March 28 th, 2014 Total Joint Replacements Community Dialogue

Minnesota Health Action Group; confidential - do not copy or distribute without permission 2

33 International Landscape  26 countries, European countries plus Australia, New Zealand and Canada, collect joint replacement data in national registries; some since 1975 to support quality improvement, track devices  Transparency - web based information in some countries for consumer decision support  NHS includes –Hospital reviews (similar to Yelp) –Hospital quality by type of surgery –Physician quality Mortality Volume by type of surgery; hip, knee, primary, revisions Reasons physicians don’t report –Patient education – materials and videos on surgical procedure, patient experience, recovery Minnesota Health Action Group; confidential - do not copy or distribute without permission 3

44 4 Knee replacements Hip replacements Frequency Per 100,000 U.S. International Landscape – U.S. Compared to OECD

55 Trend in Selected OECD Countries Minnesota Health Action Group; confidential - do not copy or distribute without permission 5 Total Knee ReplacementsTotal Hip Replacements

66 US Landscape  Quality measures and registries evolving  Provider initiatives –Research on improvement Function and Outcomes Research for Comparative Effectiveness in TJR (FORCE TJR) High Value Healthcare Collaborative  Employer initiatives besides MN Health Action Group –CalPERS reference pricing –PBGH/ECEN – Walmart & Lowes COEs –BridgeHealth surgery networks –Alliance, Madison – QualityPath  Payer initiatives –Numerous CMS bundled payment initiatives –Numerous private payer bundled payment initiatives  Consumer Reports Safe Patient Project calling for device warranties Minnesota Health Action Group; confidential - do not copy or distribute without permission 6

77 Minnesota Landscape  High relative cost  High relative volume – both hips & knees  Little transparency in cost – CMS website shows MN hospital allowed amounts range ~$23k to ~$55k (2.5 fold)  Little information about quality –CMS website for DRG 470 MN complications mirrors US Better than average patient experience but high variation - 69% to 88% –MNCM pilot for TKR delayed  No local CMS bundled payment initiatives  Private payer bundled payment emerging recently Minnesota Health Action Group; confidential - do not copy or distribute without permission 7

88 Why Do Employers Care about TJRs?  High and variable cost; primarily in hospitals and devices  High and increasing frequency  Complications - resulting in recalls –Highlight device failures and uncertain longevity –Much more expensive than original surgery –Impact on productivity, functionality, increased costs  Baby boomer generation + obesity = even higher use  TJR volume has doubled since 2003, TKR tripled for <65  Obesity a bigger driver for younger patients; 65% <65  Known effectiveness in short term; longer term outcomes unknown Minnesota Health Action Group; confidential - do not copy or distribute without permission 8

99 AHIP (American Health Insurance Plans) Data Minnesota Health Action Group; confidential - do not copy or distribute without permission 9 Total Joint Replacements DRG 470