Hospital Revenue,Cost, and Contribution Margin in Inpatient Versus Outpatient Primary Total Joint Arthroplasty

BackgroundRemoval of primary total knee arthroplasty (TKA) and primary total hip arthroplasty (THA) from the inpatient-only list has financial implications for both patients and institutions. The aim of this study was to evaluate and compare financial parameters between patients designated for inpatient versus outpatient total joint arthroplasty.MethodsWe reviewed all patients who underwent TKA or THA after these procedures were removed from the inpatient-only list. Patients were statistical significance into cohorts based on inpatient or outpatient status, procedure type, and insurance type. This included 5,284 patients, of which 4,279 were designated inpatient while 1,005 were designated outpatient. Patient demographic, perioperative, and financial data including per patient revenues, total and direct costs, and contribution margins (CMs) were collected. Data were compared using t-tests and Chi-squared tests.ResultsAmong Medicare patients receiving THA, CM was 89.1% lower for the inpatient cohort when compared to outpatient (P < .001), although there was no statistical significance difference between cohorts for TKA (P = .501). Among patients covered by Medicaid or Government-managed plans, CM was 120.8% higher for inpatients receiving THA (P < .001) when compared to outpatients and 136.3% higher for inpatients receiving TKA (P < .001).ConclusionOur analyses showed that recent costs associated with inpatient stay inconsistently match or outpace additional revenue, causing CM to vary drastically depending on insurance and procedure type. For Medicare patients receiving THA, inpatient surgery is financially disincentivized leaving this vulnerable patient population at a risk of losing access to care.Level III EvidenceRetrospective Cohort Study.