The prices that health insurers agree to pay for joint replacement surgery vary widely and are unrelated to conventional measures of the quality of care.
That's the conclusion of a new study that found who is footing the bill is the biggest influence on the price tag.
Total joint replacements (TJR) — especially of knees and hips — are the most common in-hospital surgeries for U.S. patients over 65.
With numbers forecast to increase, these surgeries are a big driver of rising health care costs, according to a team led by Dr. Robin Kamal, of the VOICES Health Policy Research Center at Stanford University.
For the study, he and his team analyzed publicly available data from 18 hospitals in one California health system, classifying negotiated prices for TJR by type of payer. These groupings were commercial in-network; commercial out-of-network; Medicare Advantage; Medicaid; and discounted cash pay.
"We found that the differences in negotiated prices across the five surveyed payer types for the same [TJR] procedures varied by nearly $60,000," researchers said.
Regardless of quality measures, Medicaid paid the least, while private insurers paid the most.
Medicare Advantage and Medicaid insurance plans had the lowest negotiated prices. Out-of-network care covered by commercial insurance plans had the highest prices.
The average price for commercial out-of-network surgeries was $78,800, compared to $63,900 for commercial in-network. For discounted cash, the price was $52,200. Medicare Advantage and Medicaid managed care were almost identical at $20,400 and $20,300.
Researchers found no correlation between the average negotiated price and any of four measures of the quality. Those measures included complication rates, the need for hospital readmission after surgery, patients' ratings of their care and overall hospital performance score.
When all payer types were aggregated into a single average negotiated price by hospital, researchers found no link between price and quality measures.
They said patients need access to price and quality information that's linked together.
They proposed that surgeons determine appropriate measures of TJR quality, combine them with price information, and then present results in brochures and charts to better inform patients.
"Other strategies for reporting care quality and price include surgeon scorecards and institutional value dashboards [online reports at hospital websites], which have been piloted in orthopaedic surgery with promising results," the authors said. "Hospitals should combine them with price information and present the results transparently to help patients make more informed choices about surgery."
The findings were recently published in Clinical Orthopaedics and Related Research, a publication of the Association of Bone and Joint Surgeons.
The American Academy of Orthopaedic Surgeons has more on total joint replacement.
SOURCE: Wolters Kluwer Health: Lippincott, news release, Dec. 14, 2022