133. Surgical
supplies were the largest contributor to direct costs. Hospital site also significantly
affected contribution margin ($1,912 at hospital 1 vs $3,129 at hospital 2, P < .001). The number of billed CPT codes was not significantly correlated to contribution
margin; however, significant differences were noted in contribution margin and direct
cost associated with different CPT code combinations, with arthroscopic RCR with subacromial
decompression and distal clavicle excision being the most profitable, at an average
contribution margin of $2,147. There was no correlation between surgeon volume and
contribution margin or direct cost.
Conclusions
Our overall findings show that improvement in the profitability of arthroscopic RCR
for hospital systems is possible, both by examining institutions' direct costs and
by providing individual surgeons with cost breakdowns and contribution margin information
to improve the profitability of their practice.
Level of Evidence
Level IV, economic and decision analysis.
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Article info
Publication history
Published online: November 22, 2018
Accepted:
July 20,
2018
Received:
December 19,
2017
Footnotes
See commentary on page 43
The authors report that they have no conflicts of interest in the authorship and publication of this article. Full ICMJE author disclosure forms are available for this article online, as supplementary material.
Identification
Copyright
© 2018 Published by Elsevier on behalf of the Arthroscopy Association of North America
ScienceDirect
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- Editorial Commentary: The Ever-changing Landscape of Health Care Economics—“The Future Ain't What It Used to Be”ArthroscopyVol. 35Issue 1
- PreviewPayment models for orthopaedic services are constantly changing. Rather than have changes dictated to us, it is our responsibility as experts in arthroscopic surgery to advocate for patients and offer our unique insight to governmental agencies and payers. Before we can begin to understand this complex landscape, we need to start at the beginning and master the fundamentals of health care economics: cost-effectiveness analysis, cost minimization, cost benefit, and the like. Failure to do so will mean being left out of a conversation that will ultimately affect our ability to care for patients.
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