Hospital prices for routine knee and hip replacement surgeries vary by tens of thousands of dollars in cities across California and nationwide, a new insurance industry report shows.
The Los Angeles and Long Beach market, for instance, had one of the biggest price variations in the country for a hip replacement. The hospital charges ranged from $17,260 to $46,448, according to claims data from the Blue Cross Blue Shield Assn.
The insurance group, which includes Blue Cross and Blue Shield plans in California and elsewhere in the U.S., analyzed healthcare providers’ prices in 64 markets across the U.S. Those insurers provide coverage for more than 100 million Americans.
These data don’t necessarily reflect what insurers actually paid, but charges can influence the ultimate cost for employers and consumers.
And increasingly, workers are bearing a bigger share of their medical costs as deductibles rise.
The 169% variation in cost for hip replacement surgery in the L.A. area was second only to the Boston area, which had a 313% disparity.
For knee replacement surgery, the price ranged from $20,869 to $33,924 in the L.A. and Long Beach market. Orange County showed a similar spread: $18,179 to $36,389.
But Fresno was a different story. Hospital charges for a knee replacement only varied by 1% with the price topping out at $19,724.
At times a short drive can separate some of the nation’s highest- and lowest-cost markets.
The average cost of a knee replacement was $41,042 in San Diego, the fifth-highest among the 64 markets studied. One of the lowest-priced markets was nearby Riverside-San Bernardino, at $24,543.
Federal officials recently began publishing the prices U.S. hospitals bill Medicare for the most common procedures and tests to put pressure on institutions to justify inflated charges that often have little or no correlation to the quality of care.
Large employers and health plans are trying a variety of strategies to help hold down medical costs and avoid these wild swings in prices.
The California Public Employees’ Retirement System implemented a “reference pricing” program that would only pay up to $30,000 for a knee or hip replacement procedure. The patient would be responsible for anything above that amount.
The program led many higher-priced hospitals to cut their prices to avoid losing business and some patients sought out lower-cost options, according to researchers.