A Technology-Enabled Model to Define the Total Costs of Comprehensive Management of Hip and Knee Osteoarthritis: The Missing Link in Value Based Musculoskeletal Care

OBJECTIVES: Enormous expenditure in musculoskeletal care has stimulated interest in efficient payment models, aiming for optimal patient outcomes related to costs. Despite shifts towards measuring health outcomes, gaps remain in understanding care delivery patterns and total costs for achieving optimal patient outcomes. This study aims to define care delivery patterns in the management of hip and knee osteoarthritis (OA) through resource utilization using tracking technology. We establish cost estimates of delivery pattern using time-driven activity-based costing (TDABC).

METHODS: We prospectively evaluated new adult hip and knee OA patients seeking care within a musculoskeletal integrated practice unit. Using Real-Time Location System (RTLS) tracking technology, we monitored patient interactions with care team members during appointments. We developed TDABC models, calculated capacity cost rates and personnel costs using financial data, and stratified patients by care delivery pattern over a one-year episode of care.

RESULTS: For 150 patients who completed a one-year episode of outpatient musculoskeletal care, we identified six non-surgical care delivery patterns and three surgical care delivery patterns based on engaged team members. 16% of patients are managed solely by advanced practice providers, 35% additionally involve a physical therapist, and 10% involve a physical therapist and social worker and/or a nutritionist. 37% of patients receive care without treatment by a surgeon. 17% of patients receive care from the integrated practice unit alongside surgical intervention, with around two-thirds receiving support from a physical therapist, social worker, or nutritionist. Average (mean) personnel costs for non-operative care range from $44.94 (SD $64.88) to $286.98 (SD $141.91), while operative care costs range from $280.36 (SD $134.83) to $475.95 (SD $253.69).

CONCLUSIONS: RTLS tracking technology provides a granular view of care delivery patterns within musculoskeletal care models, a data type otherwise challenging to obtain. Accurate cost estimates organized by distinct patterns helps inform next-generation payment models and value-based pricing.