January 1996 Bulletin

Containing the cost of orthopaedic implants

In this era of cost-consciousness, which can limit resources, it is important that orthopaedic surgeons be mindful of the expense of orthopaedic implants and their impact on health care costs for the treatment of musculoskeletal conditions. Analyses reveal that the costs of comparable implant systems can vary substantially.

Approximately two-thirds of patients receiving joint implants are Medicare beneficiaries. Their hospitalization is financed by Medicare under the Diagnosis Related Group (DRG) payment system. Currently, a typical joint implant (e.g., a porous coated system) consumes a significant percentage of the total DRG payment. As a result, hospitals share an interest in the type of implants being used by orthopaedic surgeons, as the hospital attempts to control costs and maintain clinical programs. This interest, however, should not interfere with the surgeon's goal of providing the highest quality care.

While the final authority for selecting implants should rest with the treating physician, the Academy believes orthopaedic surgeons within a hospital should work collaboratively, with hospitals, operating room administrators, and other orthopaedic surgeons to adopt reasonable criteria for selecting implants based on individual patient needs. These patient implant needs should be matched with appropriate implant design, and orthopaedic surgeons and hospitals should develop strategies for cost containment in purchasing appropriate implants, e.g., competitive bidding and consignment negotiations.

May 1992
Revised December 1995

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