Question

Why are procedures, such as a cesarean section or knee replacement, vary in cost from one hospital/region to another (Getzen, 2013, Health Economics and Finance, Chapter 8)?

Answer 1

Today in the United States, the cost of surgery receives a lot of attention as health care spending reaches an all-time high. Health care transparency continues to be a focus as American consumers are now more conscious of their spending and insurance coverage. Patients are now more often responsible for some portion of their health care bill, so understanding their insurance plans and subsequent bills for treatment are important to know in order to calculate “out-of-pocket” expenses.

How much does a total joint replacement surgery cost?
A recent New York Times article compared the cost of a hip replacement in Brussels, Belgium to various cities in the United States. The cost in Brussels was $13,660 compared to US cities in a range between $30,000 and $112,000. Costs of surgical procedures performed in foreign countries are frequently compared to costs in the US, and it is important to interpret these cautiously. Regulations regarding standards of infection control, sterilization, medical malpractice and how people pay for health care can differ significantly from country to country. These factors can drastically impact surgical costs.

In the US, the cost of a total joint replacement surgery can be misunderstood as insurance companies only pay a portion of the amount billed. This can make it very difficult to identify and truly compare charges. Examining some of the common factors that influence cost including billing practices, implant prices, hospital charges, and costs for services after the hospital stay can help us understand these differences. Additionally, the cost of a surgery can vary significantly based on location. There are many reasons for this such as overhead costs, rent, and other costs specific the region like regulatory burdens, malpractice insurance and facility maintenance.

To Summarize

Many factors determine the cost of total joint replacement surgery in the U.S.

• People who undergo total joint replacement surgery are cared for by many highly trained healthcare workers before, during and after surgery.
• The cost of a surgery in the US can vary by location or region.
• Costs can be affected by different contractual agreements for implants, medications and other services.
• Costs can also vary based on the size or scope of the facility performing the procedure.
• Implant and rehabilitation costs can make up a significant portion of the cost of a procedure.