Patients often have questions surrounding the cost of a joint replacement procedure, whether they have insurance or are paying entirely out-of-pocket. This is not surprising, as those costs can vary drastically depending on the surgeon and the facility they use. Often, patients don’t know the cost upfront until they get the bill.
Dr. Andrew Wickline is one of the few surgeons offering upfront pricing for hip and knee replacements for patients who wish to pay for surgery out of pocket, with or without the use of insurance. Here he answers some common questions on why surgery costs vary so much, how he is able to offer upfront pricing, and how patients can benefit from self-pay hip and knee replacement.
Q: Why do surgical costs vary so much in the United States?
Dr. Wickline: Large healthcare systems frequently have significant market leverage and are able to negotiate significant increases in procedural reimbursement in some communities. These negotiated prices have been kept secret, making it difficult to navigate because the pricing is often not easily accessible to patients upfront. Certain services, like dialysis, for example, are considered “loss leaders” for many hospitals—i.e., they are not profitable. When pricing is not publicly available, it is easier for hospitals to “mark up” the costs of other procedures, like joint replacement, to make up for areas that are less profitable. What is needed is the cost to perform the procedure with everything included plus a fair profit, displayed on an easy to read website.
Insurance companies play an integral part in surgical costs. Commercial insurance companies exist to make a profit and answer to shareholders–NOT to help patients. As such, it is in their interest to make sure that each quarter sees improved revenue for the insurer. How is this done? Delay or refuse treatment with tools such as copays, authorization, and biased committees that create rule structures for physicians and hospitals to jump through. Unfortunately, since patients don’t get to choose their insurance plan, many commercial payers are able to get away with poor customer service and unnecessary administrative burden. The patients can complain to their employer HR personnel, but that generally gets them nowhere. When there is a greater variety of insurance options in a particular area, hospitals can negotiate more competitive reimbursement rates with insurance companies, as opposed to areas where there are fewer options. This can lead to more competition and better patient satisfaction. Either way, the surgeon typically has no say in the surgical fees, despite the fact that the patient presents looking for a service from a physician. The reason costs vary so much is directly due to how hospital systems and payors look to drive costs and reap greater profit.
Patients also play a role in cost variability. Employers routinely provide healthcare benefits, and the patient is disconnected from the process. This discourages patients, in some instances, to shop for best quality and value and frequently request unnecessary testing that ultimately increases healthcare costs.
Lastly, surgeons have some blame as well. Many surgeons have given up on private practice due to the ever increasing administrative burden. Once surgeons become self-employed, there is little incentive to find ways to decrease cost. Surgeons are the ones that generally pick the implant brand (a large cost driver) and dictate a specific protocol during and after surgery. This DIRECTLY affects costs.
Q: Why is it so difficult for patients to get an upfront cost for surgery?
Dr. Wickline: One major factor is that hospitals and commercial payers typically have non-disclosure agreements, so they can’t publicly say what they are being paid for a procedure. In cases where insurance is not involved, hospitals are still hesitant to talk about their pricing because it is egregious in some cases. There are several factors that go into the cost of a surgical procedure, but I believe in charging patients a price that is fair, not exorbitant.
The federal government has recently created a mandate that all hospitals must disclose their pricing for certain procedures or face penalties.
Q: Why are the costs for a joint replacement procedure so high? What factors contribute to those costs?
Dr. Wickline: When a patient has a surgical procedure like a hip or knee replacement, there are several factors make up the cost:
- Hospital or facility fee
- Anesthesia and the anesthesiologist’s fee, which may include special blocks
- Surgeon and surgical assistant fees
- The joint replacement implant
- Fees associated with in-facility therapy and any special devices that may be needed
- Patient-specific variables, such as abnormal anatomy/previous surgery or hardware
Additionally, many patients do not take into account the costs associated with surgery, including:
- Many surgeons require patients go to physical therapy after replacement
- If you must go to therapy, generally someone must drive you and potentially lose time at work
- How long recovery takes depending on the post-op protocol which may mean that the patient will be out of work longer
All of these costs add up. According to data published by Blue Cross Blue Shield in Jan. 2019, the average price for an inpatient knee replacement is $30,249, compared to $19,002 in an outpatient setting. The average price for an inpatient hip replacement is $30,685, compared to $22,078 in an outpatient setting. This does not include the surgeon, surgical assistant, or anesthesia fee. Our fee for total knee is $17,800 and for total hip, $16,900 which includes the facility fee, the surgeon and assistant fee, and the anesthesia fee.
Q: How have you been able to set upfront costs for hip and knee replacements for your patients?
Dr. Wickline: For self-pay or cash-pay procedures, I have a lot more control over setting rates that ensure the involved providers are paid fair rates, but that are not exorbitant to patients. When insurance is involved, they play a role in what we can and cannot offer to a patient in terms of treatment options, based on what they will cover.
For self-pay patients, we are able to offer set costs based on facility fees, surgical fees, anesthesia fees, and the cost of top-class implants. My fees also include iovera° treatment for total knee replacements, which helps manage post-surgical pain with less need for risky narcotic medications. Patients also receive my therapy-free protocols, which allows the majority to avoid expensive physical therapy costs.
Q: How can patients benefit from self-pay surgery?
Dr. Wickline: Patients can benefit from self-pay surgery by having the freedom to choose the surgeon they want, rather than the surgeon that their insurance will cover. Patients can opt for a surgeon based on their experience and track record. I often talk to patients that want me to do their joint replacements because:
- My team has one of the lowest nationwide complication rates.
- We have published the lowest need for opioids after joint replacement in the nation.
- I have one of the lowest total costs for the 90 day period after surgery.
- 85% of my knees and 95% of my hips need no formal therapy after surgery (again lowering costs and aggravation for patients).
- Our protocol gives patients the opportunity to achieve range of motion milestones up to 7 weeks faster than what is conventionally expected.
When I am not covered by their insurance, cash pay is the only option. For these patients, the out-of-pocket cost may be worth it because the surgeon’s experience and low complication rates are important to them. Frequently, due to the low cost and upfront pricing, patients are able to convince their plan to use our services because the plan sees savings as well.
Additionally, self-pay patients benefit because I am able to make recommendations based on what I feel is best for the patient. Narcotics may be cheaper for post-surgical pain, but they are highly addictive and there are better and safer ways of managing that pain. With cash-pay patients, I am able to offer more options for recovery, like iovera° and therapy-free protocols, which may ultimately save the patient money in the long run while giving them a better experience in recovery and less addiction risk.
Every surgery has a cost; my goal is to provide patients with hip and knee replacement costs that are fair, and that includes the services that I truly feel will give them the best possible outcomes.
*Editorial note: Some examples showing ranges of pricing.