The average price for a major hip or knee replacement increased by more than $9,000, or about 8 percent, at South Florida hospitals over one year, with Aventura Hospital and Medical Center charging the highest fee of any facility offering that procedure in 2012: $205,442.
A few miles north of Aventura, at Broward Health Medical Center in Fort Lauderdale, the same procedure costs $78,685.
That’s about $6,000 less than the national average price of $84,798 for a hip or knee replacement with major complications, according to new data released this week by the U.S. Department of Health and Human Services.
The department’s Centers for Medicare and Medicaid Services (CMS) analyzed charges and payments for the 100 most common inpatient procedures covered by Medicare at more than 3,000 U.S. hospitals during the 2012 fiscal year.
By making public the wildly varying prices for the same medical procedures — even among hospitals located in the same geographic market — the Obama administration said it hoped to increase transparency from healthcare providers and give consumers the tools to be smarter shoppers for medical care.
This week’s release of hospital inpatient and outpatient charge data is an update of last year’s unprecedented publication of hospital prices. Those prices are closely held by hospitals, doctors and insurers, which often hide their negotiated rates behind confidentiality agreements.
In April, CMS also made public the most detailed data on physician payments ever released in Medicare’s nearly 50-year history — showing what doctors charge for everything from routine office visits to surgical procedures.
As more consumers shoulder a greater share of their healthcare expenses through insurance plans with high deductibles, co-insurance rates and other out-of-pocket costs, hospital prices remain largely secret — especially in states such as Florida, which has no laws to compel transparency.
Instead, Florida consumers have a state-mandated website managed by the Agency for Health Care Administration at floridahealthfinder.gov, which includes a price range for some procedures.
But prices without context can mislead consumers, said Linda Quick, president of the South Florida Hospital and Healthcare Association, a membership group for medical providers.
“It’s not a guarantee,” she said of the Medicare hospital price data. “But it’s a guideline.”
The hospital prices published by CMS are for the procedures alone, and do not include physician fees, room and board at the hospital, complicating medical conditions or pre- and post-operative care — factors that can significantly affect the price.
Medicare prices also do not reflect the rates paid by private insurers, which can pay different prices for the same procedure at the same hospital depending on factors such as each insurer’s market share in a doctor’s or hospital’s geographic region.
The larger the hospital system, and the greater its dominance of a geographic area, the more leverage it can exert to extract higher reimbursement rates from insurers, which then pass those increases on to employers and consumers through higher out-of-pocket costs.
Still, hospital price information can be valuable for employers and consumers because charges for the same procedure can vary significantly from one hospital or doctor to the next, usually with little difference in quality.
Under Medicare, however, the government program’s payment is typically significantly lower than the price charged by the hospital.
The major hip or knee replacement for which Aventura Hospital charged an average price of $205,442 in 2012 was reimbursed by Medicare at an average rate of $22,589.