Difficulty of Getting a Price for Hip Replacement Illustrate Fallacy of Conservative Policy for Health Care Consumers Driving Health Care Costs

Need a Hip Replacement and Want to Know the Cost – Good Damn Luck

A fundamental concept in conservative proposals for health care reform is that the consumer should be empowered to use the marketplace to drive costs down and quality up.  This is, of course, preposterous.  Health care is so complex that even the most educated and knowledgeable consumer cannot make rational choices.

Don’t believe it?  Well a researcher at Washington University, Jaime Rosenthal set out to find out the cost of a hip replacement for her fictitious grandmother.  She failed miserably.  Here’s how she and her co-authors tried.

We randomly selected 2 hospitals from each state (plus Washington, DC) that perform THA, as well as the 20 top-ranked orthopedic hospitals according to US News and World Report rankings. We contacted each hospital by telephone between May 2011 and July 2012. Using a standardized script, we requested from each hospital the lowest complete “bundled price” (hospital plus physician fees) for an elective THA that was required by one of the author's 62-year-old grandmother. In our scenario, the grandmother did not have insurance but had the means to pay out of pocket. We explained that we were seeking the lowest complete price for the procedure. 

And here is the result of those efforts.

The results of this study provide insight into the availability of pricing information for a common elective medical procedure, THA. We found that only 16% of a randomly selected group of US hospitals were able to provide a complete bundled price, though an additional 47% of hospitals could provide a complete price when hospitals and health care providers were contacted separately. Obtaining pricing information was difficult and frequently required multiple conversations with numerous staff members at each hospital as well as affiliated physician offices. Finally, we found that price estimates varied nearly 10-fold across hospitals, which is surprising considering that all hospitals were provided with standardized information about the procedure being requested. In aggregate, our results highlight the difficulty that consumers may have in obtaining price estimates for common medical procedures, but also that comparison shopping might yield significant price savings for savvy consumers.

That’s right.  Finding out pricing info was very difficult, and the idea that prices could vary 10 fold suggests that some providers were not providing complete information.  But yes, it is possible for consumers to shop and save money, as long as they have a high degree of knowledge, a large amount of time (over a year for this study) and an advanced degree like the authors of this study. 

Well, that’s okay, doesn’t everyone fit that description.  Well, they do in the fantasy world that Conservatives live in.