The prices that insurers negotiate for total joint arthroplasty (TJA) procedures vary widely according to type of insurer and aren’t associated with any conventional measures of healthcare quality, according to a new study from researchers at Stanford University.
The study was published online ahead of print by Clinical Orthopaedics and Related Research.
Total joint arthroplasty is the most common in-hospital surgery among US patients aged 65 and older. The number of TJA procedures is predicted to continue to increase year after year, making it a key driver of rising healthcare costs.
To better understand these costs, the researchers analyzed publicly available data from 18 hospitals in a single large California health system. They classified the negotiated prices for TJA by payer type:
- Commercial in-network
- Commercial out-of-network
- Medicare Advantage
- Medicaid managed care
- Discounted cash pay
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 pay: $52,200
- Medicare Advantage: $20,400
- Medicaid managed care: $20,300
“We found that the differences in negotiated prices across the five surveyed payer types for the same (TJA) procedures varied by nearly $60,000,” the researchers reported.
No correlation was observed between the average negotiated price and any of 4 typical measures of quality of care:
- TJA complication rate
- Need for hospital readmission after surgery
- Patient ratings of their care
- Overall hospital performance score
In addition, no association was noted between price and these quality measures when all payer types were aggregated into a single average negotiated price by hospital.
The researchers said that patients need access to prices that are linked to quality information. They proposed that surgeons determine appropriate measures of TJA quality, combine them with price information, and present the results in decision aids, such as brochures and charts.
“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 researchers said.
“Hospitals should combine them with price information and present the results transparently to help patients make more informed choices about surgery.”
Zhuang T, Shapiro LM, Baker LC, Kamal RN. The price-quality mismatch: are negotiated prices for total joint arthroplasty associated with hospital quality in a large California health system? Clin Orthop Relat Res. December 13, 2022. Published online ahead of print. doi: 10.1097/CORR.0000000000002489