“Dark Secrets” of Healthcare Costing

This is definitely one of those “dark secrets” of healthcare costing, that the amount billed for the very same surgery varies widely across providers, with little correlation to the medical value received by the patient or the quality of care. While the cost of a total knee replacement averaged about $31,000 in 64 markets where Blue Cross Blue Shield analyzed its claims data, the cost in Dallas ranged from $16,772 to $61,585. This represents a four-fold difference for the same procedure in the very same metropolitan area.

Unfortunately, surgery costs can be more a function of a hospital’s budget and what they can get away with charging for that particular operation than the medical value received or quality of care. Even more disturbing is the fact that there appears to be very little correlation between the cost and the quality of care. Organizations such as the Mayo Clinic are widely regarded as the top provider of medical care, in many cases at costs far less than lower quality options. If an organization with the resources and health knowledge of Blue Cross struggles with keeping these costs to a meaningful standard, what hope do the rest of us have?  Take a look: