Study: Insurers pay twice as much as hospitals for orthopedic implants

Insurers pay more than twice the amount for orthopedic implants than hospitals do, according to a study published in the Journal of the American Medical Association.

For the study, researchers analyzed claims data from a nationwide, private health insurance plan for almost 64,000 patients under age 65 who underwent a total knee or hip replacement between 2011 and 2015.

Researchers accessed the average selling prices of knee and hip implants through the Orthopedic Network News, the largest publicly available implant registry containing information from 160 U.S. hospitals.

To assess price variation between hospitals and insurers, researchers compared the estimated average selling prices to insurance payments for the implants.

Here are four study findings.

1. Researcher found insurers paid more than twice as much for implants than hospitals. Commercial insurers paid an average of $10,605 for knee implants, while hospitals paid an average of $5,023 to acquire the devices from manufacturers, according to the report.

2. The price difference was even more apparent for hip implants. Insurers paid an average of $11,751 compared to $5,620 paid by hospitals.

3. Researchers concluded the payment discrepancies led to about $425 million in additional expenses for implants.

4. Kenneth Mandl, MD, MPH, lead author and researcher at Boston Children's Hospital, said more information on implants is needed to stimulate better price negotiations among insurers, hospitals and drug and device makers, according to STAT.

"This will increasingly become an issue for consumers," Dr. Mandl said. "There is very limited transparency into what comprises the true cost of healthcare."

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