Surgery Costs – They Vary Wildly

Knee

Surgery costs vary wildly — even in same area Depending on where you live, a new knee could cost $11K-$70K

Jayne O’Donnell and Laura Ungar USA TODAY

And we have the best health care system in the world???

The cost of having a knee or hip replaced can be up to four times more in one place than another — even in the same area, a report out today found.

A total knee replacement averaged about $31,000 in 64 markets where Blue Cross Blue Shield analyzed its claims data. But in Dallas, it ranged from $16,772 to $61,584.86.

Across the USA, knee replacements cost as little as $11,317 in Montgomery, Ala., and as much as $69,654 in New York City.

Some of the price differences are expected — rent and other overhead costs are much higher in New York City than in Alabama. But the reasons why hip replacement in Fort Collins, Colo., costs tens of thousands more than in Pittsburgh may have more to do with whatever the market will bear.

The price hospitals charge is often discussed, but the new report is the first time BCBS (Blue Cross/Blue Shield) has disclosed the prices after it negotiates with hospitals and doctors. In May 2013, the federal government released Medicare data showing hospitals nationally charge wildly varying amounts for common major medical care.

Spiraling health care costs, higher insurance plan deductibles and increased cost-sharing have made procedure prices more important than ever to consumers. Insurers are likely tired of paying ever-higher prices for treatments they say shouldn’t change so much year to year — and certainly not hospital to hospital in the same region.

Deductibles were up nearly 50% from 2009 to 2014, increasing from an average of $826 to $1,217, a Kaiser Family Foundation report said last fall. It’s not unusual now, however, for people with employer-paid or individual insurance through the new Affordable Care Act exchanges to have deductibles of $5,000 or even $10,000. Many often have to pay 20% to 30% of the price.

In May, UnitedHealthcare, Humana, Aetna and Assurant Health agreed to provide cost data to the Health Care Cost Institute, which plans to release the aggregate data publicly in late February.

Health care pricing is “all driven by the reimbursement system,” namely insurance companies and government Medicare and Medicaid, says Rick Louie, managing director of Hospital Pricing Specialists, a Silicon Valley hospital price data firm.

Knee and hip replacements are among the fastest-growing medical treatments in the U.S.
Prices for lower-cost procedures, such as colonoscopies, would resonate more for consumers, says health care economist Mark Pauly.

Some employer-provided plans reward workers for going to certain doctors and hospitals that have higher quality and lower prices, a practice BCBS supports. Maureen Sullivan, BCBS’ senior vice president of strategic services, says the company has found there is “not a direct correlation” between quality of care and cost.