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The Economic Significance of Orthopaedic Infections

Hackett, Daniel J. MD; Rothenberg, Adam C. MD; Chen, Antonia F. MD, MBA; Gutowski, Christina MD, MPH; Jaekel, David PhD; Tomek, Ivan M. MD, FRCSC; Parsley, Brian S. MD; Ducheyne, Paul PhD; Manner, Paul A. MD, FRCSC

JAAOS - Journal of the American Academy of Orthopaedic Surgeons: April 2015 - Volume 23 - Issue suppl - p S1–S7
doi: 10.5435/JAAOS-D-14-00394
Supplement Article

Musculoskeletal infections are a leading cause of patient morbidity and rising healthcare expenditures. The incidence of musculoskeletal infections, including soft-tissue infections, periprosthetic joint infection, and osteomyelitis, is increasing. Cases involving both drug-resistant bacterial strains and periprosthetic joint infection in total hip and total knee arthroplasty are particularly costly and represent a growing economic burden for the American healthcare system. With the institution of the Affordable Care Act, there has been an increasing drive in the United States toward rewarding healthcare organizations for their quality of care, bundling episodes of care, and capitating approaches to managing populations. In current reimbursement models, complications following the index event, including infection, are not typically reimbursed, placing the burden of caring for infections on the physician, hospital, or accountable care organization. Without the ability to risk-stratify patient outcomes based on patient comorbidities that are associated with a higher incidence of musculoskeletal infection, healthcare organizations are disincentivized to care for moderate- to high-risk patients. Reducing the cost of treating musculoskeletal infection also depends on incentivizing innovations in infection prevention.

From Georgia Regents University, Augusta, GA (Dr. Hackett), the University of Pittsburgh School of Medicine, Pittsburgh, PA (Dr. Rothenberg), the Rothman Institute (Dr. Chen), Thomas Jefferson University Hospitals (Dr. Gutowski), Exponent Engineering and Scientific Consulting (Dr. Jaekel), and the Department of Bioengineering, University of Pennsylvania (Dr. Ducheyne), Philadelphia, PA, the Department of Orthopaedic Surgery, Alice Peck Day Memorial Hospital, Lebanon, NH (Dr. Tomek), Baylor College of Medicine, Bellaire, TX (Dr. Parsley), and the University of Washington, Seattle, WA (Dr. Manner).

Dr. Chen or an immediate family member is an employee of Novo Nordisk; serves as a paid consultant to Joint Purification Systems and Pfizer; and has received research or institutional support from 3M. Dr. Tomek or an immediate family member has received research or institutional support from Stryker, Zimmer, and DePuy. Dr. Parsley or an immediate family member has received royalties and research or institutional support from ConforMIS; is a member of a speakers’ bureau or has made paid presentations on behalf of ConforMIS and Nimbic Systems; serves as a paid consultant to and has stock or stock options held in Nimbic Systems; and serves as a board member, owner, officer, or committee member of the American Association of Hip and Knee Surgeons. Dr. Ducheyne or an immediate family member has stock or stock options held in Gentis and Xerothera. Dr. Manner or an immediate family member is an employee of JointMetrix Medical. None of the following authors or any immediate family member has received anything of value from or has stock or stock options held in a commercial company or institution related directly or indirectly to the subject of this article: Dr. Hackett, Dr. Rothenberg, Dr. Gutowski, and Dr. Jaekel.

Postoperative orthopaedic infections result in substantial morbidity for patients, both physically and mentally. In addition, the cost of care is considerable, given the outlay of surgical, medical, and social resources required.

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Economic Burden of Musculoskeletal Infection in the United States

Musculoskeletal Infection

Musculoskeletal infection is a leading cause of chronic pain and physical disability. The incidence of musculoskeletal infection, including periprosthetic joint infection (PJI), soft-tissue infection, septic arthritis, and osteomyelitis, is increasing in association with an aging population and growing rates of diabetes and obesity.1,2 Of special concern is a disproportionate increase in infections caused by drug-resistant strains, such as methicillin-resistant Staphylococcus aureus (MRSA).1 Recent estimates place the overall infection rate following orthopaedic surgery involving internal devices at approximately 5%, including a 1-year incidence of PJI of 0.7%.2,3

Costs associated with the management of musculoskeletal infections vary widely but are higher than those associated with preceding interventions, such as elective joint arthroplasty or fracture treatment. Infections requiring surgical intervention, such as osteomyelitis and septic arthritis, have higher costs than those without intervention, such as bacteremia or surgical site infections.4 Treatment of necrotizing fasciitis can be particularly costly, with charges ranging from $20,000 to $866,000 and an overall mortality rate >10%.5,6

Management of antibiotic-resistant infections of skin, soft tissue, bone, or total joint arthroplasty is more costly compared with that for infection with antibiotic-sensitive strains.7-9S aureus is the most common pathogen present in musculoskeletal infection, and methicillin resistance of this organism has been observed at an increasing frequency during the past decade.10,11 Anderson et al10 reported in 2007 that, compared with infections caused by sensitive S aureus strains, infections caused by MRSA were associated with increased hospital charges of $20,000 or more and a 2.6-times higher mortality rate within 90 days of surgery. In 2010, Parvizi et al7 showed a significantly higher cost of care for treatment of methicillin-resistant PJI compared with antibiotic-sensitive strains, at around $107,000 and $68,000 per case, respectively.

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Periprosthetic Joint Infection in Total Hip and Total Knee Arthroplasty

PJI is the third most frequent reason for revision of total hip arthroplasty (THA) and one of the most frequent reasons for revision of total knee arthroplasty (TKA) (14.8% and 25.2%, respectively).12,13 The number of procedures performed nationally to treat PJI, and the overall burden of PJI, can be estimated using datasets from the Nationwide Inpatient Sample (NIS).14,15 In 2001, the revision burden for PJI as a proportion of the total number of primary and revision arthroplasties for THA and TKA was 1.99% (confidence interval [CI], 1.78% to 2.21%) and 2.05% (CI, 1.86% to 2.23%), respectively. By 2011, the most recent dataset available from NIS, the infection burden for both THA and TKA had increased to 2.46% (CI, 2.24% to 2.68%) and 2.49% (CI, 2.28% to 2.69%), respectively, although the increase was significant only for THA (Spearman rho = 0.63, P = 0.04). The average infection prevalence across the sampled decade remained similar between THA (2.22%) and TKA (2.27%).

A more notable increase was observed in the raw numbers of infected arthroplasties, which grew from 4,545 and 7,113 in 2001 to 8,858 and 17,773 in 2011 for THA and TKA, respectively. Using a Poisson regression model that was previously developed by Kurtz et al15 and coupling this with population projections from the US Census Bureau, NIS data were used to project the number of infected hip and knee arthroplasty procedures through 2020.14 The model predicted an increase in the number of procedures for the treatment of PJI to an estimated 15,691 cases (CI, 14,630 to 16,752) associated with THA and an estimated 42,367 (CI, 39,555 to 45,179) with TKA by 2020, for a total of >58,000 cases per year14,15 (Figure 1). Alternate versions of the model using National Health Expenditure data have been compared with projections based on US Census Bureau data and have yielded similar results.16 Despite the increase in PJI incidence, NIS data have also revealed a sharp decline in length of hospital stay for patients treated for PJI. The average length of hospitalization for PJI treatment declined from 11.5 days (CI, 10.3 to 12.7 days) in 2001 to 9.0 days (CI, 8.5 to 9.6 days) in 2011 for THA (Spearman rho = −0.913, P < 0.001) and from 9.3 days (CI, 8.2 to 10.4 days) to 7.2 days (CI, 6.9 to 7.6 days) for TKA (Spearman rho = −0.973, P < 0.001).17

Figure 1

Figure 1

Because of increasing numbers of revisions for infection, analysis of NIS data has shown that there is a greater economic burden on the healthcare system for infected revisions, even though the average estimated hospital cost per procedure remained relatively stable in the 2000s.15 The estimated total hospital cost in the United States incurred for PJI treatment grew from $365 million in 2001 to $771 million in 2011. This is projected to surpass $1.1 billion by 2015 and will cost US hospitals $1.63 billion (CI, $1.57 billion to $1.69 billion) by 2020 (Figure 2). This places a substantial burden on the US healthcare system.

Figure 2

Figure 2

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Reimbursement Models

Bundled payments and accountable care organizations (ACOs) are two models recently proposed to improve efficiency of care while controlling cost. However, these models as currently described do not take infections into account.

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Bundled Payments

In a bundled payment model, a single reimbursement is made for an episode of care for all services provided within a healthcare system, including hospitals, physicians, and post–acute care facilities.18 This model assumes that physicians have control of their spending and can improve savings by making all members of a healthcare system more efficient in resource utilization, thereby allowing for cost savings between physicians, hospitals, and postoperative facilities. However, bundled payment models do not account for unexpected or uncontrollable factors that can drive costs higher and thus eliminate any planned savings. For example, high-risk patients with many comorbidities may have more complications and readmissions that are costly to hospitals and are not reimbursed. This is particularly true for orthopaedic infection.

There are four models of bundled payments; three rely on retrospective payment, and the fourth involves prospective payment19 (Table 1). The first model accounts only for the initial acute hospital stay, while the second model includes the acute hospital stay and post-acute care for a total of 90 days. The third model also covers 90 days after admission as well as services starting within 30 days of discharge, including skilled nursing facilities, rehabilitation, long-term acute care, and home health services. The fourth model is a prospective, single payment for the hospital and physicians that covers the acute inpatient stay and most readmissions within 30 days of hospital discharge. If an infection occurs under models 2, 3, or 4, especially if a readmission is required, the cost of treating the infection may not be covered by the bundled payment.

Table 1

Table 1

To reduce their financial risk, physician and health systems shouldering the burden of treating orthopaedic infections must select appropriate patients and optimize their care before admission. Doing so may include strategies such as placing surgical restrictions on patients with a body mass index over a certain value and encouraging smoking cessation, nutrition consults, or medical care to treat conditions associated with a higher risk of infection, such as diabetes.20 If patients with a high number of comorbidities are at high risk for developing infection before surgery, these patients may have to undergo surgical delay and medical optimization.

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Accountable Care Organizations

In the United States, debate over health care has largely focused on the provisions of the Affordable Care Act (ACA) aimed at expanding health insurance coverage to all Americans, most notably the individual mandate requirement.21 The ACA, however, also creates initiatives that encourage the formation of ACOs; these are clinically integrated organizations of primary care physicians and other providers that, through various payment mechanisms, are rewarded for both raising the quality and lowering the cost of care provided to their patients.22 Although the definition of ACOs is evolving, their underlying goal is to transform healthcare delivery by focusing on the so-called three-part aim: improving the experience of care for individuals, improving the health of populations, and lowering per capita healthcare costs.23 An ACO must have the following elements: (1) the ability to provide care across a continuum of settings, including, at minimum, ambulatory and inpatient settings for a minimum of 5,000 Medicare beneficiaries; (2) the capability for planning budgets and resources and for participating in shared savings; and (3) sufficient size to monitor and report on quality measurements.24

To achieve those goals, existing payment models and healthcare delivery systems need to be reformed. The Centers for Medicare and Medicaid Services (CMS), as well as private insurer payers, are currently testing several reimbursement models, all of which represent a departure from traditional fee-for-service.25 These new models include refinements to fee-for-service that allow Medicare to reward healthcare organizations for delivering care that exceeds quality benchmarks and comes in below agreed-upon cost levels; bundled care for defined episodes of care, such as surgical procedures as described above; and capitated approaches to managing populations.

Because of the reimbursement reform from which the ACOs have arisen, the manner in which physicians and health systems approach the potential for adverse events during treatment will need to evolve, as well. This is especially true in the case of major elective procedures, such as hip and knee arthroplasty and spinal fusion, in which surgical rates in the United States have been climbing quickly. With limited ability to bill payers for post–index event complications, health systems in an ACO model will absorb the cost of treatment. A deep periprosthetic hip or knee infection can quickly result in charges in excess of $100,000, and successful eradication of complex or drug-resistant surgical infections is far from guaranteed.15

Risk assessment and risk reduction strategies are therefore poised to take on a central role in how health systems approach musculoskeletal surgery infection risk in an ACO setting.26 As in bundled payment models, it is certain that the definition of an “appropriate surgical patient” will change because risk behavior modification and medical optimization will become prerequisites to being offered elective surgery. Factors known to be associated with increased surgical risk (eg, obesity, tobacco use, obstructive sleep apnea, poor diabetic control) are likely to be early targets of these interventions.27 In some cases, multidisciplinary care of complex arthroplasty patients may commence well before the health system’s providers agree to operate.

The emergence of ACOs in the United States is likely to change how elective musculoskeletal surgery is delivered, and it will especially affect patients with degenerative disease of the hip, knee, and spine who are seeking reconstructive procedures. Numerous practical and ethical challenges are likely to be encountered along the way.28

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Economic Disincentives for Hospitals and Surgeons

As the number of cases performed increases, the total cost of THA and TKA continues to rise. According to the 2014 Medicare Inpatient Prospective Payment Systems (IPPS) Final Rule, in 2005, the annual hospital charges for primary THA and TKA totaled $3.95 billion and $7.42 billion, respectively.29,30 Over a 10-year period, the aggregate costs for THA are projected to increase by 340% to $17.4 billion per fiscal year by FY 2015, and for TKA, by 450% to $40.8 billion per fiscal year by FY 2015. Medicare is the single largest payer for these procedures, covering approximately two thirds of all THAs and TKAs performed in the United States.29 THA and TKA procedures combined account for the largest procedural cost in the Medicare budget.

As a result, the current reimbursement model for musculoskeletal infections is undergoing a period of transition. Previously, hospitals and providers would be reimbursed for the admission and surgical procedures performed on patients who presented with postoperative infections. Beginning with the Deficit Reduction Act of 2005, Congress required the Secretary of Health and Human Services to identify conditions that (1) are high cost or high volume or both, (2) result in the assignment of a case to a diagnosis-related group that has a higher payment when present as a secondary diagnosis, and (3) could reasonably have been prevented through the application of evidence-based guidelines. For the conditions identified and discharges occurring on or after October 1, 2008, CMS implemented the “Do Not Pay” rule so that hospitals would not receive additional payment for cases in which one of the selected conditions was not present on admission.31 That is, the case would be paid as though the secondary diagnoses were not present. Initially, infections following THA and TKA were included on this list, but following extensive comments by the orthopaedic community, among others, infections following hip and knee arthroplasty were removed from the Final Rule. Hip and knee arthroplasties continue to be reviewed for possible inclusion on the “Do Not Pay” list but, to date, this has not been adopted. The intent of this rule was to motivate hospitals and physicians to increase their efforts to prevent postoperative complications resulting from infection. Implementing this rule to include patients undergoing hip or knee arthroplasties can result in a much more significant economic burden to the hospitals because of the expense of the implants alone.

Another area of concern is the inability to predict which patients will suffer complications. If patients who are high risk because of multiple factors (eg, uncontrolled diabetes, smoking, lower socioeconomic level) are more likely to develop a postoperative infection despite excellent efforts by the hospital and/or physician team, these patients may be excluded from care. Such exclusion may result in the unintended development of medical refugees. In the spring of 2014, a National Quality Forum study commissioned by the Obama administration recommended sweeping changes in payment policy after noting that current measures of quality are fundamentally flawed. The panel concluded that the measures of healthcare quality and performance, widely used by Medicare and private insurers in calculating financial rewards and penalties, should be adjusted for various “sociodemographic” factors.32 Public reporting of non–risk-adjusted hospital information is now available online through the website (, including each hospital’s 30-day unscheduled readmission rate, hospital-acquired infection rate, and surgical complication rates. This is part of the CMS focus on rewarding hospitals for delivering services of higher quality and higher value through the new Medicare Value-Based Purchasing program and the Hospital Readmissions Reduction Program. Beginning in 2015, hospitals that are deemed below the national standard will be penalized up to 1.5% of their Medicare payments to encourage improvements in quality and decrease in cost for unnecessary care.33

Physician reimbursement will also come under increased scrutiny. A parallel public website under CMS (http:/ will also present the individual physician data on the 30-day unscheduled readmission rate, hospital-acquired infection rate, and surgical complication rates. Currently, this information is extracted from CMS administrative data that do not provide for risk stratification or adjustment for case complexity, comorbidities, or patient socioeconomic status. These physician comparison data will also be used in an adjustment in physician payment based on benchmarking for quality. In addition, patient satisfaction surveys are also being made available to the public, and these data will ultimately be used to determine the physician payment rate. This could result in significant negative consequences for patient access to quality care in the future.

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How to Take Infection Into Account

Treatment of PJI presents substantial challenges in terms of resources, both for the treating physicians and for the hospital system as a whole. Total joint arthroplasty is typically regarded as a prime candidate for bundled care programs because of high reproducibility of good results, low complication rates, and predictable expense. However, this is not the case for PJI. Kurtz et al15 examined the NIS database for the years 2001 to 2009 and noted that the average charges for uncomplicated primary THA and TKA were roughly $30,000 and $25,000, respectively. Charges for hip PJI increased from $73,000 to $94,000 over the decade, whereas those for knee PJI rose from $59,000 to $75,000 over the same period. Kapadia et al34 looked at costs at their tertiary care center and matched 21 patients with PJI to 21 patients with uncomplicated primary joint arthroplasty. The patients with PJI had significantly longer hospitalizations (5.3 versus 3.0 days), more readmissions (3.6 days versus 0.1 day), and more clinic visits (6.5 versus 1.3 days) compared with the matched group, respectively. The mean annual cost was significantly higher in the infected cohort ($116,383; range, $44,416 to $269,914) compared with the matched group ($28,249; range, $20,454 to $47,957). These recent studies corroborate the 1996 study by Hebert et al,35 which noted that the costs of treating PJI were three to four times higher than those for performing a primary knee arthroplasty.

Members of the symposium expressed significant concern regarding the potential impact of the ACO model on prevention and treatment of PJI. The first issue of concern is the assumption that surgical infection would and should be considered a “never event.” For example, the Bree Collaborative in Washington State, established by the legislature in 2011, has recently proposed a “warranty” for total joint arthroplasty, which would assign financial and legal responsibility to the index hospital and surgeon for PJI within 90 days of the procedure.36 Attendees noted that this would penalize providers for events often beyond their control. A second issue involved the role of tertiary care centers as “safety net” hospitals, which provide care to the indigent and disadvantaged as part of their core mission. Dr. Ashish K. Jha, a professor at the Harvard School of Public Health, has found that hospitals treating the most low-income patients had their payment rates reduced in the latest round of Medicare’s program that rates the quality of hospitals. The hospitals with the fewest low-income patients received bonuses.37 Finally, attendees raised the potential for denial of care to patients perceived as high-risk because hospitals and surgeons may resort to “cherry picking” to avert financial loss.38

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Economics of Innovation

The cost of infections not only is made up of the direct costs in terms of number of infected cases and the cost per individual treatment, but it also comprises a steep economic price arising from the dearth of optimal methods for prevention and treatment of infection. For many years now, there has been little incentive for the pharmaceutical industry to have programs or departments that focused on the ever-increasing potency and threat of orthopaedic infections. The issue is well known: developing a successful new drug ab initio costs more than $1 billion, and with the limited price tag that antibiotics command, resource utilization at pharmaceutical companies has never been marshaled toward dealing with this threat.

Without a vibrant field that advances a multiplicity of excellent concepts, prevention strategies are also not convincing. The long and the short of it is that prevention could be more robust, thereby reducing cost. This adds to the fact that if treatments were more efficacious, treatment costs would also be significantly less.

Conceptually, several measures might create an impetus for renewed attention to developing very much needed infection prevention and treatment products. Symposium members recommended the following: (1) revision of regulatory procedures whereby, without sacrificing safety, new treatments are approved based on smaller patient populations, especially for indications without other medical options available. Fast-track review procedures would also increase the rate of progress. (2) Price elasticity for treatments and products that address indications for which there are limited, if any, options; regulatory centers such as CMS can play an important role in this regard.

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The state of musculoskeletal infections in 2014 is one in which the incidence of infections, including those involving drug-resistant strains, is increasing. As the incidence of infection increases, costs for treatment are escalating. For instance, rates of revision surgery for periprosthetic joint infection in total knee and hip procedures are expected to more than double between 2010 and 2020, representing a major economic burden and looming crisis. With the initiation of the ACA, medical reimbursement structures such as bundled payments and ACOs have been formed with the intention to reduce costs and improve quality of care. These are laudable goals with powerful mechanisms meant to eliminate unnecessary expenses in caring for patients. However, the incentives intended to contain costs make it difficult, if not impossible, for healthcare organizations to be reimbursed in cases of postoperative infection that may be unavoidable without abandoning large swaths of the American population (eg, those with nonmodifiable risk factors for infection) in need of orthopaedic care. As cost-containment reimbursement models are integrated into the US healthcare system, improvements are needed that can account for risk stratification in cases of postoperative infection. Looking forward, reducing the economic burden of musculoskeletal infections will depend on a multipronged approach that contains costs, incentivizes effective care, and spurs innovation in infection prevention and treatment.

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Evidence-based Medicine: Levels of evidence are described in the table of contents. In this article, references 32 and 33 are level III studies. References 1-10, 12-13, 15-20, 23, 26-31 are level V expert opinion.

References printed in bold type are those published within the past 5 years.

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      © 2015 by American Academy of Orthopaedic Surgeons