Joint Replacement Dark Icon
The hip way to manage joint replacement costs

Reducing touches/rework  //  Difficulty: Simple  //  Patient Financial Services

Why run this play?

The average age of patients listed in the American Joint Replacement Registry is close to 66, and approximately 10,000 Baby Boomers turn 66 every day. So it’s important to examine the cost of implantables to ensure you are paying a fair and reasonable price. By comparing your costs to a national analysis of charges, you can be sure you are not eroding your margins, or you’re damaging your ability to compete with nearby providers by paying too much.

Background

According to the most recent data from the Healthcare Cost and Utilization Project, hip replacements in the United States more than doubled between 2000 and 2014 — from 160,282 to 371,605 a year. With millions more Boomers still in their mid-fifties and early sixties, the trend will continue. By 2030, the number of joint replacements is expected to increase to more than 4 million. With numbers this staggering, it’s important to closely monitor the cost of these procedures in order to stay lean and competitive.

Take Action

  1. Run a DRG 469/470 Case Analysis Report
  2. Upload actual cost data for DRG 469 and 470 – make sure these DRG codes are on your uploaded dataset so you can join it to the DRG 469/470 Case Analysis Report data
  3. Upload benchmark cost/charge data similar to step 3
  4. Join uploaded data to Case Analysis Report data on DRGs
  5. Calculate the cost differential between benchmark cost and charges to actual cost and charges
  6. The difference, per case, and in aggregate, is your opportunity for cost/charge renegotiation
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How to Calculate This Play's Value

  1. Track the Dollars per Case before implementing the changes.
  2. Track the Dollars per Case after the price adjustment.
  3. Old Dollars per Implantable – New Dollars per Implantable (x) number of cases = Opportunity Savings.

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