Comparing the cost of joint replacement surgery in

patients receiving social security insurance in Shahid

Beheshti and Shahid Chamran hospitals in Shiraz

Mohammadmehdi Esfandiaribayat

, Abbas Ghavam

* and Abbas Yazdanpanah

Department of Healthcare Management, Marvdasht Branch, Islamic Azad University, Marvdasht, Iran

Assistant Professor, Department of Environmental Science, Institute of Sciences and High Technology and

Environmental Sciences, Graduate University of Advanced Technology, Kerman, Iran

Assistant professor, Department of Healthcare Management, Marvdasht Branch, Islamic Azad University,

Marvdasht, Iran

ABSTRACT

This study examines the cost of joint replacement surgery services for the persons receiving Social Security insurance

in Shahid (martyr) Beheshti hospital and compares it with Shahid Chamran hospital in Shiraz. In the study, it was

intended to compare the cost of joint replacement services in two hospitals in Shiraz.In this study, the activity-based

cost calculation method was used to calculate the costs. The data were analyzed by using the logistic regression

model.The results showed that the costs in the Shahid Beheshti hospital af liated with Social Security were more than

the Shahid Chamran hospital in Shiraz. The cost of all the sub-items in the Shahid Beheshti hospital was more than

the Shahid Chamran hospital, only in the sub-item of consumer goods cost, there was not a signi cant difference.

The study’s  ndings will introduce the cost factors of a hospital to the health managers and policy makers. The cost

of services in many parts of the study was roughly equal to the tariff of health services in 2016. In some of the items

of cost, the cost was less than the tariff, and in others was more than the announced tariff.

KEY WORDS: JOINT REPLACEMENT SURGERY, SHAHID BEHESHTI HOSPITAL, SHAHID CHAMRAN HOSPITAL, SHIRAZ

139

ARTICLE INFORMATION:

*Corresponding Author: ghavam39@gmail.com

Received 1

Jan, 2017

Accepted after revision 3

April, 2017

BBRC Print ISSN: 0974-6455

Online ISSN: 2321-4007

Thomson Reuters ISI ESC and Crossref Indexed Journal

NAAS Journal Score 2017: 4.31 Cosmos IF : 4.006

reserved.

Online Contents Available at: http//www.bbrc.in/

Biosci. Biotech. Res. Comm. Special Issue No 1:139-145 (2017)

140 COMPARING THE COST OF JOINT REPLACEMENT SURGERY BIOSCIENCE BIOTECHNOLOGY RESEARCH COMMUNICATIONS

Esfandiaribayat, Ghavam and Yazdanpanah

INTRODUCTION

The joint replacement or arthroplasty is a type of surgery

in which the damaged joint surfaces are replaced with

an arti cial surface. The main goal of joint replacement

is to relieve the pain caused by erosion, arthritis, rheu-

matism and destruction of the articular surface. Obtain-

ing the optimal range of motion in joint and modify-

ing the deformations created in the joint are considered

as another factors to use the arti cial joint(Bachmeier

et al., 2001).

“Arthroplasty is a type of reconstructive surgery

that is performed to reduce the pain and increase the

range of motion in the joints with limitation of motion.

The most common arthroplasty performed today is the

total joint replacement which is also called the joint

replacement(Nunley et al., 2012). Arthroplasty is a type

of surgery in which the movable articular surfaces that

have severely damaged and destroyed are resected so

that the joint can move with less pain. Arthroplasty is

usually used in the treatment of joints that have suffered

severe damage. There are three types of arthroplasty: 1)

Resection arthroplasty. 2) Interposition arthroplasty. 3)

Prosthetic arthroplasty which is also called joint replace-

ment. In this type of surgery, after removing the articu-

lar surfaces, they are replaced with the metal, ceramic

or plastic pieces which are called arti cial joint(Healy,

Iorio, Ko, Appleby, & Lemos, 2002),(Koskinen, Eskelinen,

Paavolainen, Pulkkinen, & Remes, 2008).

Shahid Beheshti hospital of Shiraz is one of the hos-

pitals under the Social Security Organization. The Social

Security insured persons do not pay the fee for the ser-

vices done for them in the Social Security hospitals and

all expenses will be paid by the indirect health sector

of the Social Security Organization. It seems that this

makes the necessary sensitivity that exists in the public

and private sectors to monitor and calculate the cost of

various services, does not exist.

Health in Social Security is divided into two sectors:

direct and indirect health. Direct health includes the

medical centers belonging to the social security organi-

zation in which the health care is offered free to the

insured. Indirect health is another sector of the organiza-

tion that is responsible for the purchase of service from

the various diagnostic and therapeutic centers (public

and private) by contracting with them that the Insured

receive the health care by visiting the centers after pay-

ment of franchise(Arefnezhad et al., 2016; Kazemi Kary-

ani, Homaie Rad, Pourreza, & Shaahmadi, 2015).

The  rst step towards the economic management of

detailed planning about the future performance of the

hospital is the accurate calculation of the cost of each

part(Se ddashti, Rad, Mohamad, & Bordbar, 2016). How-

ever, the lack of cost accounting in hospitals has made

the correct amount of consumer spending does not exist

in every hospital, in every sector and on every patient

and lead to the budget bargain method, important hos-

pital function, etc.(Kazemi Karyani et al., 2015),(Rad,

Rezaei, & Fallah, 2015).

With regard to the implementation of the health

reform plan and new tariff book in country’s hospitals,

there has been a sharp rise in prices of medical services.

In this regard, controlling the medical costs that one of

the most expensive is the surgery, is a priority. Analyz-

ing and comparing the costs of surgery in the Social

Security hospital to other hospitals is important in two

aspects. The  rst aspect is to  nd the right solution to

optimize the surgery costs including the costs related

to the physicians, staff, equipment, daybed, para clinic,

etc. and the second aspect that is considerable in this

study is the determination of priority whether the direct

investment to perform the surgery in the Social Security

hospital bene ts the organization or purchasing the ser-

vice from other hospitals under the contract. The impor-

tance of this issue arises from this fact that by having

the data and analyzing the costs carried out in the social

security hospitals and centers under the Social Security

Agreement, it can be improved the long-term care poli-

cies of organization(Samadi & Homaie Rad, 2013),(Bay-

ati, Sarikhani, Rad, Heydari, & Lankarani, 2014).

For performing more hip and knee joint replacement

surgery in these two hospitals and their high cost, these

surgeries were selected. The cost of hip and knee joints

replacement surgery in Shahid Chamran University Hos-

pital was compared with this cost in the Organization’s

Shahid Beheshti Hospital according to the implementa-

tion of the health reform plan and increased costs result-

ing from it and it was determined as far as possible what

the differences there are between the cost of arthroplasty

in the two hospitals according to the hospital bills and

which of the bill rows (premium, daybed, consumer

goods, etc.) has created the differences. The basis for

comparing the information contained in patients’ bill

was from early October 2015 to late September 2016. In

this study, the total prosthetic Arthroplasty includes the

total Knee Arthroplasty (TKA) and total hip Arthroplasty

(THA). And the question is answered that what differ-

ence is there between the total costs of Shahid Chamran

hospital and all the same costs calculated in the bill of

Shahid Beheshti hospital?

METHOD

This is a descriptive-analytic study that will be conducted

in a retrospective way. The method used is to view the

available documents in the archive of the Social Secu-

rity Organization and accounting records of the studied

BIOSCIENCE BIOTECHNOLOGY RESEARCH COMMUNICATIONS COMPARING THE COST OF JOINT REPLACEMENT SURGERY 141

Esfandiaribayat, Ghavam and Yazdanpanah

Table 1. the descriptive  ndings of the study on the gender of the subjects

Variable Frequency Ratio Chamran Hospital Beheshti Hospital

Gender-male 118 67.8 58 40

Gender-female 56 32.2 30 46

Total 174 100 88 86

Table 2. Descriptive  ndings of the study on the cost of joint

replacement services

Total costs Coef cient SD T-statistic P-value

Gender-male 35600000 17000000 2.09 0.04

Beheshti Hospital 10100000 1600000 629 0.00

Length of stay -1078129 5561830 -0.19 0.85

Constant coef cient 150000000 23000000 6.53 0.00

Table 3. Comparing the cost of joint replacement services

Coef cient SDT-statisticP-valueTotal costs

0,042,091700000035600000Gender-male

0,006,29160000010100000Beheshti Hospital

0,85-0,195561830-1078129Length of stay

0,006,5323000000150000000Constant coef cient

hospitals. The study population will be comprised of two

Shahid Beheshti and Shahid Chamran hospitals in Shi-

raz and the patients referred to them. In this study, all

samples admitted to the two hospitals during the period

April to September 2016, will be used. Thus, the sam-

ple size does not matter in this study. Sampling is done

by viewing the documents in the archives of the Social

Security and accounting records of the studied hospitals

and the samples examined will be collected using the

checklists.

The information can be retrieved and also accessed

by data processing, administrative and  nancial units,

statistics and economics of treatment, and clinical and

laboratory departments of hospital. Given that the

above-mentioned information is placed in the  nancial

sector of hospital HIS system, access to the system is

possible via the hospital’s database. Excel software will

be used to process and summarize the data. Moreover,

SPSS software will be used for the report-statistical con-

clusion and analysis.

The variables of this study include the costs of dif-

ferent departments of joint replacement surgery includ-

ing the cost of daybed, surgery, anesthesia, laboratory

and prosthesis. Furthermore, other variables such as the

number of hospital beds and staff are also collected and

their impact on the cost of services is assessed. While

using the paired t test and chi-square test, the costs of

services in two hospitals will be compared.

FINDINGS

Table 1 shows the descriptive  ndings of the study on

the gender of the subjects. As the above table shows,

67.8% of subjects were male with a frequency of 118

people and the rest was female. In addition, 58 men were

related to the Chamran hospital and 40 were related to

the Shahid Beheshti Hospital.

Table 2 shows the descriptive  ndings of the study on

the cost of joint replacement services in the two studied

hospitals as a whole. In addition to the average costs, the

standard deviation and minimum and maximum values

of costs are also included.

As can be seen from the above table, the average

premium was equal to 71815177 IRR, average consumer

goods 21757406 IRR, paraclinic average cost 13666891

IRR, average anesthesia 30248387 IRR, average cost of

prosthesis 85208976 IRR and average total cost of joints

replacement 222696838 IRR. The average length of stay

for patients was also averaged 2.77 days. This amount

was 2.95 days in the Shahid Beheshti Hospital (af liated

to Social Security) and was 2.59 days for the Cham-

ran Hospital af liated to Shiraz University of Medical

Sciences. The maximum number of hospitalization days

was equal to 7 days in the Shahid Beheshti hospital and

5 days in the Chamran hospital. The total cost of daybed

for patients in two hospitals was equal to 109982800

IRR.

142 COMPARING THE COST OF JOINT REPLACEMENT SURGERY BIOSCIENCE BIOTECHNOLOGY RESEARCH COMMUNICATIONS

Esfandiaribayat, Ghavam and Yazdanpanah

Table 3 shows the analytical results of the study on

the cost of joint replacement services and the compari-

son between the two hospitals. As speci ed in the table,

the Beheshti Hospital variable coef cient is signi cant

and positive and indicates that the cost of services in

Shahid Beheshti hospital af liated to Social Security is

more than Shahid Chamran hospital. Since the hospital

type variable was imaginary and for the Shahid Beheshti

hospital was 1 and for the Shahid Chamran hospital was

zero, the Chamran hospital variable as a basic variable

input into the model and as a result, since the variable

was for the comparison between the two hospitals and

recognition of differences, the variable coef cient was

as a number and related to the Shahid Chamran hospital

variable. The cost in men was more than women and

was not associated with the length of stay for patients

in the hospital. The above variable coef cient is also

equal to 10100000 IRR, indicating a difference of nearly

one million Toman in the services cost between the two

hospitals.

Table 4 shows the analytical  ndings of the study

on the surgery premium cost of 1770000 joint replace-

ment services and the comparison between the two hos-

pitals. Since the hospital type variable was imaginary

and for the Shahid Beheshti hospital was 1 and for the

Shahid Chamran hospital was zero, the Chamran hospi-

tal variable as a basic variable input into the model and

consequently, since the variable was for the comparison

between the two hospitals and recognition of differ-

ences, the variable coef cient was a number and related

to the Shahid Chamran hospital variable. As speci ed

in the table, the Beheshti Hospital variable coef cient

is signi cant and positive and indicates that the cost

of services in the Shahid Beheshti hospital af liated to

Social Security is more than the Shahid Chamran hos-

pital. Also, this cost was not associated with the gender

of the subjects. The above variable coef cient is equal to

1770000 IRR. The cost of premiums was not associated

with the length of stay.

Table 5 shows the analytical  ndings of the study

on the consumer spending of joint replacement services

and its comparison between the two hospitals. Since the

variable of hospital type was dummy and for the Sha-

hid Beheshti hospital was 1 and for the Shahid Chamran

hospital was zero, the Chamran hospital variable input

into the model as a basic variable and consequently, since

the variable was for comparing between the two hospi-

tals and understanding the differences, the variable coef-

 cient was a number and related to the Shahid Chamran

hospital variable. As speci ed in the table, the Shahid

Beheshti Hospital variable coef cient is not signi cant

and indicates that the service brokerage cost in the Shahid

Beheshti hospital af liated to Social Security was similar

to the Shahid Chamran hospital. Moreover, this cost was

not associated with the gender of the subjects. The cost of

premium was not related to the length of stay.

Table 6 shows the analytical  ndings of the study on

the para clinic cost of joint replacement services and its

comparison between the two hospitals. Since the vari-

able of hospital type was imaginary and for the Shahid

Beheshti hospital was 1 and for the Shahid Chamran

hospital was zero, the Shahid Chamran hospital vari-

able as a basic variable input into the model and as a

result, since the variable was for comparing between

the two hospitals and understanding the differences,

the variable coef cient was a number and related to the

Shahid Chamran hospital variable. As speci ed in the

table, the Shahid Beheshti Hospital variable coef cient

Table 4. Comparing the brokerage cost of joint replacement

services

Coef cient SDT-statisticP-value

0,121,5729614444653202Gender-male

0,006,3527839491770000Beheshti Hospital

0,94-0,08968150-73833Length of stay

0,0014,95399995159800000Constant coef cient

Table 5. Comparing the consumer spending of joint replacement

services

Coef cient SDT-statisticP-value

0,141,4926207163898872Gender-male

0,410,8324684212053253Beheshti Hospital

0,38-0,88856759-754014Length of stay

0,005,69353973720200000Constant coef cient

BIOSCIENCE BIOTECHNOLOGY RESEARCH COMMUNICATIONS COMPARING THE COST OF JOINT REPLACEMENT SURGERY 143

Esfandiaribayat, Ghavam and Yazdanpanah

is signi cant and positive and indicates that the service

brokerage cost in the Shahid Beheshti hospital af liated

to Social Security is higher than the Shahid Chamran

hospital. Also, this cost was not associated with the gen-

der of the subjects. The  nished consumer cost was not

related to the length of stay. The difference in the above

amount also was equal to 459901 IRR.

Table 7 shows the analytical  ndings of the study

regarding the anesthesia cost of joint replacement ser-

vices and its comparison between the two hospitals.

Since the variable of hospital type was imaginary and

for the Shahid Beheshti hospital was 1 and for the Sha-

hid Chamran hospital was zero, the Shahid Chamran

hospital variable as a basic variable input into the model

and as a result, since the variable was for the compari-

son between the two hospitals and recognition of differ-

ences, the variable coef cient was a number and related

to the Shahid Chamran hospital variable. As speci ed

in the table, the Shahid Beheshti Hospital variable coef-

 cient is signi cant and positive and indicates that the

anesthesia cost in the Shahid Beheshti hospital af li-

ated to Social Security is higher than the Shahid Cham-

ran hospital. Also, the cost was not associated with the

gender of the subjects. The cost of anesthesia was not

related to the length of stay. The difference in the above

amount also was equal to 1230000 IRR.

Table 8 shows the analytical  ndings of the study on

the prosthesis cost of joint replacement services and its

comparison between the two hospitals. Since the vari-

able of hospital type was imaginary and for the Shahid

Beheshti hospital was 1 and for the Shahid Chamran

hospital was zero, the Shahid Chamran hospital variable

as a basic variable input into the model and as a result,

since the variable was for the comparison between the

two hospitals and recognition of differences, the vari-

able coef cient was a number and related to the Shahid

Chamran hospital variable. As speci ed in the table, the

Shahid Beheshti Hospital variable coef cient is signi -

cant and positive and indicates that the prosthesis cost

in the Shahid Beheshti hospital af liated to Social Secu-

rity is more than the Shahid Chamran hospital. Further-

more, the cost was not associated with the gender of

the subjects. The  nished cost of the prosthesis was not

related to the length of stay. The difference in the above

amount also was equal to 6410000 IRR.

Table 9 shows the analytical  ndings of the study on

the joint replacement services’ daybed cost and the com-

parison between the two hospitals. As speci ed in the

table, the Shahid Beheshti Hospital variable coef cient

is signi cant and positive and indicates that the cost of

the daybed in the Shahid Beheshti hospital af liated to

Social Security is more than the Shahid Chamran hos-

Table 6. The analytical  ndings of the study on the para clinic cost

of joint replacement services

Coef cient SDT-statisticP-value

0,350,9515398681459314Gender-male

0,003,141450383454901Beheshti Hospital

0,79-0,27503411-137331Length of stay

0,005,16207986210700000Constant coef cient

Table 7. The analytical  ndings of the study on the anesthesia cost

of joint replacement services

Coef cient SDT-statisticP-value

0,261,1437195154234473Gender-male

0,003,5235033671230000Beheshti Hospital

0,24-1,171215976-1422506Length of stay

0,004,98502385825000000Constant coef cient

Table 8. The analytical  ndings of the study on the prosthesis cost

of joint replacement services

Coef cient SDT-statisticP-value

0,171,381540000021300000Gender-male

0,004,41145000006410000Beheshti Hospital

0,800,2650383311309556Length of stay

0,101,652080000034300000Constant coef cient

144 COMPARING THE COST OF JOINT REPLACEMENT SURGERY BIOSCIENCE BIOTECHNOLOGY RESEARCH COMMUNICATIONS

Esfandiaribayat, Ghavam and Yazdanpanah

pital. The cost also was not associated with the gender

of the subjects.

DISCUSSION

In this study, it was tried to compare the cost of knee

replacement surgery services in two large hospitals in

Shiraz. The results showed that the cost of services at the

hospital af liated to the Social Security was more than

the University Hospital. Chakubz et al found that the

intensive care services are the most expensive hospital

services in Canada(Jacobs & Noseworthy, 1990). Dornyg

et al also found that the patients with joint problems

impose the highest costs to the health system (Buch-

mueller, Couf nhal, Grignon, & Perronnin, 2004). Many

studies have demonstrated that the use of a standard

costing system can be effective in calculating the cost of

goods and services and cause the standardization of the

costs in hospitals(Rezaei, Bazyar, Fallah, Chavehpour, &

Rad, 2015). In this case, a study was done by Crowe et

al in the  eld of activity-based costing in the pediatric

radiology department of Oulu teaching hospital in Fin-

land in 2007 that 7452 radiology procedures were stud-

ied in this study. The information in this study was col-

lected through the radiology information system as well

as personnel and accounting units of the hospital. The

results showed that the overhead costs have decreased

from 57 percent to 16 percent with the implementa-

tion of activity-based costing system and the unit cost

change in various procedures of radiology department

has changed from 42 percent to 85 percent(Crow & Wil-

lis, 2009).

The hospitals and other health care organizations are

increasingly faced with a competitive and challenging

environment. The strong focus on the quality of patient

care, the high cost of service delivery and the  erce com-

petition are among the factors that force these organiza-

tions to revise the methods of service delivery and the

services cost(Losina et al., 2009),(Hatam, Tourani, Rad, &

Bastani, 2016),(Rad, Kavosi, & Arefnezhad, 2016). In the

meantime, increasing the accuracy and precision and

linking the information of costs are the main challenges

of hospitals for the proper spending and management

decisions. The aim of any costing and cost management

system is to provide the accurate and useful informa-

tion for helping the organizations so that they can pro-

vide the quality products and services in a competitive

environment(Homaie Rad, Ghaisi, Arefnezhad, & Bay-

ati, 2015; Tuominen & Eriksson, 2011). Costing can be

de ned as the estimated cost of the  nal product. In

recent years, there have been much progress in the cost-

ing methods that is hoped to be able to more precisely

calculate the health costs.

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