Joint Replacement Surgery Costs Vary Greatly Between Hospitals: Report

Joint Replacement Surgery Costs

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Total knee arthroplasty (TKA) and total hip arthroplasty (THA) are two of the most common knee replacement procedures. According to a report, in 2011, US surgeons carried out about 645,000 TKAs and 306,000 THAs, not including revisions. In 2015, the expectation was more than 925,000 TKAs and 378,000 THAs. As the population in the United States ages, experts think that the need for TKA and THA will skyrocket. Primary TKAs in the United States expect to reach almost 1.4 million by 2020. On the other hand, the number of THAs expect to top 510,000. Blue Cross Blue Shield (BCBS) and its independent licensee, Blue Health Intelligence (BHI), looked at BCBS claims data to see how the costs of TKAs and THAs vary across the country.

Study Summary

Researchers from BCBS and BHI looked at three years of claims data for BCBS health insurance customers who had a TKA or a hip replacement. They found that people 18 to 65 years old had a typical TKA or hip replacement. However, these claims do not include people who had Medicare or a condition like cancer or HIV.

For each of 64 BCBS markets, the study looked at the average cost of a total hip or knee replacement. In fact, it included almost every state in the United States. It considered all claims from the main surgery and claims for presurgical and postsurgical care. In addition, BCBS-BHI looked at the costs in different markets and the same market.

The average cost of a TKA was $31,124, and the average cost of a THA was $30,124. However, prices were very different between different markets. A TKA cost $11,317 in Montgomery, Alabama, while a THA cost $11,277 in Birmingham, Alabama. 

Most Expensive Market for Joint Replacement 

On average, New York was the most expensive place to get a TKA or THA. The average cost of a TKA was $61,266, and the average cost of a THA was $59,448. 

Moreover, the least expensive places to get both procedures are Montgomery, Alabama. The cost of a TKA there was $16,097, and the cost of a THA was $16,399.

The study found that prices could vary even in the same market. For example, there was a 267 percent difference in price between the least expensive TKA and the most expensive THA in the Dallas, Texas, market. In the Boston-Worcester, Massachusetts, market, there was a 313 percent difference in price between the least expensive THA and the most expensive THA.

On the other hand, some markets had prices that were about the same between different facilities. In the Fort Collins-Loveland, Colorado market, the difference between the least and most expensive TKA was only.3%. In the Wilmington-Newark, Delaware, market, the difference between the least and most expensive THA was only 1.7%.

The report said that when prices are always high, “the lack of cost variation in a market can hurt consumers.”

The study did not look into why the prices for joint replacements in different parts of the country were different, whether there was a link between cost and quality, and which aspect of the procedure (the price of the implant, the costs of the facility, or the costs of the surgery) was more likely to drive the cost differences. 

Viewpoint

An orthopedic surgeon in California who specializes in total joint replacement, Thomas C. Barber, MD, the chairman of the American Academy of Orthopedic Surgeons (AAOS) Council on Advocacy, gave his thoughts on the study:

“The most crucial thing we all need to grasp is price.” In this case, Blue Cross looks at how much it costs them, not how much it costs the hospital. Most of what they are measuring is how well their contracts with hospitals and doctors work, not how much it costs them. According to the medical group’s market power and contracting skills, the price for physician services could go up or down 30%. This is a crucial point to make.

Hospital services are even more different when it comes to contracting. This is because the hospital is part of a larger group of hospitals or in an area with few other hospitals. Also, many insurance companies pay for hospital stays in this way. It means that a day in the hospital for a mental illness can be paid for the same as one for a total hip replacement. This is because many hospital contracts are in this format. As a result, it is hard to figure out how much it will cost to care for someone with a total hip replacement. The cost of psychiatric care is very different from knee replacement surgery cost in India.”