Two years ago, the Washington Post wrote about a college student who called 102 hospitals for a research paper on the cost of a hip replacement. Only 10% produced the information and the prices ranged from $11,000 to $125,000.
“I learned a lot about the health care system and the need for pricing transparency, which I never really considered,” Jaime Rosenthal said at the time, after scrounging for data not publicly available.
Transparency is still not widely considered and the price variation apparently hasn’t changed much. The BlueCross BlueShield Association published a study (pdf) last week of hip and knee replacements in 64 health care markets across the country and, because they’re a giant insurance concern, they could gather information more easily than a college student.
But they found the same gaping price differential, and nowhere was it more pronounced than California. Only the Boston area had a wider disparity in pricing for hip replacement surgery than the L.A.–Long Beach area. The average quoted price in both markets was around $26,500, but Boston ranged between $17,910 and $73,987 while L.A. was $17,260 to $46,447. These quotes don’t include insurance or price negotiations, so they aren’t actual costs.
L.A.’s differential was 169%, followed in California by San Diego (100%), Orange County (46%), Riverside-San Bernardino (23%) and Fresno (8%). Although the study included hospitals that treat 100 million people, it did not include the Bay Area.
The average cost nationally for hip surgery was $30,124. Birmingham, Alabama, offered the cheapest price, $11,327, about 15% of Boston’s quote. All the California markets, except San Diego ($34,236), were below the national average.
California fared much better in cost variation for knee replacement surgery. The Dallas differential was the nation’s worst, at 267%. Orange County was the worst in California (100%), followed by L.A.-Long Beach (63%), Riverside-San Bernardino (24%), San Diego (15%) and Fresno (1%).
The differentials are high and transparency is still low, and that’s before trying to figure in the know unknowns, like insurance. Factor in confusion about which doctors and hospitals are in Covered California networks, and disagreements between insurance carriers and providers over coverage and payment, and it’s clear that there is some way to go before patients will have easy access to true cost information on hip and knee surgery.