Special communication
Looking Upstream: Factors Shaping the Demand for Postacute Joint Replacement Rehabilitation

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Abstract

Tian W, DeJong G, Brown M, Hsieh C-H, Zamfirov ZP, Horn SD. Looking upstream: factors shaping the demand for postacute joint replacement rehabilitation.

Since 1993, the numbers of hip and knee replacements in the United States have increased 2-fold to 3-fold while lengths of stay in acute care have decreased by about half, leading to a significant growth in the use of postacute rehabilitative care for patients with a joint replacement. To document these trends, this article uses secondary analysis of acute hospital discharge survey data and evaluates projections to 2030. This article uses a market approach to identify 3 sets of factors that influence the use of joint replacements: (1) increasing patient demand, (2) increasing supply of practitioners, and (3) the role of fiscal intermediaries. The article reviews underlying epidemiologic trends, growing numbers of orthopedic surgeons performing the procedure, technologic innovations, changing indications for the procedure, changing payer mix, and the effects of payer attempts to contain joint replacement costs. An unintended effect of Medicare payment policy has been to shift costs from acute care to downstream postacute care. Medicare and private health plan reimbursement policies need to take into account this broader perspective and not examine joint replacement care and payment in isolated care settings. Future research and health policy needs to consider the interdependent features of the health care system by linking changes in postacute care with upstream changes both in society at large and in the organization, delivery, and financing of acute care associated with joint replacement.

Section snippets

Rapid Increase in Joint Replacements

Using HCUPnet,1 an online data tool, we reviewed 13 years of data (1993–2005) furnished by the AHRQ to evaluate major trends in the numbers of joint replacements performed in the United States. The AHRQ database, known as NIS, is based on a 20% sample of all hospital discharges in the nation. From 1993 to 2005, there has been nearly a 2.5-fold increase in the number of total knee replacements (identified as ICD-9-CM procedure code 81.54)—from 200,216 to 497,419—and a 1.75-fold increase in the

Variation in Use of Joint Replacement

To focus only on the rapid growth of arthroplastic surgeries overlooks important differences across populations and geographic areas. There remain significant differences in sex, race, and geographic location. Some of these disparities, especially those that relate to race and geography, suggest there may be additional increases in demand should these disparities diminish in the future.

Projections of Future Use

Although the procedure has become increasingly prevalent in the last few decades, researchers expect the trend to continue well into the future. Several studies have been conducted to project the number of primary hip and knee replacements as well as revisions. Based on a 2002 AAOS analysis, Frankowski and Watkins-Castillo21 projected that there will be over 274,000 total hip replacements and 474,000 total knee replacements in 2030. Apparently, this projection greatly underestimated the volume

Dynamics Behind Actual and Projected Growth Rates

Rapid growth in the actual and projected number of joint replacements poses important questions: what is fueling the growth? What are the implications of this growth for payers (eg, Medicare), downstream PAC providers, and health policy makers? To answer these questions, we use a market approach that examines (1) the demand side, (2) the supply side, and (3) the role of financial intermediaries whose policies modulate the interaction between demand and supply sides of the market.

Demand Side

Increasing demand for joint replacements from patients is the major engine driving the growth of joint replacements. Growing numbers of candidates for the procedure and the procedure's presumed underuse among selected groups will continue to contribute to increasing demand.

Aging remains the strongest risk factor associated with development of osteoarthritis, the most common condition leading an individual to seek a joint replacement.23, 24, 25 In 1999, about 12% of all American adults over 65

Supply Side

As demand for total joint replacements increases, changes in supply also are taking place. These changes include increases in the supply of practitioners, advances in surgical technology of joint replacement, and indications for joint replacement. Over the past few decades, these changes have strengthened the provider's capacity to offer more procedures, improved the surgical safety and efficacy, and expanded the target population that could benefit from the procedure.

Changing Payer Mix

Financial intermediaries have played an important and, perhaps, an inadvertent role in the growth of total joint replacement. Because of the age distribution of patients obtaining a joint replacement, Medicare remains the single most important payer and accounted for about 57% of all payment for total joint replacements in 2005. The payer mix for the procedure, however, has changed significantly over the last decade. Medicare's proportion of all charges continues to decline as younger

Implications for Postacute Rehabilitation Care

Upstream trends in society at large and acute care in particular have material downstream effects on demand for, and supply of, postacute rehabilitation services for individuals who acquire a joint replacement.

Oversimplified, increasing numbers of patients with joint replacement who participate in a postacute bed service rehabilitation program—that is, in SNFs or IRFs—are a function of 2 main variables: (1) volume of joint replacement patients and (2) rates at which they are discharged to a

Conclusions

Total joint replacement provides material benefits for patients who seek substantial pain relief, improved function, and quality of life.68 This article reviews the use of total joint replacement in the United States. The number of joint replacements performed has increased rapidly in the last decade, and the trend is predicted to continue in the future. Three groups of factors—increasing demand, increasing supply, and financial incentives—are associated with the use of the procedure. Despite

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    Supported by the HealthSouth Corp, ARA Research Institute of the American Rehabilitation Providers Association, Brooks Health, National Rehabilitation Hospital, American Hospital Association, the Federation of American Hospitals, and others.

    A commercial party having a direct financial interest in the results of the research supporting this article has conferred or will confer a financial benefit on one or more of the authors.

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