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This study compared the hospital cost of primary and revision total hip arthroplasty (THA) after the introduction of cost-containment programs (clinical pathway, hip implant standardization, and competitive bid purchasing of hip implants). Hospital financial records for 290 primary and 85 revision THAs performed from October 1993 through September 1995 were analyzed. A cost-accounting system provided actual hospital cost data for each procedure. Accurate calculation of hospital income or loss was determined. Average hospital length of stay was 4.9 days for primary THA and 5.9 days for revision THA. Average hospital cost was $11,104 for primary THA and $14,935 for revision THA. Average net income (hospital revenue - hospital expense) for primary THA was $2486. Average loss from revision THA was $401 . The payer mix included commercial insurance. Blue Cross/Blue Shield, managed care. Medicare, Medicaid, and workmen's compensation. For primary THA, all payers were profitable except Medicaid and selected managed care contracts. For revision THA, profit was achieved with payment from commercial insurance only. Despite the introduction of cost-containment programs, revision THA did not achieve profitability at our institution.

Revision total knee arthroplasty (TKA) consumes more time, more work, and more supplies than primary TKA. This study compared the hospital cost of primary and revision TKA after the introduction of cost-containment programs (implant standardization, clinical pathway, and competitive bid implant purchasing) at our hospital. Hospital financial records of 207 primary unilateral TKA operations and 32 revision TKA operations performed from October 1993 through September 1995 were analyzed. A cost-accounting system provided actual hospital cost data for each procedure. Accurate calculation of hospital income or loss was determined for all 239 procedures. The average hospital length of stay was 4.7 days for primary unilateral TKA and 5.1 days for revision TKA. There were 26 three-component revision operations and 6 one- or two-component revision operations. The average hospital cost was $10,421 for primary TKA and $1 1 ,906 for revision TKA. The average net hospital income (hospital revenue - hospital expense) was $3211 for primary TKA and $1853 for revision TKA. The payer mix included indemnity insurance, Medicare, Medicaid, managed care, and workmen's compensation. All payers were profitable except for Medicaid and selected managed care contracts for both primary and revision TKA. As a result of cost-containment programs, revision TKA can be profitable at our institution.