Cost-Effectiveness of Total Hip and Knee Replacements for the Australian Population with Osteoarthritis: Discrete-Event Simulation Model

Background: Osteoarthritis constitutes a major musculoskeletal burden for the aged Australians. Hip and knee replacement surgeries are effective interventions once all conservative therapies to manage the symptoms have been exhausted. This study aims to evaluate the cost-effectiveness of hip and knee replacements in Australia. To our best knowledge, the study is the first attempt to account for the dual nature of hip and knee osteoarthritis in modelling the severities of right and left joints separately. Methodology/Principal Findings: We developed a discrete-event simulation model that follows up the individuals with osteoarthritis over their lifetimes. The model defines separate attributes for right and left joints and accounts for several repeat replacements. The Australian population with osteoarthritis who were 40 years of age or older in 2003 were followed up until extinct. Intervention effects were modelled by means of disability-adjusted life-years (DALYs) averted. Both hip and knee replacements are highly cost effective (AUD 5,000 per DALY and AUD 12,000 per DALY respectively) under an AUD 50,000/DALY threshold level. The exclusion of cost offsets, and inclusion of future unrelated health care costs in extended years of life, did not change the findings that the interventions are cost-effective (AUD 17,000 per DALY and AUD 26,000 per DALY respectively). However, there was a substantial difference between hip and knee replacements where surgeries administered for hips were more cost-effective than for knees. Conclusions/Significance: Both hip and knee replacements are cost-effective interventions to improve the quality of life of people with osteoarthritis. It was also shown that the dual nature of hip and knee OA should be taken into account to provide more accurate estimation on the cost-effectiveness of hip and knee replacements.