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10 wild places to replace a knee

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As new health policy debates come to life in Washington and state capitals, the Blue Cross and Blue Shield Association is trying to use its member companies’ claims experience data to show how strange the U.S. health care system is.

The association commissioned BHI, a data analysis company, to help it analyze members’ experience data for two types of common surgery — hip replacement surgery and knee replacement surgery — to illustrate how much costs can vary from facility to facility.

See also: Health cost witness: Transparency could backfire

The analysts looked at claims incurred in 64 markets during the 36 months ending in July 2013. They tried to make “apples to apples” comparisons by using only data for patients outside Medicare and only for patients ages 18 to 65. When possible, they excluded episodes complicated by conditions such as cancer or HIV.

The analysts also used the facilities’ “real” negotiated rates, not the sky-high retail rates the facilities might try to charge patients who came in off the street, out of network.

Even after trying to make apples-to-apples comparisons, they found that costs varied by more than 40 percent in about half of the markets, and by more than 100 percent in about a dozen of the markets.

Physicians, hospitals and other care providers have been fighting efforts to let traditional Medicare, Medicare Advantage plans and the new Patient Protection and Affordable Care Act (PPACA) public exchange plans use narrower provider networks.

The Blues argue in their cost report that the extreme variation occurring in health care prices in many U.S. communities has obvious financial consequences for patients and employers.

“From a macroeconomic perspective, it can have serious implications for the sustainability of a U.S. healthcare system that is exceeding its economic capacity,” the Blues argue.

To see a list of the 10 markets in which the BHI analysts found the biggest facility-to-facility differentials, or knee gaps, for knee replacement surgery facility costs, read on. 

Hospital

10. Oklahoma: Oklahoma City

Knee gap: 108 percent

Typical costs range from $22,103 to $45,895, with an average of $30,077.

See also: Health plan cost increases outstrip inflation

Surgeon

9. Texas: Austin-San Marcos

Knee gap: 111 percent

Typical costs range from $21,528 to $45,640, with an average of $37,309.

See also: Health costs slam middle-income Americans

Charleston

8. South Carolina: Charleston

Knee gap: 114 percent

Typical costs range from $27,256 to $58,418, with an average of $40,170.

See also: PPACA subsidy gap hurts the moderately broke

Minneapolis

7. Minnesota: Minneapolis-St. Paul

Knee gap: 140 percent

Typical costs range from $20,401 to $48,961, with an average of $31,166.

See also: 5 things Eli Lilly is saying about PPACA

Houston

6. Texas: Houston 

Knee gap: 145 percent

Typical costs range from $17,413 to $42,704, with an average of $33,724.

See also: Hepatitis price war draws Blue Cross coverage for both drugs

Image: Houston (EPA photo).

Doctor

5. Virginia: Richmond-Petersburg

Knee gap: 149 percent

Typical costs range from $15,373 to $38,207, with an average of $29,617.  

See also: Lavish ‘Cadillac’ health plans dying out as PPACA tax looms

Philadelphia

4. Pennsylvania: Philadelphia

Knee gap: 163 percent

Typical costs range from $17,660 to $46,461, with an average of $30,565.

See also: New regs limit nonprofit hospital billing

Seattle

3. Washington: Seattle-Bellevue-Everett

Knee gap: 173 percent

Typical costs range from $22,5701 to $61,610, with an average of $33,950.

See also: View: Open those providers’ curtains

Harvard

2. Massachusetts: Boston-Worcester

Knee gap: 185 percent

Typical costs range from $18,470 to $52,691, with an average of $26,900.

See also: View: Whining Harvard professors experience Obamacare

Punch in the jaw

1. Texas: Dallas

Knee gap: 267 percent

Typical costs range from $16,772 to $61,585, with an average of $39,623.

See also: 5 worst states for local government hospital costs