8-fold price difference for knee surgery exists between Minnesota hospitals

The Minnesota Department of Health uncovered "huge swings" in pricing across four common procedures performed at Minnesota hospitals.

In a report released Jan. 3, the department examined commercial payer data for common procedures like knee surgery and cesarean section delivery.  DOH officials discovered the price for such procedures varied drastically depending on which hospitals patients chose.

Between July 2014 and June 2015, the average price for a knee replacement across Minnesota hospitals was $23,997. However, knee surgery prices ranged from $6,186 at the lowest-priced hospital to $46,974 at the highest-priced hospital — a roughly eight-fold difference.

The department also found a nearly five-fold difference in the price of a cesarean section delivery during the same time period. The procedure price, averaging $10,234 across Minnesota hospitals, ranged from $4,693 at the lowest-priced hospital to $22,831 at the highest-priced facility.

The report stems from the state's larger initiative to analyze the complexity of healthcare pricing through its All-Payer Claims Database. Under state legislation passed in 2008, Minnesota required its health commissioner to provide greater price transparency for hospital fees. The database, which constitutes one component of the initiative, comprises more than 1.1 billion unidentified healthcare claims from private and public payers. Minnesota law prevents the database from identifying individual hospitals and providers.

Minnesota Department of Health officials said they hope the data will help employers choose networks with high-value care and competitive pricing. Officials aim to publish prices for heart procedures and back surgery later this year.

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