GAO: Some Hospitals Overpay Thousands of Dollars for Medical Devices

Some hospitals pay thousands of dollars more than others for implantable medical devices — such as cardiac defibrillators and hip and knee joint replacements — and those excess costs may be passed onto Medicare, according to a report from the Government Accountability Office (pdf).

The GAO looked at data from 31 hospitals from 2004 through 2009. The report indicated there was significant variation in reported prices paid for several devices, most of which are used in cardiac or orthopedic procedures.

For example, the difference between the highest and lowest price hospitals reported paying for a specific automated implantable cardioverter defibrillator was $8,723, according to the study. The average price of an AICD ranges from $16,445 to $19,007.

The report concluded that the lack of price transparency for IMDs makes it difficult to determine if hospitals are obtaining the best prices. This could have impacts on Medicare, which spent more than $19 billion in 2009 for hospital procedures involving various IMDs.

"A substantial portion of this amount may be attributable to the cost of the devices themselves, but exactly how much is unknown, in part, because hospitals purchase the IMDs and Medicare does not track IMD prices or how much individual hospitals pay for them," according to the report.

The GAO also indicated that physician preferences for particular manufacturer's devices and models could complicate hospitals' bargaining power upon purchasing IMDs.

Related Articles on Hospitals and Medical Devices:

Legislation Would Boost Safety of Post-Market Approval Medical Devices

CMS Publishes Proposed Rule for Physician Payments Sunshine Act

230,000 Medical Device Adverse Events Reported to FDA in 2010

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