OBJECTIVES: To estimate threshold prices for improvements in total knee replacement (TKR) and total hip replacement (THR).

METHODS: A Markov model was used as the framework for analysis. Model inputs were based on routinely collected data from England which covered 1997 to 2014. The model was run for representative individuals with average characteristics of the study cohort. It was then re-run for two scenarios: (a) quality of life following surgery if unrevised increased by 5%, and (b) risk of revision reduced by 50%. Threshold prices were estimated, with these giving the maximum price that could be charged for an intervention which achieved the given improvement while remaining cost-effective at a threshold of £20,000 per additional QALY gained.

RESULTS: There were 10,260 and 10,961 individuals who received TKR and THR in the study cohorts used for costs and transition probabilities. Of these, 2,212 and 2,128 also contributed quality of life. Under current practice, TKR and THR resulted in lifetime QALYs of 10.5 (95% CI: 10.3-10.8) and 11.7 (11.5-11.9), and costs of £5918 (£5789-£6062) and £6428 (£6251- £6644), respectively. A 5% improvement in post-operative quality of life increased QALYs to 11.1 (10.8-11.3) for TKR and 12.2 (12.0-12.5) for THR, while costs remained the same. The corresponding threshold prices were £10,079 (£9,796-£10,339) and £11,162 (£10,885-£11,458). A 50% reduction in the risk of revision increased QALYs to 10.6 (10.4-10.8) and 11.8 (11.5- 12.0), with costs falling to £5714 (£5648- £5787) and £6144 (£6054- £6263) for TKR and THR, respectively. The corresponding threshold prices were £1,372 (£971-£1,865) and £1,765 (£1,273- £2,374).

CONCLUSIONS: Although TKR and THR lead to significant gains in health, there are still potential gains from innovation in the procedures. This study has estimated threshold prices of improvements, with gains in quality of life following surgery found to be particularly valuable.