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The Cost of Knee Replacement Surgery

Report underlines varying knee replacement costs in California

A new report by California Public Interest Research Group (CALPIRG) emphasizes the variation in healthcare costs across the state, including the cost of knee replacement surgery.

The prices charged for surgery in California vary from one geographic region to another. We analyzed hospital charge information provided in the California Common Surgery Cost Comparison database—a record of the prices charged for common, elective, inpatient surgeries performed at hospitals across the state—and created a charge index that can be used to compare charges for the 12 most common surgeries, such as Cesarean births, knee replacements and angioplasty. Though the database includes information on how much hospitals charged, not on how much they were ultimately paid, the observed variation in prices suggests important differences in surgery pricing.

The report observes that knee replacement costs in California were among the most variable, with prices ranging as high as $164,000:

“The typical knee replacement surgery performed in a Fresno-area hospital in 2010 was charged at $46,800, versus $127,500 in an Alameda-region hospital,” the report says, while “in the Alameda County area, which has high surgery charges,” prices “ranged from $59,800 at Alameda County Medical Center—Highland Campus to $164,400 at Washington Hospital—Fremont.”

As prices continue to rise and the gulf between different healthcare centers continues to widen, the report concludes that there are a number of avenues to help curb this trend:

  • California needs better information about the reasons for charge variation. Several of the possible explanations identified in this report are worth further study to reveal the extent to which they affect prices and might be addressed to help control costs.
  • Building upon the best practices of regions with lower charges could help lower charges in high-cost regions. Learning more about the reasons for charge discrepancies would enable hospitals and networks of health care providers to improve their practices, providing quality care at reasonable cost.
  • Patients need information on the quality of care provided by different hospitals to help ensure the best outcomes. Reliable information about hospital quality will avoid a situation where patients use price as a proxy for quality and gravitate toward hospitals that charge more.
  • Better transparency of hospital discounts and accepted payments would improve patients’ ability to choose a facility based on price and would allow researchers and policymakers to better understand how California might control the cost of providing quality health care.

Lack of transparency in healthcare prices in the United States continues to plague the system, while other countries surge ahead in healthcare cost transparency. Knee replacement prices in many countries are publicly available for patients to consider prior to undergoing care.

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