Patient Perception of Value in Bundled Payments for Total Joint Arthroplasty

Adam J. Schwartz, James F. Fraser, Allison M. Shannon, Nikki T. Jackson, T. S. Raghu

Research output: Contribution to journalArticlepeer-review

6 Scopus citations


Background A central concern for providers in a bundled payment model is determining how the bundle is distributed. Prior studies have shown that current reimbursement rates are often not aligned with patients' values. While willingness-to-pay (WTP) surveys are perhaps useful in a fee-for-service arrangement to determine overall reimbursement, the percentage of payment distribution might be as or more important in a bundled payment model. Methods All patients undergoing primary total joint arthroplasty by a single surgeon were offered participation in a preoperative WTP survey. At a minimum 3 months postoperatively, patients were mailed instructions for an online follow-up survey asking how they would allocate a hypothetical bonus payment. Results From January through December 2014, 45 patients agreed to participate in the preoperative WTP survey. Twenty patients who were minimum 3 months postoperative also completed the follow-up survey. Patients valued total knee and hip arthroplasty at $28,438 (95% confidence interval [CI]: $20,551-36,324) and $39,479 (95% CI: $27,848-$51,112), respectively. At 3 months postoperatively, patients distributed a hypothetical bonus payment 55.5% to the surgeon (95% CI: 47.8%-63.1%), 38% to the hospital (95% CI: 30.3%-45.7%), and 6.5% (95% CI: −1.2% to 14.2%) to the implant manufacturer (P < .001). Conclusion The data suggest that total joint arthroplasty patients have vastly different perceptions of payment distributions than what actually exists. In contrast to the findings of this study, the true distribution of payments for an episode of care averages 65% to the hospital, 27% to the implant manufacturer, and 8% to the surgeon. While many drivers of payment distribution exist, this study suggests that patients would allocate a larger proportion of a bundled payment to surgeons than is currently disbursed. This finding may also provide a plausible explanation for patients' consistent overestimation of surgeon reimbursements.

Original languageEnglish (US)
Pages (from-to)2696-2699
Number of pages4
JournalJournal of Arthroplasty
Issue number12
StatePublished - Dec 1 2016


  • Medicare
  • bundled payments
  • bundled total joint arthroplasty
  • health care economics
  • willingness to pay

ASJC Scopus subject areas

  • Orthopedics and Sports Medicine


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