Opaque procedure pricing barrier to healthcare reforms

Published on February 15, 2013 at 9:15 AM · No Comments

By Liam Davenport, medwireNews Reporter

US investigators report great difficulty in obtaining price information for total hip arthroplasty (THA) from healthcare providers, with many institutions and physicians unable to provide reasonable price estimates.

Furthermore, prices quoted for this common, elective procedure varied substantially between the 122 institutions approached by the study authors.

They say that difficulties in obtaining quotes could obstruct patients from finding the best price for their surgery - something which they could be incentivized to do under proposed US healthcare reforms.

Jaime Rosenthal, from University of Iowa Carver College of Medicine, in Iowa City, and colleagues say that their findings are "somewhat remarkable considering the support expressed by virtually all stakeholders for pricing transparency."

The team randomly selected two hospitals from each US state and Washington DC that perform THA and the 20 top-ranked orthopedic hospitals according to US News and World Report. They contacted each institution using a standardized script to obtain a bundled price of hospital and physician fees for an elective THA in a 62-year-old woman without insurance.

The authors were able to obtain a complete price estimate from 12 (60%) top-ranked hospitals, with nine of these able to provide a bundled price. In three cases, the complete price could only be obtained after contacting the hospital and physician separately. A partial price could be obtained from five hospitals for either the hospital or physician fees, and three hospitals could not provide any information.

The picture was similar for the non-top-ranked hospitals, with a complete price obtained from 64 (63%) institutions. Ten (10%) hospitals provided a bundled price and 54 (53%) required separate calls to the hospital and physician. Twenty-two could provide partial fees, and 16 provided no prices at all.

There was a wide range of complete prices, at US$ 12,500-105,000 (€ 9368-76,692) and a mean of US$ 53,140 (€ 39,826) in top-ranked hospitals, and US$ 11,100-125,798 (€ 8319-92,480) and a mean of US$ 41,666 (€ 31,227) in non-top-ranked hospitals.

"The nearly $100,000 [€ 74,946] range in pricing that we encountered suggests that a savvy and determined customer may find opportunities for significant savings with comparison shopping," say Rosenthal and colleagues.

"Alternatively, it is equally possible to argue that our results suggest that less-educated or less-savvy patients could pay exorbitantly high prices."

In an accompanying editorial in JAMA Internal Medicine, Andrew Steinmetz and Ezekiel Emanuel, from the University of Pennsylvania, in Philadelphia, USA, say that patient choice is not just about price: "There is no justification for the inability to report a fee estimate, or a 12-fold price variation for a common elective procedure like a hip replacement.

"But unfortunately, this is only half the problem. The little price information that we do have is of almost no value when it is not accompanied by rigorous data to measure quality - data like postoperative mortality, infection rates and six-month redo rates."

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