Patient Pathway Comparison for Total Hip Replacement in the United States and Germany — Why the Payment Model Matters

Authors: Benedikt Simon, PhD, Ronald Navarro, MD, Nithin C. Reddy, MD, Jeff L. Convissar, MD, Violeta Rabrenovich, MHA, Elizabeth Paxton, PhD, Brian H. Fasig, PhD, +7, and Juergen Malzahn, MDAuthor Info & AffiliationsPublished May 17, 2023NEJM Catal Innov Care Deliv 2023;4(6)DOI: 10.1056/CAT.22.0456VOL. 4 NO. 6

Summary

As developed countries are faced with both the challenge of rising health care costs and the quest for improved medical outcomes, cross-global learnings can illuminate advances in medical best practices as well as the incentive system that leads to reduced costs and improved patient outcomes. Using the example of elective primary total hip replacements (THRs) for osteoarthritis — one of the most common elective surgical procedures in Organisation for Economic Co-operation and Development countries — the authors illustrate differences in clinical and financial practices between a capitation-based payment model used by Kaiser Permanente, a private, integrated health system in the United States, and a fee-for-service model used by the AOK Federation, a not-for-profit health insurance system that comprises 11 public health insurance plans with about 27 million insurees that is representative of Germany’s public health care system. The authors also shed some light on the different incentive structures and how they contribute to Kaiser Permanente achieving significantly better medical outcomes while using notably fewer resources than its counterparts in Germany. Applying Kaiser Permanente’s clinical practices for its patients with THRs, Germany would be able to increase quality of care and reduce the number of inpatient hospital days by more than 1.5 million as well as the number of postacute care inpatient days by 3.5 million per annum.