Data shows costs for identical knee procedures can vary depending on which hospital is selected
It is well known that medical costs vary considerably from city to city and across regions. A new report highlights this disparity by showing the extreme variations across the nation and within the same market for the cost of knee and hip replacement surgeries — among the fastest growing medical treatments in the U.S. The report is from the Blue Cross Blue Shield Association (BCBSA), the national federation of the 37 independent Blue Cross and Blue Shield health insurance companies. The report, “A Study of Cost Variations for Knee and Hip Replacement Surgeries in the U.S.,” shows that the cost to the customer for identical procedures can vary fourfold depending on which hospital a patient chooses within a market.
The study shows the average cost for a total knee replacement procedure in Philadelphia was $30,564 which was approximately 2 percent lower than the national average of $31,124 in 64 markets where claims data was reviewed. The procedure ranged in price from $17,659 to $46,460 in Philadelphia hospitals — a 163 percent cost variation.
The average typical cost for a total hip replacement procedure in Philadelphia was $31,066, which is approximately 3 percent higher than the 64-city average of $30,124. The procedure ranged in price from $21,490 to $45,559 in Philadelphia hospitals — 112 percent cost variation. The report does not specifically analyze the correlation between cost and quality.
Knee and hip replacement procedures are among the fastest growing medical treatments in the U.S. A study published in the June 2014 issue of Journal of Bone and Joint Surgery, found that the number of typical knee replacements — those without medical complications — more than tripled and that typical hip replacements doubled between 1993 and 2009. In 2011 there were 645,062 typical hip replacements and 306,600 typical knee replacements performed in the U.S., according to a report from the American Academy of Orthopaedic Surgeons.
“Philadelphia is fortunate to have some of the best doctors and hospitals in the nation. We believe it is our responsibility to balance our customers’ need for access to these medical centers with their need to make health care affordable,” said Richard Snyder, M.D, Independence’s chief medical officer. “We are introducing innovations in care delivery and payment, in collaboration with willing partners, to do just that: to improve the health of the people and communities we serve while keeping access to health care within reach of the families in our communities.”
As consumers get more engaged in managing their own health care experience, Independence is helping them take charge of their care and coverage by giving them the tools they need to better understand both cost and quality of the services they are considering. For example, Independence’s Care Cost Estimator helps members make confident and educated decisions about who to see for their health care — from primary care physicians to specialists and hospitals. With more than 1,600 searchable health services, the Care Cost Estimator is part of a full suite of online health tools that help Independence members become thoughtful health care shoppers. Independence also supports the longstanding commitment to health care data transparency set forth by the Pennsylvania Health Care Quality Alliance, which is focused on improving the quality of patient health by endorsing statewide quality measurement standards and promoting the responsible public reporting of unbiased and ‘user-friendly’ health care information.
In addition, IBX Wire, a personalized, secure, and HIPAA-compliant channel launched in 2013, puts important health information at members’ fingertips via their smartphones. IBX Wire allows Independence to send messages to its members who have opted-in to the service, including reminders about health screenings, lower-cost drug options, and lower-cost alternatives to using the emergency room.
As the study shows, the hospital an individual selects has a direct impact on the total cost of a procedure and in some cases the actual cost to the patient. To help consumers identify high quality, affordable hospitals, Independence acknowledges local hospitals with its Blue Distinction® Centers+ designation, which recognizes medical centers that demonstrate expertise in delivering high quality patient care safely and effectively, and are also 20 percent or more cost-efficient than non-designated facilities. Nationally there are 427 Blue Distinction® Centers+ for Knee and Hip Replacement, including 10 in the Philadelphia region. These include Abington Memorial Hospital, Albert Einstein Hospital at Elkins Park, Doylestown Hospital, Holy Redeemer Hospital & Medical Center, Nazareth Hospital, Pennsylvania Hospital of the University of Pennsylvania, Pottstown Memorial Medical Center, Presbyterian Medical Center of the University of Pennsylvania, Riddle Memorial Hospital and St. Mary’s Medical Center.
The Health of America Report, a collaboration between the BCBSA and Blue Health Intelligence (BHI) utilizes a market-leading medical claims database to uncover key trends and provide insight into healthcare dynamics. Studying medical claims data — stripped of any information that could identify a patient — can help draw important insights about healthcare costs and quality and improve decision making for consumers, employers and healthcare industry leaders.
About Independence Blue Cross
Independence Blue Cross is the leading health insurance organization in southeastern Pennsylvania. With our affiliates, we serve 9.6 million people in 25 states and the District of Columbia, including 2.5 million in the region. For more than 75 years, we have been enhancing the health and wellness of the people and communities we serve by delivering innovative and competitively priced health care products and services; pioneering new ways to reward doctors, hospitals, and other health care professionals for coordinated, quality care; and supporting programs and events that promote wellness. To learn more about how we’re changing the game, visit www.ibx.com. Connect with us on Facebook at ibx.com/facebook and on Twitter at @ibx. Independence Blue Cross is an independent licensee of the Blue Cross and Blue Shield Association.
Independence Blue Cross