Trends in Revision Total Hip Arthroplasty Cost, Revenue, and Contribution Margin 2011 to 2021

Abstract

BackgroundRevision total hip arthroplasty (rTHA) is a costly procedure, and its prevalence has been steadily increasing over time. This study aimed to examine trends in hospital cost, revenue, and contribution margin (CM) in patients undergoing rTHA. MethodsWe retrospectively reviewed all patients who underwent rTHA from June 2011 to May 2021 at our institution. Patients were stratified into groups based on insurance coverage: Medicare, government-managed Medicaid, or commercial insurance. Patient demographics, revenue (any payment the hospital received), direct cost (any cost associated with the surgery and hospitalization), total cost (the sum of direct and indirect costs), and CM (the difference between revenue and direct cost) were collected. Changes over time as a percentage of 2011 numbers were analyzed. Linear regression analyses were used to determine the overall trend’s significance. Of the 1,613 patients identified, 661 were covered by Medicare, 449 by government-managed Medicaid, and 503 by commercial insurance plans. ResultsMedicare patients exhibited a significant upward trend in revenue (P < .001), total cost (P = .004), direct cost (P < .001), and an overall downward trend in CM (P = .037), with CM for these patients falling to 72.1% of 2011 values by 2021. ConclusionIn the Medicare population, reimbursement for rTHA has not matched increases in cost, leading to considerable reductions in CM. These trends affect the ability of hospitals to cover indirect costs, threatening access to care for patients who require this necessary procedure. Reimbursement models for rTHA should be reconsidered to ensure the financial feasibility of these procedures for all patient populations.