Research Supporting Health Insurance Coverage for Prosthetics

The following documents are available for download. Follow link at the end of each article summary.

Economic Value of Advanced Transfemoral Prosthetics
[The Rand Corporation, 2017]

The RAND Corporation, a nonprofit, nonpartisan research organization committed to the public interest, published a research report in 2017 entitled, “Economic Value of Advanced Transfemoral Prosthetics”.

The research team constructed a simulation model over a 10-year period of time of individuals with the following conditions:

  • Individuals covered by Medicare
  • Individuals classified as having a K3 or K4 function level. K-level definitions run from K-0 to K-4, with K-4 having the highest level of physical activity with regard to the use of their artificial limb.
  • A single Above Knee Amputation (AKA)

Study Results

“The results suggest that the incremental cost of MPKs are in line with commonly accepted criteria for good value for money and with the incremental cost of other medical devices.”

  • The main clinical benefit for MPK patients is the reductions of falls and resulting injuries and osteoarthritis incidences.
    • MPKs will fall 26 percent per year.
    • NMPKs will fall 82 percent per year.
    • 10.4 percent of these falls result in additional medical costs.
    • 7 percent of these falls result in death (Cost $27,300)
    • 40 percent result in major injuries with inpatient and/or skilled nursing facility treatment (cost $23,300)
    • The remaining 53 percent of falls result in minor injuries (cost $1,090).
  • There are 22 fall-related deaths per 10,000 patient years for NMPK users.
  • There are only 4 fall-related deaths per 10,000 patient years for MPK users, i.e. 18 lives are saved per 10,000 patient years.
  • The data showed 66 injurious falls with the MPK
  • The data showed 289 injurious falls with the NMPK.
  • MPK amputees gained about 0.91 quality-adjusted life years per person over NMPKs. The difference is attributed to the improvement in quality of life.
    • Improved mobility
    • Safety
    • User confidence
    • Activities of daily living
    • Ability to live independently
    • Satisfaction
    • Improvements ranged from 10 to 37 percent.
  • MPK devices overall annual cost is $15,080. NMPK devices overall annual cost is $13,380, about $1,700 less.
  • However, MPK users show a reduction in direct and indirect health care costs per person per year of $4,500.

Study Conclusion

“It appears that the economic benefits of MPKs are comparable to those of total knee replacement and better than the implantable cardioverter defibrillator. Therefore, MPKs do provide good value for money from a societal perspective.”


Retrospective Cohort Study of the Economic Value of Orthotic and Prosthetic Services among Medicare Beneficiaries
[Dobson DaVanzo and Associates, 2013]

A second study supporting the business case was produced in 2013 by Dobson DaVanzo & Associates LLC of Vienna, VA. Commonly referred to as the Dobson-DaVanzo Cost Effectiveness Study, its complete name is “Retrospective Cohort Study of the Economic Value of Orthotic and Prosthetic Services among Medicare Beneficiaries.” One of the principals, Allen Dobson, PhD, was the former Research Director for the Medicare program.

This study is different from the RAND study in two important ways. First, the researchers studied the use of orthotic and prosthetic (O&P) devices for all lower limb cases. That is, it included patients with above knee and below knee amputations. The RAND study only examined above knee amputees (AKA). Secondly, they did not attempt to compare patients that received microprocessor knees (MPKs) to those only receiving mechanical knees (NMPKs).

The study was given unprecedented access, via special permission from Medicare, to have access to every Medicare payment for these patients over a 4-year period. This permitted the researchers to determine the actual cost history for medical care following their O&P intervention.

The researchers divided the patients into 2 groups, those that received an O&P device as part of their therapies and those that did not.

Study Results

The conclusion was that the cumulative Medicare costs over an 18-month period following receipt of a device were less than the population that did not receive any.

  • Cumulative cost comparison of the initial 12 months demonstrated that the cohort that received the prosthesis had only 1 percent higher costs compared to the population that did not receive any. In other words, the cost to Medicare was essentially the same.
  • The offsets to the initially higher cost were associated with patients benefitting from restorative health due to returning home and to their community. They avoided costly facility-based care.
  • The patients receiving a prosthesis experienced better quality of life and increased independence compared to patients who did not.
  • The researchers concluded that Medicare could experience a 10 percent savings for those receiving prosthetic devices (for lower limb amputees).
    • Patients are generally less bedbound
    • More independent
    • Have fewer emergency room admissions
    • Have fewer acute care hospital admissions
    • Experience a better quality of life
  • Patients that did not receive orthotic devices and remained mostly wheelchair bound tended to have further medical complications. This increased medical costs even further.
    • Complications of Obesity
    • Cardiac complications
    • Further deterioration of diabetes and vascular problems
    • Increase in back pain and other muscular skeleton complications requiring medical attention and medication

The Business Case for Proper Prosthetics

Other potential savings not addressed in the Dobson DaVanzo study that should also be considered in the business case:

  • When a patient receives a prosthetic device and exhibits greater independence, it frees up the primary caregiver to return to work.
    • This increases the household income avoiding dependence on Welfare.
    • Increased income means the household is able to pay their taxes
    • The Household is able to pay their private insurance premiums, avoiding a shift to Medicaid
    • Reduced stress on the primary caregiver translates into a healthier caregiver; one that is more likely to avoid their own medical decline or even death.
  • When a patient receives a prosthetic device he or she may well be able to return to employment
    • Household income increases further
    • He/ she can pay taxes—again
    • Quality of life for the prosthetic owner increases
    • The community at large enjoys both tangible and intangible benefits derived from the re-enabled individual overcoming their disability.