Not all Costs Are Created Equal: What Are the Types of Costs and Why Do They Matter?

Abstract

Value-based care models are health care economic frameworks that aim to prioritize and financially incentivize quality of care, provider performance, and patient experience. The focus on value-based care metrics will undoubtedly lead to a greater weight placed on economic analyses in arthroplasty. Authors of cost analyses in arthroplasty often use the term "cost" in ways that have vastly different underlying meanings. It is imperative that surgeons understand the different characteristics of cost data, where they come from, and how to interpret them. There are three types of costs: 1) costs to the health care providers; 2) costs to the payer; and 3) costs to society. In this review, we evaluate where each type of cost data comes from, what are the appropriate conclusions to be drawn from them, and examples of how they are used in the literature.