Nearly 5 million Americans have a hip replacement. A recent study, published in the Journal of the American Medical Association (JAMA), found that U.S. hospitals may be charging private insurers double the price of a typical hip replacement surgery costs.
Hip implants are the eighth most common surgical procedure in the U.S. Because they’re so common, the price increase has resulted in hundreds of millions in additional insurance claims.
Comparing Hip Replacement Surgery Costs
In 2017, researchers measured data to better understand why hip replacement surgery costs vary. Yi-Ju Tseng, Ph.D., and Kenneth Mandl, MD, MPH, of the Computational Health Informatics Program at Boston Children’s Hospital, looked at 40,372 patients with knee replacements and 23,570 patients with hip replacements.
The researchers compared costs from a private insurance plan from 2011 to 2015. They concluded that within that timeframe, insurance companies may have overpaid $225.3 million for knee implants and $199.7 million for hip implants.
The average selling price for the knee implants was $5,023, but insurance companies paid $10,604. For hip implants, the average selling price was $5,620 but insurance companies paid $11,751 for the same devices.
“The total payments insurance companies pay for knee and hip implants were twice as high as the average selling prices at which hospitals purchased the implants from manufacturers, resulting in hundreds of millions of dollars of additional insurance claims,” according to the study.
Why Hip Implant Prices Vary
No one entirely knows why this discrepancy exists. James Robinson, professor of health economics at the University of California, Berkeley, said prices may vary because hospitals negotiate with device manufacturers, and some may get better bulk pricing because more of their surgeons choose to use the same types of implants.
The most expensive part of any joint replacement surgery is the implant. Researchers found that insurance companies are kept in the dark about the brand of the implant device and how much the implants cost to the hospitals that are buying them.
Most prosthetic hips need a second replacement due to wear, with all-metal hips having the highest failure rate and the most toxic side effects, such as metal poisoning. Authors of the study recommended that at least the average cost of an implantation device should be widely available to the public.