Longitudinal analysis of historical payments and utilization in patients with hip and knee osteoarthritis

Background Osteoarthritis (OA) is a highly prevalent condition associated with substantial clinical and economic burden. Value-based payment reform requires detailed understanding of care utilization. However, previous analyses of OA care have limitations, such as constraining analysis to a single year or to surgical patients. We aimed to more comprehensively characterize health services utilization and payment for hip and knee OA through a 3-year longitudinal analysis, including both operative and non-operative services, using Medicare claims data. Methods We utilized Medicare Standard Analytic Files available from PearlDiver, Inc. The target population for analysis was patients with osteoarthritis in the hip, knee, or both, identified by ICD-9 diagnosis codes. Patients were limited to those whose 1) first instance of hip or knee OA diagnosis in the payer dataset occurred between 2008 and 2011 and 2) who were continuously active in the payer dataset for one year prior to and three years following diagnosis. Results Payments for relevant hip and knee OA services were highest during the first year after diagnosis, representing 55.6%, 65.3%, and 51.2% of total payments for patients with knee, hip, or knee and hip OA, respectively. Payments and utilization of services in the second and third treatment years were lower, and similar to the year prior to OA diagnosis. Service-level analysis revealed that total payments were driven by utilization of high-intensity services like surgery, which accounted for 57.7%, 60.6%, and 63.6% of payments in the first year for knee, hip, and knee and hip OA patients, respectively. High utilization of Medical Services like physician-administered medications, arthrocentesis, and physical therapy drove high payments as well, especially later in treatment. Conclusion Hip and knee OA treatment intensity is highest in the year immediately following a new diagnosis and decreases considerably in the second- and third-years following diagnosis across all relevant service categories. This analysis supports the identification of specific, time-sensitive opportunities to transform hip and knee OA care and payment models to optimize patient-centered outcomes while controlling costs across the episode of care.