Biotech Values

[DewDiligence]

Good news for SYK and ZMH: knee-replacement surgery costs
only $18K per incremental QALY (also see #msg-36422709).

http://www.reuters.com/article/marketsNews/idINN2250997120090622

›Replacing Arthritic Knees Is Cost-Effective—Study

Mon Jun 22, 2009 4:31pm EDT

CHICAGO, June 22 (Reuters) - Knee replacement surgery is expensive but worth the cost, especially if performed by experienced surgeons, U.S. researchers said on Monday.

Some $11 billion is spent on 500,000 total knee replacements each year in the United States, and the number is projected to multiply seven times by 2030 because of the aging, overweight population.

Elena Losina and colleagues at Brigham and Women's Hospital and the Boston University School of Public Health set out to determine if the operations on Medicare patients aged 65 and older were cost-effective -- a subjective threshold based on years of life spent in good health.

Some 9 out of 10 knee replacements are successful -- knee pain goes away and patients become more mobile.

In the study, knee replacement surgery and subsequent costs added up to $57,900 per patient, which was $20,800 more than was spent on those who did not get the surgery.

Those who got artificial knees lived more than a year longer in good health than those who did not, and the researchers calculated the added cost per year of good-quality life at $18,300. They deemed that outlay, when compared to other procedures to treat aging bones, "highly cost-effective."

The surgery's cost-effectiveness rose with the experience of the surgeons who worked at high-volume hospitals, as is true with many complicated procedures. Results were generally not as good for blacks, Hispanics, and older patients, according to the report published in the Archives of Internal Medicine.

The prosthetics are made by companies such as Stryker Corp (SYK), Zimmer Holdings Inc (ZMH), Johnson & Johnson (JNJ) and Smith & Nephew (SN.L).

President Barack Obama has identified cost-effectiveness studies as a way to trim U.S. health costs and steer doctors away from wasteful procedures. Some $1.1 billion was included in the federal stimulus package to fund such studies.‹