$11,000 or $126,000? Same surgery, different prices

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Posted: Tuesday, February 12, 2013 12:00 am

CHICAGO (AP) — Want to know how much a hip replacement will cost? Many hospitals won't be able to tell you, at least not right away — if at all. And if you shop around and find centers that can quote a price, the amounts could vary astronomically, a study found.

Routine hip replacement surgery on a healthy patient without insurance may cost as little as $11,000 — or up to nearly $126,000.

That's what researchers found after calling hospitals in every state, 122 hospitals in all, asking what a healthy 62-year-old woman would have to pay to get an artificial hip. Hospitals were told the made-up patient was the caller's grandmother, had no insurance but could afford to pay out of pocket — that's why knowing the cost information ahead of time was so important.

About 15 percent of hospitals did not provide any price estimate, even after a researcher called back as many as five times.

The researchers were able to obtain a complete price estimate including physician fees from close to half the hospitals. But in most cases, that took contacting the hospital and doctor separately.

“Our calls to hospitals were often greeted by uncertainty and confusion,” the researchers wrote. “We were frequently transferred between departments, asked to leave messages that were rarely returned, and told that prices could not be estimated without an office visit.”

Many hospitals “are just completely unprepared” for cost questions, said Jaime Rosenthal, a Washington University student who co-authored the report.

Most hospitals aren't intentionally hiding costs, they're just not used to patients asking. That's particularly true for patients with health insurance who “don't bother to ask because they know insurance will cover it,” said co-author Dr. Peter Cram, a researcher at the University of Iowa's medical school.

But he said that's likely to change as employers increasingly force workers to share more health care costs by paying higher copayments and deductibles, making patients more motivated to ask about costs.

The study was made public online Monday in JAMA Internal Medicine. A California study made public last year about surgery to remove an appendix found similar cost disparities.

Commenting on the study, American Hospital Association spokeswoman Marie Watteau said hospitals “have a uniform set of charges. Sharing meaningful information, however, is challenging because hospital care is unique and based on each individual patient's needs.”

She said states and local hospital associations are the best source for pricing data, and that many states already require or encourage hospitals to report pricing information and make that data available to the public.

U.S. insurance companies typically negotiate to pay less than the billing price. Insured patients' health plans determine what they pay, while uninsured patients may end up paying the full amount.

The study authors noted that Medicare and other large insurers frequently pay between $10,000 and $25,000 for hip replacement surgery.

Sean Toohey, a grains broker at the Chicago Board of Trade, had hip replacement surgery last summer at Loyola University Medical Center in Maywood, Ill. An old sports injury had worn out his left hip, causing “horrendous” pain on the job, where he's on his feet all day filling orders.

Toohey, 54, said his health insurance covered most of the costs, and it didn't occur to him to ask about price beforehand. He was back at work two weeks later and is pain-free. That's what matters most to him.

“I never really looked or paid attention” to the cost, he said.

He paid about $7,900 but wasn't sure what the total bill amounted to.

The average cost for hip replacement surgery at Loyola is about $42,000. The most expensive items on a typical hip replacement bill include about $11,000 for the hip implant, said Richard Kudia, Loyola's vice president of patient financial services

Kudia said some patients do ask in advance about costs of surgery and other medical procedures, and those questions require “a little bit of research” to come up with an average estimate. Costs vary from center to center because “there is no standard pricing among hospitals across the country. Each hospital develops its own pricing depending on its market,” he said.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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