Dowley, Kieran S

Background: Amid mounting pressure to reduce health care spending, strategies for identifying and eliminating unwarranted variation in costs have garnered significant attention. Previous studies have characterized intersurgeon variation in costs for common orthopaedic procedures, but such variation remains unexplored in the context of hip arthroscopic surgery. Purpose: To (1) characterize variation in the cost of hip arthroscopic surgery between surgeons using time-driven activity-based costing (TDABC) and (2) identify patient characteristics, intraoperative findings, and operative procedures underlying such intersurgeon variation in costs. Study Design: Cohort study; Level of evidence, 3. Methods: Employing TDABC, the authors determined the intraoperative cost of 890 outpatient hip arthroscopic surgery cases performed by 5 surgeons at 4 surgery centers from 2015 to 2022. All costs were calculated in United States dollars. Costs were normalized to protect the confidentiality of internal hospital cost data. Surgeon-specific mean costs were calculated with and without adjustment for patient characteristics, surgical personnel, operative factors, and surgery center. Finally, to elucidate the sources of surgeon-driven cost variation, the authors estimated the proportion of variation attributable to different cost subcategories, including labor, implant/allograft, and other supply costs. Results: The intraoperative cost per patient ranged from 38.2 to 212.8 normalized cost units (mean, 100.0 ± 26.5), with a 1.6-fold variation in the mean cost between the highest and lowest cost surgeons. Operating surgeon alone explained 53.4% of the observed variation in costs. Controlling for case-specific features significantly improved the explanatory power to 91.8% ( P < .001), but the adjusted variation in costs between surgeons remained essentially unchanged (decreased by <3%). Each of the 5 surgeons generated costs that deviated significantly from those predicted based on case-specific factors, with mean surgeon deviations ranging from −5.0% to 21.8% ( P < .001 for all). Drivers of cost variation differed substantially between surgeons but generally stemmed from labor or other supply costs rather than implant/allograft costs. Conclusion: The cost of outpatient hip arthroscopic surgery varied widely between surgeons; the cause of this deviation was multifactorial and surgeon specific. While within-surgeon cost variation was effectively explained by patient and operative characteristics, most between-surgeon variability remained unexplained by observable factors. These insights may support individual surgeons in cost reduction efforts and, more importantly, may enable the alignment of reimbursement rates with costs.

Background: Despite growing interest in delivering high-value orthopaedic care, the costs associated with hip arthroscopy remain poorly understood. By employing time-driven activity-based costing (TDABC), we aimed to characterize the cost composition of hip arthroscopy for labral pathological conditions and to identify factors that drive variation in cost. Methods: Using TDABC, we measured the costs of 890 outpatient hip arthroscopy procedures for labral pathological conditions across 5 surgeons at 4 surgery centers from 2015 to 2022. All patients were ≥18 years old and were treated by surgeons who each performed ≥20 surgeries during the study period. Costs were normalized to protect the confidentiality of internal hospital cost data. Descriptive analyses and multivariable linear regression were performed to identify factors underlying cost variation. Results: The study sample consisted of 515 women (57.9%) and 375 men (42.1%), with a mean age (and standard deviation) of 37.1 ± 12.7 years. Most of the procedures were performed in patients who were White (90.6%) or not Hispanic (93.4%). The normalized total cost of hip arthroscopy per procedure ranged from 43.4 to 203.7 (mean, 100 ± 24.2). Of the 3 phases of the care cycle, the intraoperative phase was identified as the largest generator of cost (>90%). On average, supply costs accounted for 48.8% of total costs, whereas labor costs accounted for 51.2%. A 2.5-fold variation between the 10th and 90th percentiles for total cost was attributed to supplies, which was greater than the 1.8-fold variation attributed to labor. Variation in total costs was most effectively explained by the labral management method (partial R 2 = 0.332), operating surgeon (partial R 2 = 0.326), osteoplasty type (partial R 2 = 0.087), and surgery center (partial R 2 = 0.086). Male gender (p < 0.001) and younger age (p = 0.032) were also associated with significantly increased costs. Finally, data trends revealed a shift toward labral preservation techniques over debridement during the study period (with the rate of such techniques increasing from 77.8% to 93.2%; P trend = 0.0039) and a strong correlation between later operative year and increased supply costs, labor costs, and operative time (p < 0.001 for each). Conclusions: By applying TDABC to outpatient hip arthroscopy, we identified wide patient-to-patient cost variation that was most effectively explained by the method of labral management, the operating surgeon, the osteoplasty type, and the surgery center. Given current procedural coding trends, declining reimbursements, and rising health-care costs, these insights may enable stakeholders to design bundled payment structures that better align reimbursements with costs. Level of Evidence: Economic and Decision Analysis Level IV . See Instructions for Authors for a complete description of levels of evidence.