A new study found substantial price variation for total joint arthroplasty (TJA) that is not accounted for by the quality of care, suggesting that a mismatch between price and quality exists. The study, published in Clinical Orthopaedics and Related Research journal, examined how prices insurers negotiate for TJA paid to a single, large health system vary across payer types, and whether mean prices insurers negotiate for TJA associated with hospital quality.
Researchers analyzed publicly available data from 22 hospitals in a single, large regional health system, four of which were excluded owing to incomplete quality information. They chose to use data from this single health system to minimize the confounding effects of between-hospital reputation or branding and geographic differences in the cost of providing care. This health system consists of large and small hospitals serving urban and rural populations, providing care for more than 3 million individuals. For each hospital, negotiated prices for TJA were classified into five payer types: commercial in-network, commercial out-of-network, Medicare Advantage (plans to which private insurers contract to provide Medicare benefits), Medicaid, and discounted cash pay. Traditional Medicare plans were not included because the prices are set statutorily, not negotiated. Researchers obtained hospital quality measures from the Centers for Medicare and Medicaid Services. Centers for Medicare and Medicaid Services quality measures included TJA-specific complication and readmission rates in addition to hospital-wide patient survey star rating (measure of patient care experience) and total performance scores (aggregate measure of clinical outcomes, safety, patient experience, process of care, and efficiency). They evaluated the association between the mean negotiated hospital prices and Centers for Medicare and Medicaid Services quality measures.
Researchers concluded efforts to better match the quality of care with negotiated prices such as matched quality and price reporting mechanisms, which have been shown to increase the likelihood of choosing higher-value care in TJA, could improve the value of care.
- The Price-Quality Mismatch: Are Negotiated Prices for Total Joint Arthroplasty Associated With Hospital Quality in a Large California Health System? Clinical Orthopaedics and Related Research. December 13, 2022.