The Economic Value of Customized versus Off-the-Shelf Knee Implants in Medicare Fee-for-Service Beneficiaries.

Abstract

Background: The amount of total knee arthroplasty (TKA) procedures performed in the United States has been increasing steadily and is projected to reach 3 million procedures annually by 2030 in patients aged ≥65 years. A rise in TKA procedures will increase spending on osteoarthritis treatments, which is currently the second highest category of spending for Medicare patients. Because TKA procedures account for a substantial amount of total osteoarthritis spending, payers and providers are examining methods to reduce spending on the procedure while improving clinical outcomes. Customized individually made implants have been shown to improve clinical outcomes, such as physical function and limb alignment, compared with off-the-shelf implants; however, the economic impact of customized implants has yet to be established.

Objective: To analyze TKA episode expenditures among Medicare fee-for-service (FFS) members who received a customized or an off-the-shelf implant.

Methods: Members undergoing a TKA procedure using the customized implant technology were identified in the Medicare FFS database and were propensity matched (1:5) to a cohort of members who received off-the-shelf implants. Reimbursement for the initial procedure (ie, customized and off-the-shelf procedure), a preoperative computed tomography scan, and 12-month postoperative healthcare utilization were analyzed. The overall episode expenditures were used to construct a budget impact model to calculate the per-member per-month (PMPM) spending for Medicare FFS beneficiaries.

Results: The average total episode spending was significantly lower among the customized implant cohort ($18,585) compared with the off-the-shelf implant cohort ($20,280; a $1695 difference; P <.0001). This savings resulted in $0.08 PMPM savings for the Medicare FFS program when a portion (10%) of eligible members received the customized implant technology. A sensitivity analysis, which varied with the customized implant market penetration and the percent of customized implant-eligible procedures, indicated that the savings could be as great as $0.28 PMPM.

Conclusion: The results of this analysis demonstrate that the use of customized implants in TKA procedures can achieve substantial savings versus off-the-shelf procedures for the Medicare FFS program, and this savings is primarily driven by a lower average initial procedure cost and lower postoperative spendings for inpatient services and skilled-nursing facility costs.