Assessing the Value of Total Knee Arthroplasty: A Comparative Study of Costs and Clinical Outcomes Across Surgical Settings

Introduction Since the 1980s, U.S. healthcare costs have been among the highest in developed nations, prompting efforts focused on improving value. This study compares the value of conventional total knee arthroplasty (TKA) in hospital outpatient departments (HOPD) and ambulatory surgical centers (ASC). Methods Costs were calculated using Time-Driven Activity-Based Costing (TDABC), activity-based supply costing (ABC), and claims-based facility costs. Knee Osteoarthritis Outcome Score (KOOS) values pre- and 6 months post-op were adjusted for life-years to calculate KOOS-adjusted life-years (KALY). Costs were divided by KALYs to determine average cost-effectiveness ratios (ACER). Results Seven patients in the ASC and twenty-three in the HOPD underwent conventional TKA. Average direct variable costs were $1,136.62 in the ASC and $1,180.23 in the HOPD. Total costs were significantly lower in the ASC ($20,956.32) vs. the HOPD ($32,371.50; p<0.001). Outcomes were similar, with slightly higher KOOS-JR scores and KALYs in the HOPD (17.37 vs. 16.89, p=0.94 and 1.82 vs. 1.77, p=0.94). The HOPD's ACER was higher ($17,786.54/KALY vs. $11,839.73/KALY), indicating greater value in the ASC. Significance/Relevance These findings suggest that care models can be optimized by selecting surgical sites based on value. With no significant difference in KOOS scores and KALYs, the cost reduction in the ASC highlights the potential to shift elective procedures to lower-cost settings without sacrificing care.