Drugs vs. Surgery: Estimating the Joint Replacement Offset Value of GLP‑1 Therapy

• In Event: Upfront Costs, Downstream Savings, and Financial Burden in Health Care

Abstract

Total hip and knee joint replacements are among the most common and costly elective procedures in the United States, with more than 1 million procedures performed each year, and episode costs often in the tens of thousands of dollars. Obesity is strongly linked to osteoarthritis‑related disability: osteoarthritis prevalence rises with body mass index, and CDC modeling suggests that lower obesity prevalence could prevent more than 111,000 total knee replacements. Because GLP‑1 receptor agonists produce substantial weight loss, they may reduce joint loading, delay joint replacement, or lower episode spending when surgery occurs. Yet little is known about whether these drugs generate orthopedic savings that fully offset their acquisition costs.We ask two related questions. Does GLP‑1 initiation reduce joint replacement incidence, delaying or preventing surgery altogether? And among patients who proceed to surgery, does it lower 90‑day episode spending? Together, the answers will reveal whether the orthopedic savings from GLP‑1 therapy are large enough to matter for payer cost‑effectiveness calculations.We use MarketScan commercial claims data from 2016–2024, a large nationally representative sample of privately insured adults. Our analytic sample includes new GLP‑1 initiators with a claims‑based diagnosis of hip or knee osteoarthritis, identified via validated ICD‑10 algorithms applied across inpatient and outpatient records. Joint replacements are identified using CPT codes for total hip and knee arthroplasty.We implement a stacked difference‑in‑differences design, comparing patients who initiate GLP‑1 therapy in a given month with not‑yet‑treated individuals who initiate the same drugs in later months, thereby accounting for secular trends in surgery rates and spending. Propensity score weighting addresses baseline differences between groups. For surgery incidence, we estimate whether GLP‑1 initiation reduces the probability of total hip, total knee, and combined joint replacement within 1, 2, and 3 years of initiation. For episode spending, we estimate 90‑day cost differences for those who proceed to surgery, including facility, professional, rehabilitation, and readmission components.Preliminary results identify approximately 1.7 million individuals with hip or knee osteoarthritis in the MarketScan data over the study period, of whom 124,487 initiated GLP‑1 therapy after their OA diagnosis. Annual initiations rose nearly sevenfold, from 4,733 in 2017 to 32,754 in 2024, with marked acceleration after 2021. Among initiators, 83% had obesity and 59% had type 2 diabetes; the mean age was 55.5 years, and 67% were female. Nineteen percent underwent joint replacement during the study period. Among the 7,516 initiators who underwent arthroplasty after starting GLP‑1 therapy, the median time to surgery was 10.2 months, and 21% proceeded to surgery more than two years after initiation.By the time of the conference, we will present full causal estimates of GLP‑1 initiation on joint replacement incidence and episode spending. We expect these findings to inform ongoing debates over GLP‑1 coverage mandates and value‑based formulary design and to quantify, for the first time, whether the orthopedic savings from GLP‑1 therapy are large enough to meaningfully offset drug expenditure in cost‑effectiveness frameworks.

Author

• Sih-Ting Cai, University of Southern California
  Presenting Author