RESOURCE UTILIZATION AND COST OF CARE FOR RHEUMATOID-ARTHRITIS AND OSTEOARTHRITIS IN A MANAGED CARE SETTING - THE IMPORTANCE OF DRUG AND SURGERY COSTS

Objective. To describe the frequency and costs of medical services for patients with osteoarthritis (OA) or rheumatoid arthritis (RA) in a m anaged care setting. Methods. Individual utilization records of medica l and pharmacy services for OA and Ri patients were obtained from a gr oup-model health maintenance organization (HMO). Estimates were made f or costs of drugs and medical services for arthritis from July 1, 1993 to June 30, 1994 using Medicare reimbursement schedules and average w holesale drug prices, Calculated rates for each population were expres sed as counts of events or as dollars per person-year. Results. The av erage individual cost rate of arthritis-related care for 365 RA patien ts 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% ($150,9 38), 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 fo r 46% ($2,170,890) of the total cost of OA care, medications accounted for 32% ($1,509,637), and ambulatory care accounted for 22% ($1,047,8 98). Conclusion. RA care, in the setting of this study, was characteri zed by intensive treatment, especially frequent use of medications tha t were delivered to most patients, Although the cost of RA care per pa tient was high, cost to the managed care provider was relatively low, owing to the rarity of RA, OA care tended to de infrequent, and the la rgest component of cost was hospital care for a small proportion of pa tients (5%), Owing to the greater prevalence of OA, care of OA was nea rly 7 times more costly to the managed care provider than mas care of RA.