Knee and hip surgeries offer a glimpse into disparities in health care costs

kneelady-300x222With so many older Americans entering their later years in better shape than earlier generations and wanting to stay active, knee and hip replacements have become some of the most common surgeries performed in pre-pandemic times. The cost of this work, however, varies greatly. And surgeons may be promoting procedural variants to not only build business but also to increase their revenue for these operations.

Consumers, policy makers, regulators, and politicians may want to keep an eye on developments with patients’ knees and hips as indicators of what may occur in health care finances, especially if hospitals’ case loads return to something of a pre-pandemic norm and because taxpayers bear burdens from so many of the Medicare-covered procedures.

New data is emerging about hospital costs as the institutions, many of them overwhelmed now by the coronavirus pandemic, comply with Trump Administration price-disclosure regulations. These called for hospitals to post online their base costs (as earlier described in the hard-to-read charge master lists) for hundreds of common procedures and medical items, as well as previously secret prices for same, as negotiated with insurers.

This information is going up slowly but researchers with the Peterson-Kaiser Family Foundation Health Tracker system have found enough data to report this about knee and hip replacements:

“Knee and hip replacements are common surgical procedures. The average price (allowed charge) of a joint replacement for knee or hip surgery in an in-network facility varies widely across the country. The price includes in-network room and board and allowed charges for the procedure but excludes any balanced billing that may occur if the providing clinicians were out-of-network. The average price in the New York metro area ($58,193) is more than double the average price in the Baltimore, Md., region ($23,170). The price of knee and hip replacements also varies within a region. The Baltimore region had the lowest average price for inpatient joint replacements and had relatively small variation within the region, possibly because inpatient hospital services are subject to the state’s all-payer rate setting system.”

The researchers found that, among hospitals reporting so far on their negotiated prices with insurers, the average price for knee and hip replacements in the Washington, D.C., area (including Arlington and Alexandria, Va.) was $33,909. That is less than what patients pay, say, in Fort Worth, Tex. ($47,948) or in the Tampa-St. Petersburg, Fla., area ($40,692) but more than in Los Angeles ($33,297) or Chicago ($30,470).

If patients may be scratching their heads as to the wide price spreads on a surgery that in normal times is performed hundreds of thousands of times each year across the country, well, an inadvertent answer was supplied by a New York Times “trend” story promoted in the paper’s Health section online. While the article purported to describe technology’s transformations of people’s lives, it also gives a gee-whiz and golly description of how surgeons not only use different implanted devices (knees and hips made of different kinds of materials) but also how they use robotic assistance in the OR.

Let’s give credit where it is due: Medical scientists and surgeons have made advances with hip and knee replacements, including with lighter, stronger, and more durable materials and with techniques that have enhanced the safety and effectiveness of the procedure — in which at least 14,000 cases each year also record complications.

Doctors and hospitals also have ensured that patients (and taxpayers) have footed the bill for changed care.

Research shows that hospitals themselves groan under the demands of surgeons to stock their choices of an array of expensive materials used in various procedures.

And while a spokesman for a medical device manufacturer told the New York Times that a robot, in knee and hip work, “executes the procedure with a level of accuracy and precision that we have never seen,” questions have abounded about many types of robotic surgeries.

Careful medical journals have built a growing body of research finding not only a dearth of evidence to support the booming business of robotic-assisted surgeries but also worries about under-reported harms from the procedures. News stories in big media outlets and blog posts have reported on risks and damages associated with the higher-cost machine-assisted operations. “The Bleeding Edge,” a Hollywood documentary, provided ringing alarms about not just robotic surgery but also the rapacious profiteering of the $400 billion medical device industry.

Surgical robots can cost hospitals $1 million per unit, not including the hundreds of thousands of dollars they must pay annually to makers for the devices’ upkeep. With many other procedures, hospitals tack on roughly $1,000 per surgery as the cost for the robotic work, research has found.

In my practice, I see not only the harms that patients suffer while seeking medical services, but also their struggles to access and afford safe, efficient, and excellent medical care. This has become an ordeal due to the soaring cost, complexity, and uncertainty of treatments and prescription medications, too many of which turn out to be dangerous drugs.

Federal officials have struggled for some time now, with Medicare, to determine what is a fair and appropriate cost for increasingly common knee and hip replacements, trying for example an approach called “bundling.”

Under this system, hospitals brought together all the parties involved — surgeons, anesthesiologists, and others — and got all concerned to agree to a fixed price for a surgery. Hospitals got a lump sum that they distributed to the parties involved. This also meant that patients got one bill with an agreed price, rather than getting bombarded with endless mailings from an array of providers and their insurer. Patient advocates also held out the hope that medical insiders — including hospital administrators — might be knowledgeable and experienced enough to restrain colleagues’ hype and profit-seeking, so as to settle on a more competitive bundled price.

With knee and hip procedures, the bundling experiment has enjoyed some success in holding costs, research shows.

We still have major work to do on bankrupting medical expenses, in getting costs transparent, comprehensible, and useful enough to benefit the most important parties in health care: patients. We need to research with rigor our health care providers, procedures, and the outcomes not only of medical interventions like surgeries — which always come with risks, as well as rewards — but also challenges of hospital stays for recovery and rehabilitation.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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