Impact of declining reimbursement and rising hospital costs on the feasibility of total hip arthroplasty.

Total hip arthroplasty, although a very successful clinical treatment, remains an expensive procedure in an era of constrained health care resources. Hospitalization cost, charge, and reimbursement data were compared between all patients who underwent elective, primary, unilateral total hip arthroplasty in 1988 and 1993 at the UCLA Medical Center. Although length of hospitalization decreased by 36%, increases both in unit supply costs and in the intensity of hospital services prevented a statistically significant reduction in total hospitalization cost. Reimbursement declined by 27% after calculating inflation with the Consumer Price Index for Medical Care. Further, the margin by which reimbursement exceeded cost decreased from 66% in 1988 to 8% in 1993. These trends constitute a serious threat to the financial feasibility of total hip arthroplasty.