Total Joint Replacement: Does High Price = Quality?
The prices that insurers negotiate for total joint replacement (TJR) procedures vary widely according to type of insurer and aren’t associated with conventional measures of healthcare quality, according to a study in
TJR is the most common in-hospital surgery performed for
For each hospital, they classified the negotiated prices for total joint replacement by payor type: commercial in-network, commercial out-of-network, Medicare Advantage (plans in which commercial insurers contract to provide Medicare benefits), Medicaid, or discounted cash pay.
“We found that the differences in negotiated prices across the five surveyed payor types for the same [TJR] procedures varied by nearly
Private Insurers Paid Most, Medicaid Paid Least, Regardless of Quality Measures
The lowest negotiated prices were associated with Medicare Advantage and Medicaid insurance plans, and the highest prices were associated with out-of-network care covered by commercial insurance plans. When all types of joint replacement procedures were considered, the average price was:
- Commercial out-of-network—$78,800
- Commercial in-network—$63,900
- Discounted cash—$52,200
- Medicare Advantage—$20,400
- Medicaid managed care—$20,300
There was no correlation between the average negotiated price and any of four measures of the quality of care: the TJR complication rate, the need for hospital readmission after surgery, patients’ ratings of their care, and overall hospital performance score. Neither was there any association between price and these quality measures when all payer types were aggregated into a single average negotiated price by hospital.
Efforts to Improve the Value of TJR Care Depend on Informing 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 say. “Hospitals should combine them with price information and present the results transparently to help patients make more informed choices about surgery.”
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