Value of Total Knee Replacements to Society

With more and more adults getting knee replacements, analysts are taking a closer look at the costs versus benefits to the individual patient and to society. Society can include employers and insurance providers (payers). You are a part of “society” in this sense if you pay taxes that finance Medicare, a principal payer of many surgical procedures in older adults.

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 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.

This is the first study to take a closer look at all costs associated with knee replacement versus conservative care (without surgery) for patients with end-stage (severe) osteoarthritis. They studied the U.S. population (ages 40 and older) who received a total knee replacement in the year 2009.

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

This information will be very helpful if and when insurance companies and other third party payers suggest finding ways to limit who qualifies for a total knee replacement (referred to as coverage restrictions). Likewise, if higher copayments are proposed, research like this comparing costs and estimating savings to society is very important.

Other 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.

In conclusion, total knee replacements are cost-effective when viewed from a societal perspective. This study showed a positive net benefit to society in terms of cost savings for all age groups but especially those younger than 70 years old (and especially for adults in their early 40s). Quality of life is improved with surgery, which can also translate into dollars saved. Payers and policy makers should take this information into consideration when making plans to restrict access to knee replacement surgery.