In Need Of A New Hip? Pricing Transparency Would Benefit All Americans

It's an informative tale in a recent New York Times article ("In Need of a New Hip, but Priced Out of the U.S.") about Mr. Michael Shopenn and his hip. Mr. Shopenn went to Belgium and paid around $13,600 for a hip replacement because he supposedly couldn't find it cheaper in the crazy quilt pricing structure that is the American healthcare system.

Healthcare costs in this country are crazy. The story implies greater transparency and consumerism — giving patients and their families the ability to shop around — would help. My colleagues and I at the Indiana Orthopaedic Hospital in Indianapolis agree. We have advocated for years that transparency in pricing and giving patients (consumers) more information and more choices would be better for patients and ultimately lead to lower healthcare costs.  

As healthcare providers, we are thrilled that Mr. Shopenn and his hip are doing well and that he found relief from his discomfort. But how realistic is it for the average American to jet to Europe for joint replacement surgery? Mr. Schopenn's travel expenses most certainly are not included in the price tag of his hip. The simple fact is, we could have done his procedure here in Indianapolis (we have done so for years) at a cost competitive with his experience in Belgium.

Americans may have the best healthcare in the world, but those of us who manage and work in hospitals, who see patients every day, know the healthcare market is not a typical consumer-driven market. That crazy quilt mentioned before is a payment structure of third-party payers (Medicare/Medicaid and private insurance companies) billed by hospitals at widely varying rates. Patients are divorced from the true cost of the goods and services they receive. They rarely see what their treatment really costs — or at least what their insurance providers (assuming they have insurance) were billed.

This "Byzantine" structure was illustrated by the recent release by the federal government of extensive hospital costs data from across the country. In a nod to making the cost of healthcare more transparent to Americans, CMS published hospital cost data for a variety of procedures at 3,428 hospitals across the country. Pricing varied widely and wildly.  (Our hospital ranked 11th for cost efficiency in the United States, according to the study.  Again, Mr. Shopenn should have come to Indy.)

We have long advocated for pricing transparency. Patients and their families should be able to easily and quickly determine the cost of a procedure, the experience and performance history of the hospital and physicians, and then make an informed decision.  A physician-owned hospital, our facility is patient-focused, and our mission is to achieve the best possible outcomes for our patients and their families.

With true transparency and consumerism, Mr. Shopenn would have found his hip procedure competitively priced. He certainly would have found that to be the case with our hospital. We're not Belgium, but Mr. Shopenn would have received a warm welcome in Indianapolis. Our hospital, like those of many of our peers, is welcoming and comfortably appointed, but the objective is still that of treating patients effectively, efficiently and getting them home quickly. Home is, after all, the best healing environment.

We offer some suggestions to make healthcare more consumer friendly:

  • True price transparency with facilities being able to offer pricing information to patients without violating non-disclosure agreements and facing competitive backlash.  
  • True competition in the healthcare arena with the ability to negotiate with vendors, manufacturers and suppliers.  
  • Lift the ban on physician ownership of hospitals to allow greater provider selection for patients (before the 1960s, most hospitals were owned by physicians).  
  • Educate patients and their families on the true cost of healthcare, explaining in simple terms how the system works.  
  • Make readily available to patients hospital ratings by independent third parties such as HealthGrades and HHS.

There really is something wrong when Americans have greater latitude in pricing and purchasing their televisions and automobiles than their healthcare. Americans should be able to research and understand the cost of the healthcare they need. They should be able to obtain it at a reasonable price and be assured of the best possible outcomes. And that healthcare should be close to home.  

Hip replacement is one of the best procedures in all of medicine. We are privileged and honored to perform it for the benefit of many at our hospital. We deliver the highest possible care right here in Indiana for about the same price without the travel and in a comfortable setting. We are thrilled that Mr. Shopenn is doing well. His story is our mission: successful treatment and improved patient outcomes.

Jane Keller is the CEO of OrthoIndy, the largest orthopedic physician practice in the Midwest, and the Indiana Orthopaedic Hospital in Indianapolis. She started her career as a registered nurse before moving into management and earning her MBA from Butler University. She has served as CEO of the Indiana Orthopaedic Hospital since shortly after the hospital opened in 2005. She was named CEO of OrthoIndy in 2012.

 

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