Health service costs in Europe: cost and ... - Wiley Online Library

HEALTH ECONOMICS Health Econ. 17: S9–S20 (2008) Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/hec.1328

HEALTH SERVICE COSTS IN EUROPE: COST AND REIMBURSEMENT OF PRIMARY HIP REPLACEMENT IN NINE COUNTRIES TOM STARGARDT* Department of Health Care Management, Faculty of Economics and Management, Berlin University of Technology, Berlin, Germany

SUMMARY This paper assesses variations in the cost of primary hip replacement between and within nine member states of the European Union (EU). It also compares the cost of service with public-payer reimbursements. To do so, data on cost and reimbursement were surveyed at the micro-level in 42 hospitals in Denmark, England, France, Germany, Hungary, Italy, The Netherlands, Poland, and Spain. The total cost of treatment ranged from h1290 (Hungary) to h8739 (The Netherlands), with a mean cost of h5043 ðSTD h2071Þ: The main cost drivers were found to be implants (34% of total cost on average) and ward costs (20.9% of total cost on average). A one-way random effects analysis of variance model indicated that 74.0% of variation was between and only 26% of variation was within countries. In a two-level random-intercept regression model, purchasing-power parities explained 79.4% of the explainable between-country variation, while the percentage of uncemented implants used and the number of beds explained 12.1 and 1.6% of explainable withincountry variation, respectively. The large differences in cost and reimbursement between Poland, Hungary, and the other EU member states shows that primary total hip replacement is a highly relevant case for cross-border care. Copyright # 2008 John Wiley & Sons, Ltd. KEY WORDS:

hospital costs; total hip replacement; diagnosis-related groups; regression analysis; European Union

INTRODUCTION When other treatment options such as pharmacological therapy, weight loss, muscle-strengthening exercises, and assistive devices have been exhausted, hip replacement surgery is considered to be the best approach to managing severe hip osteoarthritis and restoring mobility, provided that the patient is otherwise in good health (Nilsdotter and Lohmander, 2002). The procedure entails replacing the diseased hip joint with an artificial one. As part of the hip prosthesis, an artificial socket is implanted in the pelvis. The neck and head of the femur are replaced by a prosthesis that enables motion within the socket. The different components of the new joint can be attached to the femur and acetabulum with or without bone cement. The surgery is performed in a hospital setting. The majority of patients are older than 60 years (Faulkner et al., 1998). Hip replacement is elective surgery and part of the benefit basket in many European countries. As such, it is predestined to become a service eligible for cross-border care. The surgery is performed with great frequency (e.g. 170 000/year in Germany and 65 000/year in England and Wales) and thus has a significant budget impact (Dreinho¨fer et al., 2006). The demand for hip replacement has increased over the past 10 years and is likely to continue to do so as a result of ageing populations and because of the extension of the age range for this treatment (Faulkner et al., 1998; Sochart and Porter, 1997; Upshur *Correspondence to: Department of Health Care Management, Faculty of Economics and Management, Berlin University of Technology, Secr. EB2, Strasse des 17. Juni 145, 10623 Berlin, Germany. E-mail: [email protected]

Copyright # 2008 John Wiley & Sons, Ltd.

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et al., 2006). According to Organisation for Economic Co-operation and Development data, the procedure is subject to waiting times in some European countries such as Denmark, Finland, Norway, The Netherlands, and the United Kingdom (Siciliani and Hurst, 2003). Differences in the cost of treatment, public reimbursement, and treatment patterns among the European Union (EU) countries are thus of great interest to healthcare decision makers and public payers. The objective of this article is to assess variations in the cost of a specific type of primary hip replacement between and within nine member states of the European Union. The main goals are (a) to clarify whether differences in hospital costs are due to differences in the actual services provided, variations in the use of resources, or differences in unit cost and (b) to compare cost and reimbursement.

MEDICAL BACKGROUND AND SHORT LITERATURE REVIEW Hip replacement is indicated in the management of arthritis, fracture of the femur or femoral neck, rheumatic joint inflammation, or mechanical problems arising from hip joint dysplasia (Ju¨ni et al., 2006). Initially, the patient’s symptoms are generally characterised by stiffness in the affected joint. Pain is felt when putting weight on the joint. In later stages, the joint hurts even at rest and throughout the night. The pain is felt in the groin, trochanter region, and buttocks, and may spread to the upper thigh and knee; mobility is restricted. Because the patient reacts to the flexion contracture of the hip with hyperlordosis of the lumbar region of the spine, pains in the lower back are not infrequent. Diagnoses are based primarily on physical examination, X-rays, or magnetic resonance imaging (Peat et al., 2001). Generally, the affected joint is treated conservatively for as long as possible, e.g. by improving patient self-management of the condition or reducing the load on the joint through weight loss in overweight patients or with the use of orthopaedic aids. Physical therapy, including cryoapplications, massage, and gymnastics, are also common treatment strategies. Therapy can be supported by administering nonsteroidal anti-inflammatory drugs and/or steroids (Ju¨ni et al., 2006). In the event that a conservative approach does not lead to sufficient clinical improvement, however, an endoprosthetic replacement joint can improve quality of life (Ju¨ni et al., 2006; Nilsdotter and Lohmander, 2002). Hip replacement surgery typically lasts between 45 min and 2 h under full or partial anaesthesia and involves a hospital stay of 5–10 days. This is followed by rehabilitation measures, which take place in hospital or in the outpatient setting and vary widely according to individual needs (Munin et al., 1998). Estimates made using Medicare data from 1999 to 2003 show that the complication rates for primary hip replacement are 2.5% for 90 days mortality, 0.5% for pulmonary embolus, and 1.2% for postoperative wound infection (Cram et al., 2007). The technology for hip replacement has improved considerably since the development of the first generation of cemented prostheses in the 1960s. The longevity of implants is increasing, and many designs and attachment methods are now available. In general, it is possible to distinguish between three groups of hip prosthesis, all of which differ in the way the artificial joint is attached to the patients’ bones: cemented, uncemented, and partially cemented implants. The three groups can be divided into subgroups based on the type of cement, the cement-free methods of attachment, and the material used to produce the implant itself and the use of hip resurfacing methods (Faulkner et al., 1998).

METHODS Data collection and case definition As part of the HealthBASKET project, researchers from nine EU countries (i.e. Denmark, England, France, Germany, Hungary, Italy, The Netherlands, Poland, and Spain) collected data on the inhospital cost and reimbursement for a specific case of primary total hip replacement in 2005, as well as Copyright # 2008 John Wiley & Sons, Ltd.

Health Econ. 17: S9–S20 (2008) DOI: 10.1002/hec

COST AND REIMBURSEMENT OF PRIMARY HIP REPLACEMENT

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data on the type of implant provided. The case can be described as follows: a woman between 65 and 75 years of age with hip osteoarthritis, who requires hip replacement due to considerable impairment of function, is admitted for her first hip replacement (unilateral). The patient has no co-morbidities that require expensive drugs or other treatment. The surgeon uses the most common implant for female patients, and surgery is completed without severe complications. The case ends with the patient being discharged from hospital either to home or to a separate rehabilitation facility. To allow for standardised data collection, methodological guidelines were developed and agreed upon among all researchers. The guidelines specified which cost components would be surveyed, defined which cost categories should be included in overhead costs, and set general standards for the results. The hospital sample in each country was based on the availability of costing information, willingness to participate in the study, and ability to fulfil the requirements set forth in the methodological guidelines. It was decided that medium-sized hospitals representative of each country should be included in the hospital sample, whereas very small and very large hospitals, as well as teaching hospitals, should not. As the average size of hospitals varied considerably across countries, hospital sizes in the different samples range from 200 to 1200 beds. Data on resource use were collected by all countries through face-to-face interviews using questionnaires with physicians and financial controllers at the respective hospitals. In addition, patient-level data were acquired by analysing medical records (e.g. Poland) or through hospital information systems (e.g. France, Germany). Cost data were obtained from national or regional databases (e.g. England and The Netherlands), from hospitals participating in the national sample for diagnosis-related group (DRG) cost-weight calculations (e.g. France, Germany), or by interviews with financial controllers (all countries). In rare cases, unit cost had to be calculated based on expert estimates (e.g. Poland), as some hospitals experienced difficulties calculating unit cost for specific items or medical services described by medical specialists during the interviews. Because of differences in the types of data available in each country (e.g. patient level vs hospital level), data for all countries were aggregated at the hospital level. Average exchange rates from 2005 were used to convert national currencies into euros. Data analysis In order to explain whether differences in the cost of treatment within countries were larger than those between countries, a one-way random effect analysis of variance (ANOVA) was estimated. In addition, regression analysis was conducted, including factors that might influence the total cost of treatment at the hospital level. Because hospital-level and country-level variables were included as independent variables, a two-level random-intercept model was used to account for country-specific effects (Grieve et al., 2005; Singer, 1998). The hypothesis of the regression residuals following normal distribution when using cost of treatment as a dependent variable could not be rejected (Shapiro–Wilk, P ¼ 0:8005). Data analyses were performed using SAS version 9.1. Based on the literature dealing with the estimation of hospital cost functions and in accordance with economic theory, the number of hospital beds was included in the regression analysis to test whether economies of scope and scale influenced total cost (Adam and Evans, 2006; Breyer, 1987; Vitaliano, 1987). In addition, the number of physicians per bed and a dummy variable for urban location (i.e. if the population in the city where the hospital was located/provided care was above 200 000) were included to account for structural differences within the hospital sample. To adjust for differences in countries’ price levels, purchasing-power parities in euros was included in the model as a proxy. The average length of stay was also included in the regression analysis, because cost differences between countries may have been partly due to differences in the point of time at which hospital treatment ended and treatment in an inpatient rehabilitation facility began. In addition, capacity use was surveyed for each hospital and included in the regression, as it may have influenced the amount of overhead costs allocated to each Copyright # 2008 John Wiley & Sons, Ltd.


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case. Because of lack of data on capacity use in Polish hospitals, averages from the entire sample were employed to correct for missing values. To account for differences in the prosthesis cost and the use of technology, the percentage of uncemented prosthetics used in each hospital was added to the regression analysis. An interaction variable of length of stay and percentage of uncemented prosthetics was added to analyse whether higher costs for uncemented prosthetics are made up for by reduced length of stay. The regression model was specified by first including all variables described in the Methods section. Subsequently, a backward stepwise selection procedure was applied until only significant variables remained at the 5% level (Twisk, 2006).

RESULTS Descriptive statistics In total, data were collected from 42 hospitals. The number of providers contributing data differed from country to country, ranging from two providers (Denmark and England) to eight providers (Germany). The average length of stay ranged from 5.9 days (Denmark and The Netherlands) to 16.2 days (Germany) (see Table I). In terms of average length of stay, the rank order of countries in our sample was generally comparable to the rank order of countries in the WHO HFA database (World Health Organization, 2007). The total cost of treatment ranged from h1290 (Hungary) to h8739 (The Netherlands), with a mean cost of h5043 ðSTD h2071Þ (see Figure 1). Evidence from previous studies suggests that these results are within a plausible range (Briggs et al., 1998; Iorio et al., 2001; Johansson et al., 2006; Laupacis et al., 1994). Comparing the total cost of treatment between countries, there was a large gap between the former EU-15 member states and the new EU member states, Hungary and Poland. The average cost of treatment in Poland and Hungary was less than half of that observed in any other member state, except for Spain. Excluding Poland and Hungary, the average cost per case in our sample increased to h5778 ðh1523Þ: For most countries, within-country cost variations seemed to be greater than betweencountry cost variations. Before interpreting individual cost components, differences in the amount of costs partly or totally subsumed under overhead costs in each country must be explained. These differences are partly due to differences in the availability of data, in the extent to which hospital information systems supported cost-unit accounting, and in the methodology applied for cost accounting in the respective hospitals. For example, whereas Danish researchers experienced difficulties determining normal ward costs and the cost of surgery, they collected detailed cost information on medication use at their hospitals. German researchers, on the other hand, had access to patient-level data, but were unable to provide detailed information on medication costs because the cost of pharmaceutical care is only rarely linked to the patient level in German hospitals. Thus, variables such as bed days were used as an allocation base to relate pharmaceutical costs incurred in a hospital department in Germany to all patients treated in that department, whereas pharmaceutical costs in Danish hospitals were allocated based on individual patients’ drug use. Therefore, the costs presented for each cost component in Table II can only provide rough estimates for each country and have to be compared carefully by looking at the percentage of ‘unexplained’ costs subsumed under overhead. Excluding Denmark from the analysis because of a high percentage of ‘unexplained’ overhead costs (77.5%), the main cost drivers were found to be implants (34% of total cost on average), followed by ward costs (20.9% of total cost on average), and the cost of surgery (12.9% of total cost on average and excluding the cost of the implant). Drug costs (4.0% of total cost on average) and diagnostics (2.6% of total cost on average) were of only minor importance, except in England, which reported the use of very expensive drugs for anaesthesia. On average, 25.6% of total cost remained unexplained and was allocated to each case as overhead. The cost of the implant ranged from 11.6% of total cost (England) Copyright # 2008 John Wiley & Sons, Ltd.


Copyright # 2008 John Wiley & Sons, Ltd. 1.0791

1.3479 888 280 0:53 0:04 1:67 0:08 42:0 45:3 0:86 0:49 0:63 0:21 0:20 0:28 0:17 0:23 5:9 3:0

Hospital characteristics Beds per hospital (no.) Physicians per hospital bed (no.) Nurses per hospital bed (no.) Beds per department (no.) Physicians per department bed (no.)

Treatment characteristics Non-cemented implant (%) Partially cemented implant (%) Cemented implant (%) Length of stay (days) 0:34 0:21 0:00 0:00 0:66 0:21 7:1 1:1

630 204 0:34 0:03 1:92 0:35 } }

2

2

England

Hospitals included (no.) Purchasing Power Parities in Euro adjusted to EU-25 average

Denmark

0:41 0:44 0:00 0:00 0:59 0:44 5:9 3:0

305 253 0:27 0:06 1:03 0:41 31:6 10:9 0:86 0:49

1.0742

5

France

0:23 0:25 0:20 0:20 0:57 0:41 16:2 2:3

461 229 0:22 0:07 0:58 0:13 79:5 28:4 0:17 0:04

1.0526

8

Germany

0:00 0:00 0:00 0:00 1:00 0:00 12:9 0:3

885 209 0:19 0:01 0:71 0:02 34:0 19:8 0:20 0:01

0.6026

2

Hungary

Table I. Sample characteristics ðþ= Std:Þ

0:90 0:17 0:00 0:00 0:10 0:17 8:2 1:1

795 313 0:59 0:03 1:26 0:14 33:2 7:79 0:29 0:10

1.0275

5

Italy

0:25 0:35 0:14 0:38 0:71 0:49 5:9 1:2

586 227 0:22 0:08 1:91 0:75 25:2 11:8 0:27 0:27

1.0519

7

The Netherlands

0:62 0:37 0:00 0:00 0:38 0:37 11:8 1:8

415 234 0:27 0:04 0:73 0:21 35:5 15:5 0:26 0:04

0.5504

6

Poland

0:11 0:09 0:00 0:00 0:89 0:09 5:9 1:2

402 276 0:67 0:09 1:10 0:04 } }

0.9077

5

Spain


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Sweden 2000: 9,740

10,000

US 1993-1996: 8,646 8,332

8,739

8,482 8,000

7,853

7,622 6,982

Canada 1988: 6,927 6,754

6,925 6,782

in

6,364 6,101

6,000 5,466

5,932

5,683

5,691

5,605

4,457

4,070

UK 1996/1997: 5,380

4,524 4,011

4,000

4,126 3,599 3,190 2,431 2,125

2,000

1,298 1,509

1,294 1,290

0 Italy (N=5)

Germany (N=8)

France (N=5)

Denmark (N=2)

England (N=2)

Netherlands (N=7)

Spain (N=5)

Poland (N=6)

Hungary (N=2)

Results from other studies

Figure 1. Mean cost, minimum and maximum cost of primary total hip replacement, evidence from previous studies

to 50.4% of total cost (Spain); in terms of absolute value, from h483 (Hungary) to h3416 (Italy). Differences in the cost of the implant are related, in part, to differences in the use of expensive uncemented implants, e.g. 90% (Italy) vs 0% (Hungary), and to the underlying definitions on the allocation of costs to the cost components ‘implants’ and ‘material’. In Italy, for example, costaccounting systems allocated the cost of material used in connection with the implant itself (e.g. screws) to the cost component ‘implant’ (material cost h22); however, accounting systems in Germany allocated this cost to the cost component ‘material’ (material costs h249). Ward costs, which accounted between 5.2% (Italy) and 36.9% of total cost (Hungary), ranged from h360 (Italy) to h1963 (England) and depended primarily on the cost of nursing staff. The extremely low ward costs reported for Italy are partly due to these having been included in overhead costs. Average provider reimbursement from the National Health Service or public health insurers ranged from h1771 to h9975; with a sample average of h6067 ðSTD 2404Þ: Provider reimbursement for Spain was not available, as hospitals in most Spanish regions receive retrospective budget payments that depend only partly on the number of cases treated (Sańchez-Martı´ nez et al., 2006). Compared with the average cost of treatment, average reimbursement per country was greater than total costs for all countries except Poland. The profit margin ranged from 10.5% (Poland) to +32.5% (Denmark). Data analysis The results of the one-way random effects ANOVA model indicated that 74% of variation ðh1909Þ was between countries, whereas only 26% of variation ðh1132Þ was within countries. Excluding Hungary and Poland from the analysis (i.e. because they had less than half of the costs of any other member state except for Spain) resulted in a smaller amount of between-country variation (38.4% of total variation) compared with within-country variation (61.6% of total variation). The final regression model contained the following variables: number of hospital beds, percentage of uncemented implants used, and purchasing-power parity in euros. While the use of uncemented implants and purchasing-power parity were positively correlated with total cost per case, the number of Copyright # 2008 John Wiley & Sons, Ltd.



b

a

h7840.00

Reimbursement h6622.14

h36.2% h6101.09 h5679.66

h728.15 h171.78 h44.75 h1852.24 h154.54 h60.99 h2211.60

h88.80 h428.14 h193.11 h6.40

h60.01 h100.58 h0.00

France

h6767.36

h26.3% h6365.20 h6047.12

h596.34 h283.77 h133.18 h963.46 h249.13 h178.85 h1675.59

h414.40 h1167.56 h249.24 h129.46

h79.83 h137.00 h107.39

Germany

h1794.93

h10.0% h1293.81 h2147.05

h72.50 h129.92

a

h481.75

a

h93.25 h18.53

a

h135.49 h341.15 h0.51

h7.82 h10.02 h2.87

Hungary

Subsumed in overhead costs. Hospitals receive retrospective budget payments that depend only partly on the number of cases treated.

h6905.45

h28.7% h5690.94 h5273.78

h77.5% h5932.24 h4401.10

% Overhead of total Total cost Total cost (adjusted by PPP)

a

h450.88 h1237.22 h274.78

h87.95 h5.74 h6.22

h534.55 h123.47 h0.00 h657.50 h106.63 h571.28 h1634.72

a

h18.04 h470.98 h111.37

a

h141.00 h35.01

England

Operation (including wake-up room) Anaesthetist/surgeon h202.04 Nursing h136.90 Other staff h42.52 a Implant Material h115.61 Drugs h59.63 Overhead h4599.14

Normal/intensive ward Physician Nursing Other staff Material

Diagnostic procedures Imaging Laboratory Other

Denmark

h8963.60

h37.7% h6981.90 h6795.04

h228.51 h99.57 h11.42 h3416.05 h22.31 h74.30 h2629.63

h171.90 h104.58 h78.00 h5.78

h63.37 h58.42 h18.06

Italy

h6842.00

h32.2% h5604.92 h5328.38

h104.12 h1803.01

a

h669.47 h200.50 h177.69 h1825.00

a

h538.40 h189.64

a

h32.90 h45.12 h19.07

The Netherlands

Table II. Total cost, cost components, and reimbursement of total hip replacement

h1903.17

h15.1% h2125.36 h3861.48

h52.08 h9.64 h0.00 h978.38 h35.00 h175.13 h320.27

h236.62 h192.42 h45.97 h16.75

h33.80 h14.00 h15.30

Poland

b

h18.9% h3599.02 h3964.99

h400.16 h108.69 h0.00 h1780.00 h0.18 h46.20 h680.99

h203.67 h278.19 h0.00 h1.27

h42.53 h54.62 h2.52

Spain


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Table III. Results from two-level random-intercept model Independent variable

Coefficient

S.E.

t-Value

p-Value

Fixed effects Intercept Number of beds per hospital PPP % Non-cemented implants

1769.03 1.4131 7077.66 1760.71

1330.26 0.6563 11324.62 542.35

1.33 2.15 5.34 3.25

0.2253 0.0392n 50.0001n 0.0028n

Random effects Intercept Residual

519 681 1 034 955

433 679 261 157

n

1.20 3.96

0.1153 50.0001

Significant 50:05:

hospital beds was negatively correlated with the total cost of treatment, suggesting economies of scope and scale (see Table III). Accounting for price differences between countries by using purchasing-power parities in euros explained 79.4% of the explainable between-country variation, whereas the percentage of uncemented implants and the number of beds explained 12.1 and 1.6% of explainable within-country variation. However, the results of this pseudo R2 -approach must be treated with caution and can only serve as a rough indicator (Singer, 1998). Multicollinearity diagnostics were conducted and confirmed that multicollinearity was not relevant to the model.

DISCUSSION Discussion Results from the regression analysis show that the total cost of primary hip replacement depended primarily on the purchasing-power parity in euros, which was used as a proxy for price and wage level. Total cost also depended on the type of implant, which was used as a proxy for level of technology, and the size of the hospital, which indicated the existence of economies of scale and scope. Economies of scale and scope will, among other things, relate to individual and hospital experience. There was a clear difference in cost between Poland and Hungary, on the one hand, and Denmark, England, France, Germany, Italy, and The Netherlands, on the other, while Spain was between the two groups of countries. Besides depending on price/wage level, the remaining cost variation between countries may have been due to organisational aspects of the healthcare systems themselves (e.g. the incentive set by provider reimbursement for early discharge) or the organisation of care (e.g. the transfer between providers that are involved in treatment before and after the hospital episode). Whereas, in some countries, diagnostic procedures are conducted on an outpatient basis and subsequently made available to hospital physicians (e.g. Denmark), in other countries all diagnostic procedures are performed on an in-hospital basis (e.g. Germany). The latter system leads to greater costs for diagnosis in some countries. The same is true for expenditures on physiotherapy (included in the cost component ‘other staff’ in the normal/ intensive ward section in Table II). Whereas some hospitals start rehabilitation measures while the patient is still in hospital, others leave this activity mainly to a rehabilitation provider. However, it has to be noted that the amount spent on physiotherapy also varies greatly within countries. Other unexplained cost differences between hospitals may have been due to differences in treatment patterns, e.g. the surgical technique used, surgeons’ experience, the operating theatre environment, the intensity of nursing care, the number of beds in a hospital room (Faulkner et al., 1998), or differences in quality, the last of which goes beyond the scope of this study. In addition, country-specific factors (e.g. the existence of waiting lists) may have also influenced total cost per case. Although one study Copyright # 2008 John Wiley & Sons, Ltd.



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demonstrated that waiting lists do not have an impact on the outcome of hip replacement (Nilsdotter and Lohmander, 2002), waiting lists might have influenced capacity utilisation for total hip replacement and, thus, the amount of overhead allocated per case. The results of our study also indicate that the cost of primary hip replacement using uncemented prosthetics is greater than the cost of primary hip replacement using cemented prosthetics and that these cost differences are not made up for by reduced length of stay. However, no statement on the most costeffective type of prosthesis can be made, as the case ends at the hospital door and does not measure outcomes such as the durability of the prosthesis, the complication rate after surgery, or the cost of revision surgery, which is usually much more expensive than the cost of primary hip replacement (Briggs et al., 1998; Engesaeter et al., 2006; Gillespie et al., 1995). Guidelines published by NICE in the year 2000 argue that there is ‘currently more evidence of the long term viability of cemented prostheses, which, in many cases, occupy the lower end of the range of prostheses cost, than there is for uncemented and hybrid prosthesis’ (National Institute for Health and Clinical Excellence, 2000). However, other studies claim that cemented hips have proved to be superior only in short-term medical outcomes and that evidence is lacking for their superiority over the long term (Ni et al., 2005). The mainly positive difference between reimbursement and costs can be explained by the use of DRG or DRG-like systems (HRGs, DBCs) for reimbursement in combination with the case definition. DRG systems attempt to classify cases according to medical criteria (main diagnosis) and economic severity (costs), allowing for a certain amount of cost variation within a DRG (Schreyo¨gg et al., 2006). As the definition for this case of total hip replacement excludes any comorbidity, it can be assumed that the selected cases are less severe and therefore less costly than the average case within the respective DRG. Thus, a reimbursement system that is based on setting reimbursement for the average severe case within a DRG will lead to a reimbursement above total cost for uncomplicated cases. Poland, the only country whose average cost exceeded reimbursement in this study, does not use DRGs for reimbursement. The deficit incurred for total hip replacement can be explained by the fact that deficits of public hospitals are usually made up for by subsidies provided by the region in which the hospital operates (Kozierkiewicz et al., 2006). In addition, the sample size and composition of hospital samples in our study may not have led to a representative cost estimate. Although it was the aim of all participating researchers to provide data based on a hospital sample that was representative of their respective country, the low number of providers that participated in each country limits the generalisability of our results. This is also true of the treatment patterns observed, as these may have differed from hospital to hospital within countries. In addition, differences in the use of cost-accounting systems between countries and hospitals, especially in the way that overhead costs were calculated and allocated to cases, may have contributed to some of the cost differences, as well. Allocation bases used to allocate costs to cases, the level of detail available from hospital information systems, and the accounting methods used to determine unit costs could not always be influenced by researchers. On the one hand, using national cost databases (e.g. England and The Netherlands) or working with data calculated according to standards set by the national DRG institute (e.g. France and Germany) reduced variations in accounting practices within countries, but at the same time increased differences between countries because of the use of slightly different costing methodology. Harmonising cost accounting and setting disclosing standards for hospitals would therefore greatly improve the database for future research in this area. Evidence from other studies Although some of these studies were conducted more than 5 years before our study and they do not present a systematic review, evidence suggests that our results are plausible. In a randomised controlled trial on cemented prosthetics vs internal fixation in 2000, the cost of primary hip replacement including an initial outpatient visit in Sweden was estimated to be h9740: The severity of disease in this population Copyright # 2008 John Wiley & Sons, Ltd.


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sample was, however, greater than ours in this study, because the mean age of the study population was 84 years. In addition, 38.4% of the patients participating in the study had a mental illness, which considerably increased treatment cost compared with patients without mental illness (Johansson et al., 2006). A study conducted in the UK in 1996–1997 using cost data from the Nuffield Orthopaedic Centre in Oxford and data on resource use based on clinical estimates of an average case calculated the cost of primary hip replacement with a cemented prosthesis to be h5375 ð£4052Þ: The cost of prosthesis including the cost of cement was h487 ð£367Þ (9.1% of total cost), which is comparable to the cost of cemented prosthesis for UK ðh658Þ in our study. The main cost driver was found to be ward costs, which accounted for 59.5% of the total cost (Briggs et al., 1998). In the US, a study on the optimal treatment for displaced femoral neck fractures in elderly patients conducted between 1993 and 1996 estimated the hospital cost of cemented total hip replacement at h8332 (US$10 490). The hospital cost of uncemented total hip replacement was calculated to be h8646 (US$10 886). The cost of implant was 17 and 20% of total cost. After hospital treatment (average length of stay was 5.5 days), patients were sent to another inpatient rehabilitation facility (average length of stay was 19 days), which led to an additional cost of h7511 (US$9457) for both types of implants. The study also indicated that the cost of hospital stay depends to a large extent on the point in time at which the patient is transferred from the hospital to the rehabilitation facility (Iorio et al., 2001). Another US study calculated the cost of primary hip replacement in 2003 to be h21 873 (US$24 170). Results from multivariable regression analysis indicated that higher severity of disease was associated with cost increases (Boznic et al., 2005). A randomised controlled trial conducted in Canada in 1988 compared the cost of cemented prostheses with the cost of uncemented prostheses and found virtually no difference in costs between the two types of implants. The cost of primary hip replacement with a cemented prosthesis was h6754 (Can$9233) and h6927 (Can$9470) for an uncemented prosthesis. Similar to our study, the main cost drivers were found to be ward costs and the cost of implant (Laupacis et al., 1994). CONCLUSION The large difference in costs and reimbursement between Poland, Hungary, and other countries shows that primary total hip replacement is a highly relevant case for cross-border care. However, in the very long run, as these differences are mainly driven by differences in unit costs, it can be expected that moving towards cross-border care and competing among the scarce resource of physicians within Europe will lead to a convergence of costs and prices. Even though the comparability of cost per case in our study is limited due to the small hospital sample and variations in study conditions (e.g. cost-accounting standards) between countries, our results provide a good estimate for policy makers and can serve as a starting point for future research in this area. Our results show that comparing costs at the micro-level is feasible and can serve as an instrument of healthcare systems analysis. The study design is expandable to other interventions and might be conducted for benchmarking reasons on a regular basis. However, the methodology can still be improved by enhancing the scope beyond hospital doors or by including measures for the quality of care provided. Future studies in this area would also greatly benefit from a standardisation of costaccounting systems in European hospitals.

ACKNOWLEDGEMENTS

The results presented in this article are based on the project ‘Health Benefits and Service Costs in Europe – HealthBASKET’, which was funded by the European Commission within the Sixth Framework Research Programme (grant no. SP21-CT-2004-501588). Copyright # 2008 John Wiley & Sons, Ltd.



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CONFLICT OF INTEREST

No conflicts of interest declared.

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