Did total knee surgery utilization rates rocket six-fold in Kansas for newly insured because of Obamacare or was there another reason—one tied to a viscosupplement policy change from Blue Cross Blue Shield of Kansas (BCBS)?
In April 2015 the Society of Actuaries issued a report which documented a nearly six-fold jump in total knee surgery utilization rates for new insurance enrollees in Kansas in the first quarter of 2014.
Analysis of insurance utilization rates by both the Society of Actuaries and the American Academy of Actuaries are the foundation of the underwriting process for all health insurance providers. It is also the source of information about the effects of Obamacare.
This particular report caught our attention because it focused on new Obamacare enrollees and it showed that total knee surgery utilization rates had increased 500% for new Obamacare enrollees. That’s the largest increase of any procedure.
500% Increase in Total Knee Surgery
Authors Rebecca Owen, FSA, MAAA, health research actuary and Daniel Maeng, Ph.D., research investigator, Geisinger Health System, wrote that after their preliminary examination of the use of healthcare services after the advent of the Patient Protection and Affordable Care Act (ACA) that “new enrollees appeared to have used preference-sensitive treatments at a level that exceeded the expectations of differences due to demographics alone, such as those used in actuarial rate calculations.”
Furthermore, they wrote, “The average cost of care for these treatments incurred by the new enrollees appears to be much higher than the average cost of care incurred by members with continuous coverage, due to a higher proportion of more expensive treatments.”
Like surgery.
Here are the results of the Owen and Maeng Kansas analysis:
By “preference-sensitive” services, Owen and Maeng mean medical procedures that can be delayed by the patient if there is an alternative treatment available or if there aren’t good clinical guidelines or, most important, if there’s no insurance coverage..
Utilization rates for total knee replacement (TKR) rocketed to 6.19x historic rates. The next closest was lower back pain surgery utilization rates which jumped 2.49x.
That is a huge relative increase—almost three times higher than the second most popular procedure.
(It is noteworthy that of the eight procedures analyzed, three were orthopedic.)
In fact, concluded the authors, in the first quarter of 2014, new enrollees were 50% more likely to opt for this market basket of preference-sensitive procedures than new enrollees in 2013.
50% more likely!
No Wonder Health Insurance Premiums Are Rising
Reports like this from either the Society of Actuaries or the American Academy of Actuaries form the basis for insurance company health policy rates. If Obamacare is going to result in a sharp increase in surgery utilization, then premiums will rise to pay for it.
But the data is preliminary. As the authors cautioned readers, a single quarter’s results do not a trend make. “Actuaries who use these results as a reference point for work with their own populations should keep these differences in mind, and should be careful not to stretch the utility of these results too far. It appears that there is pent-up demand for some kinds of services—particularly preference-sensitive services—and it will be interesting to see if this tapers off over the year.”
Health insurance rates are rising. All payers were required to tell regulators if they plan to raise rates by 10% or more before a June 1 deadline, under the ACA. Some of the proposed rate hikes are well in excess of 10%. On average, said Caroline Pearson, vice president for health reform at the consulting firm Avalere Health, on National Public Radio, the insurance hikes for 2016 will likely be around 6%—which are higher than average.
Until this year, health insurers have had to guess at Obamacare enrollment and healthcare service utilization rates. Initially, the rates were low. This was, after all, the Affordable Care Act.
With preliminary 2014 data coming in (e.g., The Society of Actuaries report), insurers are beginning to create expense models and adjust their rates accordingly.
And that report said that utilization rates for total knee replacement jumped by a factor of 6.19x (about 500%).
Kansas Blue Cross Stopped Reimbursing for Viscosupplementation in 2014
Not mentioned and likely not known to the authors of the Society of Actuaries report is that Blue Cross Blue Shield of Kansas City eliminated coverage for viscosupplementation in late 2013 and Blue Cross Blue Shield of Kansas eliminated coverage in May 2014.
What role does viscosupplementation play in determining rates of total knee replacement?
According to data submitted at the 2015 OARSI (Osteoarthritis Research Society International (OARSI) World Congress) it plays a powerful role in delaying TKA.
According to this data, viscosupplementation injections delay total knee replacement surgery by as much as two years. Patients who do not receive a viscosupplement injection, on average, went on to have a TKA within 114 days of an OA (osteoarthritis) diagnosis.
The study was conducted by researchers from UCLA, Louisiana State University and Seikagaku Corp. It was sponsored by two viscosupplement companies—Bioventus and Seikagaku Corporation.
The researchers looked at data for 182, 022 patients who’d been diagnosed with OA. From the date of the diagnosis, patients who received a hyaluronic acid (HA) viscosupplement injection in their knee were able to more than double the time to total knee replacement surgery.
Patient who did not receive an HA injection, had a total knee replacement within 114 days, on average. Patient who DID receive an HA injection were able to delay their knee replacement to 386 days after OA diagnosis. The more HA injections the patients had, the longer the delay. Patients, for example, with three courses of HA injections were able to delay, on average, the total knee replacement 875 days.
The researchers were Roy Altman M.D., at UCLA, Sooyeol Lim MSc., Seikagaku Corp., Grant Steen Ph.D., with Bioventus and Vinod Dasa M.D. at Louisiana State University.
Perfect Storm for TKA?
The number of health insurers who are canceling reimbursement for HA injections is rising and it is coming at a time when insurance coverage for musculoskeletal treatment has expanded dramatically. In the past 24 months payers in Florida, Oregon and Massachusetts have stopped paying for HA injections.
Total knee replacement, like many other musculoskeletal procedures, can be delayed if there are alternative treatments available—like viscosupplementation. But if viscosupplementation is no longer reimbursable, then, according to the OARSI study, total knee replacement rates will likely increase.
TKA, of course, is reimbursable. At significantly higher rates than viscosupplementation.
More insured. Fewer options for patients with OA of the knee.
Is this the perfect storm for TKA?
To read the Society of Actuaries report for yourself go to this link.
