When news reports talk about indirect cost savings of surgery (like I heard one report on how knee replacements cost millions each year but save taxpayers billions), what are they referring to? I’m considering a knee replacement and I would like to save as much money as possible. Maybe this will help me.


There are three ways to evaluate the “cost” of surgical versus conservative care for knee osteoarthritis: 1) direct costs, 2) indirect costs, and 3) quality of life measures. Direct costs include any and all medical expenses for any treatment (surgical or nonsurgical) provided.

Indirect costs refer to lost wages when the patient can no longer work full-time or can’t work at all and to disability payments paid out over time. Indirect costs to the employer occur due to employee absenteeism and lost productivity. Quality of life is measured based on patients’ perception of pain, motion (loss of motion), function (loss of function), and level of disability.

Research shows that there was a 12 billion dollar savings to society in one year (2009) for the 600,000 total knee replacements that were done in that year. They concluded this represents a significant amount of money attributed to extra work years (and increased income) made possible by the surgery.

Factors affecting lifetime savings associated with total knee replacements include age and work status. Younger patients have longer to work and earn money. The study showed that patients in the youngest category (40 to 44 years old) could potentially (each) earn $174,364 more over a lifetime by having the surgery compared with the over 80 age group.

Older adults also had higher total medical costs regardless of whether they had surgery or were treated conservatively. But the cost of a total knee replacement for severe, limiting osteoarthritis in the older group was also offset by fewer health problems (heart attacks, strokes) compared with patients of the same age with equal joint disease who did not have knee replacement surgery.

In a parallel analysis, work status (receiving disability, retired, or working part- or full-time) was equally important in calculating cost to society. As you might expect, those individuals who continue working and earning income generate greater savings compared with patients who receive disability checks each month.

You won’t necessarily receive a check that equals the amount of indirect costs saved by having a knee replacement. But your ability to keep working and your value to your employer in terms of productivity will bring you benefits that have a direct and indirect monetary value. Improved quality of life is another value added that can be measured as an benefit that reduces the cost of the procedure when measured by research analysts.