Comparison of the hospital cost of primary and revision total knee arthroplasty after cost containment

Revision total knee arthroplasty (TKA) consumes more time, more work, and more supplies than primary TKA. This study compared the hospital cost of primary and revision TKA after the introduction of cost-containment programs (implant standardization, clinical pathway, and competitive bid implant purchasing) at our hospital. Hospital financial records of 207 primary unilateral TKA operations and 32 revision TKA operations performed from October 1993 through September 1995 were analyzed. A cost-accounting system provided actual hospital cost data for each procedure. Accurate calculation of hospital income or loss was determined for all 239 procedures. The average hospital length of stay was 4.7 days for primary unilateral TKA and 5.1 days for revision TKA. There were 26 three-component revision operations and 6 one- or two-component revision operations. The average hospital cost was $10,421 for primary TKA and $11,906 for revision TKA. The average net hospital income (hospital revenue - hospital expense) was $3211 for primary TKA and $1853 for revision TKA. The payer mix included indemnity insurance, Medicare, Medicaid, managed care, and workmen's compensation. All payers were profitable except for Medicaid and selected managed care contracts for both primary and revision TKA. As a result of cost-containment programs, revision TKA can be profitable at our institution.