Blue Cross and Blue Shield released a report on Wednesday called, A Study of Cost Variation for Knee and Hip Replacement Surgeries in the U.S. The report is a collaboration between Blue Cross and Blue Shield Association (BCBSA) and Blue Health Intelligence (BHI).
The report analyzed three years of independent Blue Cross and Blue Shield (BCBS) companies’ claims data for typical knee and hip replacement surgeries to further assess cost variations across the US.
According to the findings in the report, some hospitals across the US charge tens of thousands of dollars more than others for the same medical procedures, even within the same metropolitan market.
BCBS examined markets across the country, and found that their costs can vary as much as 313%, depending on where the surgeries were performed. Knee and hip surgeries are the fastest growing medical treatments in the US, according to the report.
The report cites a study in the June 2014 issue of Journal of Bone and Joint Surgery, that stated that typical knee replacements more than tripled and that typical hip replacements doubled between 1993 and 2009.
A report from the American Academy of Orthopedic Surgeons found that in 2011, there were 645,062 typical hip replacements and 306,000 typical knee replacements.
The report contains three figures and two maps that highlight the cost variations. Figure 1 shows the cost variation for knee replacement. Figure 2 shows the cost variation for hip replacement, and Figure 3 shows the highest and lowest average cost markets and variance cost markets for knee and hip replacement.
In the 64 markets that were studied, the average typical cost for a total knee replacement was $31,124. The lowest cost was in Montgomery, Alabama, and the highest cost was $69,654 in New York City (where else but my hometown?) Within a single market, the cost variance was between $16,772 and $61,585, a 267% variation, in Dallas.
The average typical cost for a total hip replacement was $30,124. Naturally, the lowest cost for hip replacement was again in Alabama, only this time in Birmingham. The highest cost was in Boston, as much as $73,987. Boston also had the greatest cost variation within a single market, as low as $17,910, or a 313% variation.
For knee replacements, the largest markets had cost variations greater than $18,701, and for hip replacements, the largest markets had cost variations greater than $17,301.
This report is by no means the first, nor will it be the last study of its kind to example cost variation between and within markets. While in school for my MHA degree, I learned of a previous study that found similar variations in cost, albeit for other types of procedures.
But what sticks out in this report is the fact that some of the markets that had the highest cost variations, for example, Texas and Oklahoma, are opt-out states as far as workers’ compensation is concerned, and that another state, Tennessee, has been targeted as the next state by an organization called AWARC. In fact, it was reported today that a state legislator will sponsor opt-out legislation.
So tell me again why implementing medical tourism, with the lower cost and better quality outcomes available in the US, is a bad idea? As this report shows, cost variation for the two most common surgeries in both health care and workers’ comp is so expensive in certain markets across the country, and within a market, that an alternative to the high cost of surgery will need to be found.
And while we are on the subject of bad ideas, do those who think like that really believe that workers’ comp patients would be sent to places in other countries where the medical facilities are sub-standard, or even primitive? Of course not, but then again, if you want cheap surgery, I hear Alabama is pretty reasonable. But do you really want to go to Alabama for surgery, when you can recuperate near a beach and in beautiful weather? I don’t think so.