Costs Vary Widely for Hip and Knee Replacements

November 2, 2015

By Rarione Maniece, Mo McNabb and Rachel Williams

The cost of a hip or knee replacements in Virginia can vary widely — by more than $120,000 — depending on the hospital, according to an analysis of recently released federal data.

For example, CJW Medical Center in Richmond charged an average of more than $150,000 for such a procedure, the data from the U.S. Centers for Medicaid and Medicare Services showed.

But Rappahannock General Hospital in Kilmarnock charged less than $27,000 for the same operation (officially called “Diagnosis-Related Group 470 — Major joint replacement or reattachment of  lower extremity”).

That operation is one of the most common in Virginia: The state’s hospitals performed more than 13,000 hip or knee replacements during the 2013 fiscal year, the time period covered by the data. It is one of the fastest-growing surgeries performed in the U.S., according to a study conducted by Blue Cross Blue Shield.

For two diagnoses, the cost of treatment varied by more than $300,000:

¶ To treat “DRG 870 – septicemia or severe sepsis w mv 96+ hours,” Henrico Doctors’ Hospital in Richmond charged an average of $420,000. But Virginia Hospital Center in Arlington charged less than $80,000. Severe sepsis is a “disturbingly prevalent” diagnosis in U.S. hospitals.

¶ To treat “DRG 329 – major small & large bowel procedures w mcc,” CJW Medical Center charged an average of $359,000. But Riverside Walter Reed Hospital in Gloucester charged only $50,000.

Medicare pays far less than the amount the hospitals charge. (For a major joint replacement in Virginia, for instance, the government agency authorized hospitals to be paid about $13,700, including the patient’s deductible and copayment.) But insurance companies and uninsured individuals may find themselves facing the much higher amounts that hospitals charge.

Some institutions are trying to address the disparity in costs among health care providers. Blue Cross Blue Shield has created the Blue Distinction Centers+ designation for hospitals that offer safe and effective care while keeping charges lower than other providers. 

Many news organizations have published stories based on the data. The Washington Post, for example, reported that “50 hospitals charge uninsured more than 10 times cost of care.”

Check our math

Here is the data set we used in our analysis. We downloaded it from the U.S. Centers for Medicaid & Medicare Service and extracted the data for Virginia.

This article is a “Data Drop brief” — a quick-hit posting based on analysis by students in MASC 644 Computer-Assisted Reporting. The exercise involved downloading data from a federal government website and then filtering and sorting it with Excel. We also did a pivot table to summarize the data — in this case, computing the minimum and maximum charges for each hospital procedure in Virginia.