March 28 th , 2014 Total Joint Replacements

1. Community Dialogue March 28th, 2014Total Joint Replacements

2. 2011 1997 Minnesota Health Action Group; confidential - do not copy or distribute without permission

3. 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

4. International Landscape – U.S. Compared to OECD Knee replacements Hip replacements U.S. Frequency Per 100,000 Minnesota Health Action Group; confidential - do not copy or distribute without permission

5. Trend in Selected OECD Countries 2000-2009 Total Knee Replacements Total Hip Replacements Minnesota Health Action Group; confidential - do not copy or distribute without permission

6. 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

7. 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

8. 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

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