Suneel B Bhat1,2,3, Frederic E Liss1,2,3, Pedro K Beredjiklian1,2,3. 1. Research performed at Rothman Institute, Philadelphia, Pennsylvania, USA. 2. Rothman Institute Department of Orthopaedics, Thomas Jefferson University Hospital, Philadelphia, PA, USA. 3. Rothman Institute, Philadelphia, PA, USA.
Abstract
BACKGROUND: There are a number of different implant choices for surgical treatment of distal radius fractures, often determined by surgeon preference or availability. Although no one volar plate demonstrates superior outcomes, there are significant cost differences absorbed by hospitals and surgical centers. This purpose of this study is to characterize the economic implications of implant selection in the surgical management of distal radius fractures. METHODS: A retrospective review of billing records at a mid-size community surgicenter was conducted for CPT codes 25607, 25608, and 25609 between 1/1/2014 and 6/1/2014, and associated implant costs and facility reimbursements were collected. A unique stochastic simulation model was developed from derived probabilities, reimbursements, and costs, and analyzed by Monte Carlo simulation. RESULTS: Reimbursement to the facility for distal radius ORIF cases ranged from $1,102.20 to $7,393.86, with an average of $3,824.56. Per case operating costs to the facility ranged from $1,250 to $7,270, with an average of $2,817.42. In the US, variations in implant cost 25% above or below the mean translates to annual operating profits realized by facilities ranging from a loss of $57,047,720 to profits of $55,189,729. On average, per case operating costs for distal radius fractures need to be less than $2956 for facilities to realize a per case profit. CONCLUSION: Value based purchasing is by necessity becoming integrated into clinical decision making by orthopaedic surgeons. Variations of 25% around the mean per case operating cost can vary facility operating margins by $112,237,450 annually. Arming the orthopaedic surgeon with the realities of the cost of implant selection in the operative management of distal radius fractures will lead to better value based decision making, substantial cost savings to the US hospital system, and ultimately payers and patients.
BACKGROUND: There are a number of different implant choices for surgical treatment of distal radius fractures, often determined by surgeon preference or availability. Although no one volar plate demonstrates superior outcomes, there are significant cost differences absorbed by hospitals and surgical centers. This purpose of this study is to characterize the economic implications of implant selection in the surgical management of distal radius fractures. METHODS: A retrospective review of billing records at a mid-size community surgicenter was conducted for CPT codes 25607, 25608, and 25609 between 1/1/2014 and 6/1/2014, and associated implant costs and facility reimbursements were collected. A unique stochastic simulation model was developed from derived probabilities, reimbursements, and costs, and analyzed by Monte Carlo simulation. RESULTS: Reimbursement to the facility for distal radius ORIF cases ranged from $1,102.20 to $7,393.86, with an average of $3,824.56. Per case operating costs to the facility ranged from $1,250 to $7,270, with an average of $2,817.42. In the US, variations in implant cost 25% above or below the mean translates to annual operating profits realized by facilities ranging from a loss of $57,047,720 to profits of $55,189,729. On average, per case operating costs for distal radius fractures need to be less than $2956 for facilities to realize a per case profit. CONCLUSION: Value based purchasing is by necessity becoming integrated into clinical decision making by orthopaedic surgeons. Variations of 25% around the mean per case operating cost can vary facility operating margins by $112,237,450 annually. Arming the orthopaedic surgeon with the realities of the cost of implant selection in the operative management of distal radius fractures will lead to better value based decision making, substantial cost savings to the US hospital system, and ultimately payers and patients.
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