One million Americans are expected to receive hip and knee replacements in 2013. At an average price tag of $52,063, these procedures are anything but affordable. Medicare negotiates significantly reduced rates with hospitals, but these procedures still cost the government roughly $6B each year.
NerdWallet Health built a Best Hospitals tool to help patients investigate the cost of hospital care in their local areas. Using the tool, we studied the ten most and least expensive hospitals for hip and knee replacements. We asked the following questions:
1) What are the prices and expected quality of the top 10 most and least expensive hospitals for hip and knee replacement?
To determine prices, we looked at 2011 Medicare data for the amount billed by the hospitals and how much Medicare pays.
To predict quality, we relied on a recent study of 2750 hospitals offering hip and knee surgery. We found hospitals performing more than 200 hip and knee replacement surgeries a year have lower rates of infections, heart attacks, serious complications like blood clots and pneumonia, and death – we call this metric the “200 Quality Benchmark”. Government data reveals how many Medicare beneficiaries are treated annually at each hospital.
2) Do high hospital prices unfairly affect needy populations, like the poor or elderly?
We looked to the U.S. Census Bureau State & County QuickFacts for median household income, percent of population below poverty level and percent of population over age 65.
3) What are the operating characteristics of the most and least expensive hospitals?
We looked for trends in hospital attributes like number of beds, U.S. News rankings, management structure, and funding sources. We also studied individual hospitals via details published on their own websites.
Top 10 most expensive hospitals for knee and hip replacement and reattachment surgery
1. Monterey Park Hospital, Monterey Park, CA: Average Price $223,373
This partnership-operated, small hospital treated only 15 Medicare patients with hip and knee replacement in 2011. This hospital serves a population that is both predominantly Asian (66.9%) and older than average—19.3% of Monterey Park residents are over the age of 65, compared to the 13.7% nationwide average. Despite skyhigh costs and low levels of patients treated, Medicare pays Monterey Park Hospital 150% of the average national reimbursement for these procedures.
2. Centinela Hospital Medical Center, Inglewood, CA: Average Price $220,881
Centinela Hospital Medical Center is a privately owned corporation and was named a 2013 Truven Health Analytics Top 100 Hospital. Inglewood, CA, is a city in Southwestern Los Angeles County with high percentages of Latino and Black residents and a lower than average percentage of senior citizens.
3. Our Lady of Lourdes Medical Center, Camden, NJ: Average Price $202,777
This not-for-profit teaching hospital is sponsored by Catholic Health East, a multi-institutional health system that is funded by seven religious congregations. Our Lady of Lourdes serves a community of only 7.6% individuals over 65. Median household income in Camden is about half of the nationwide average, and the percentage of Camden residents below the poverty level is almost three times the national average.
4. University of California Davis Medical Center, Davis, CA: Average Price $185,506
This state-funded teaching hospital, which prides itself on being “a leading West Coast center for orthopaedic care,” has a relatively high Medicare reimbursement for hip and knee replacements, as is it paid about 80% above the national average. The UC Davis Medical Center is ranked by U.S. News as High Performing in Orthopedics, and features an ‘Adult Reconstructive Service’ that serves joint replacement patients.
5. Lourdes Medical Center of Burlington Country, Willingboro, NJ: Average Price $177,168
Lourdes Medical Center, like Our Lady of Lourdes Medical Center (number three on this list), is sponsored by Catholic Health East and also receives lower reimbursements from Medicare. In 2001, the hospital opened a long-awaited $20 million same-day surgery center. Unlike its sister hospital, this hospital is located in a relatively well-off area, with a median household income of about 150% of the nationwide average and a poverty rate about three times less than the national average.
6. Hahnemann University Hospital, Philadelphia, PA: Average Price $173,874
This corporately owned teaching hospital is ranked by U.S. News as High Performing in Orthopedics. The ‘University Orthopaedic Institute’ “specializes in early recognition of implant failures and revisions to previous joint replacements”, and prides itself on using the latest materials and being skilled in even the most complicated joint replacements. Hahnemann serves Philadelphia, where the median household income is about 30% below average, putting approximately 1 in 4 residents below poverty level.
7. Temple University Hospital, Philadelphia, PA: Average Price $172,393
This not-for-profit teaching hospital is also ranked by U.S. News as High Performing in Orthopedics. ‘Temple Orthopaedics & Sports Medicine’ offers the latest treatments in joint replacement and is part of a relatively large (728 bed) hospital. Despite its large size, this hospital only discharged 48 Medicare patients for hip and knee replacements in 2011.
8. University of California Irvine Medical Center, Orange, CA: Average Price $172,023
Yet another that ranks as High Performing in Orthopedics by U.S. News, this state-funded teaching hospital has only one hip and knee surgeon and treated only 11 patients for major joint replacements 2011. Despite being below from NerdWallet Health’s 200 Quality Benchmark, UC Irvine was reimbursed twice the nationwide average for these procedures. This hospital serves a more wealthy population, with a median household income of about 150% of the nationwide average.
9. Regional Medical Center of San Jose, San Jose, CA: Average Price $170,730
This partnership-owned medical center boasts a comprehensive ‘Orthopedics & Joint Replacement’ program. In October 2005, $160-million was spent on an expansion effort that included adding new hospital facilities. Of the Top 10, Regional Medical Center serves the highest earning population, with a median household income of $80,764. It is also well paid by Medicare (72% above average reimbursement).
10. Regional Hospital of Jackson, Jackson, TN: Average Price $161,699
The Regional Hospital of Jackson is a corporate-owned partnership that proudly includes physicians as owners. It charges more for a “unique patient experience”, which includes the “latest surgical techniques, a dedicated orthopaedic coordinator, 18 newly remodeled private suites, and flat-screen TVs and wireless Internet.” The second smallest hospital in the Top 10, it receives close to the average Medicare reimbursement. This hospital serves Jackson, TN, where slightly less than 1 in 4 people is below poverty level.
Hip and knee replacements are common surgical procedures offered by thousands of US hospitals. Prices vary widely among the 2750 hospitals included in our study. Vice President of Health Christina LaMontagne says, “on average, the top ten most expensive hospitals charged nearly 12 times more than the ten least expensive hospitals.” Patients can use free tools to learn more about the costs of hospitals in their local areas. “There is no doubt that California is the most expensive state for hip and knee replacement and reattachment surgery,” explained LaMontagne. “On average, procedures in California cost 69% more than the national average, and we find five of the top ten most expensive hospitals are in this state.”
All of the top ten most expensive hospitals for knee and hip surgery fail to meet NerdWallet’s ‘200 Quality Benchmark’, suggesting patients treated at these hospitals may face increased rates of infection, pneumonia, heart attacks, blood clots and even death. At the same time, four of the least expensive hospitals do exceed the 200 Quality Benchmark, meaning they offer better outcomes to patients.
“We found that many hospitals that perform more than 200 hip or knee procedures each year charge lower rates than do hospitals that fail to reach the 200 Quality Benchmark,” remarked Vice President LaMontagne. She suggested that “patients should not consider high price a signal of high quality.”
We observed no meaningful correlation between the price a hospital charges for hip and knee surgery and the relative income or age of people living in the nearby community. Likewise, we did not find that hospital size or operating characteristics had any consistent influence on hospital charges.
About NerdWallet Health
NerdWallet Health provides transparency to patients, empowering them to choose better and more affordable health care. NerdWallet Health’s newly launched Best Hospitals tool allows individuals to compare prices, experience, and patient satisfaction for hospitals in their region. Please consult a health professional for medical advice.