Resource utilization and cost of care for rheumatoid arthritis and osteoarthritis in a managed care setting. The importance of drug and surgery costs

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Abstract
Objective. To describe the frequency and costs of medical services for patients with osteoarthritis (OA) or rheumatoid arthritis (RA) in a managed care setting. Methods. Individual utilization records of medical and pharmacy services for OA and RA patients were obtained from a group-model health maintenance organization (HMO). Estimates were made for costs of drugs and medical services for arthritis from July 1, 1993 to June 30, 1994 using Medicare reimbursement schedules and average wholesale drug prices. Calculated rates for each population were expressed as counts of events or as dollars per person-year. Results. The average individual cost rate of arthritis-related care for 365 RA patients was $2,162 per year, and the total cost of RA care to the HMO was $703,053. Prescription medications accounted for 62% ($436,440) of the total cost of RA care, while ambulatory care accounted for 21% ($150,938), and hospital visits accounted for 16% ($115,674). With regard to 10,101 OA patients, the average individual cost rate was $543 per year, and total cost to the HMO was $4,728,425. Hospital care accounted for 46% ($2,170,890) of the total cost of OA care, medications accounted for 32% ($1,509,637), and ambulatory care accounted for 22% ($1,047,898). Conclusion. RA care, in the setting of this study, was characterized by intensive treatment, especially frequent use of medications that were delivered to most patients. Although the cost of RA care per patient was high, cost to the managed care provider was relatively low, owing to the rarity of RA. OA care tended to be infrequent, and the largest component of cost was hospital care for a small proportion of patients (5%). Owing to the greater prevalence of OA, care of OA was nearly 7 times more costly to the managed care provider than was care of RA.