Hospital Payments Increase as Payments to Surgeons Decrease for Common Inpatient Orthopaedic Procedures

Introduction: As healthcare costs continue to increase in the United States, it is important to understand the trends in the allocation of healthcare spending for common orthopaedic surgical procedures. We investigated the recent trends in (1) total net payments (for episode of care), (2) payments to hospitals, (3) payments to physicians, (4) payments to physicians as a percentage of total net payments, and (5) regional variation in hospital and physician payments for four common orthopaedic procedures. Methods: Using a private insurance claims database, we analyzed the payments to US hospitals and physicians from 2010 to 2016 for primary total hip arthroplasty (THA) (n = 128,269), total knee arthroplasty (TKA) (n = 223,319), 1-level anterior cervical diskectomy and fusion (ACDF) (n = 51,477), and 1-level lumbar-instrumented posterior spinal fusion (PSF) (n = 45,680). Regional variations in payments were also assessed. Trends were analyzed using linear regression models adjusting for age, sex, comorbidities, duration of hospital stay, and inflation (alpha = 0.05). Results: Inflation-adjusted total net payments for the episode of care increased by the following percentages per year: 5.2% for ACDF, 3.2% for PSF, 2.9% for TKA, and 2.6% for THA. Annual inflation-adjusted hospital payments increased significantly for all 4 procedures, whereas annual inflation-adjusted physician payments decreased by -2.2%/year for PSF, -1.5%/year for TKA, -1.1 %/year for THA, and -0.4%/year for ACDF (all, P < 0.001). As a percentage of total net payments, physician payments decreased markedly for ACDF (-4.6%), PSF (-3.1%), TKA (-2.1%), and THA (-1.8%). Hospital and physician payments varied significantly by region and were both highest in the West (P < 0.001). Conclusions: From 2010 to 2016, inflation-adjusted total net payments for 4 common orthopaedic surgical procedures increased markedly, as did payments to the US hospitals for these procedures. Payments to orthopaedic surgeons for these procedures decreased markedly during the same period.