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Same Knee Surgery, Twice the Price: Hospital Monopolies Push Up Healthcare Costs
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In Short: Hospitals with monopolies charge significantly higher prices for the same procedures, as seen in comparisons between Catawba Valley Medical Center and Mission Hospital in North Carolina.
Hospitals with monopolies in their regions charge significantly higher prices for the same procedures, as demonstrated by a comparison between Catawba Valley Medical Center in Hickory, North Carolina, and Mission Hospital in Asheville, where the cost of a knee replacement procedure was about $16,000 and $40,000, respectively, under the same health plan this year.
Since 2021, the Centers for Medicare & Medicaid Services has required hospitals to disclose prices, making it possible to gather comprehensive data such as that collected by Serif Health, a San Francisco startup. This data reveals stark differences in pricing for the same procedures across different hospitals.
Hospitals do not advertise their prices, and even when they are revealed on a bill, patients scarcely notice the bottom line because they don’t pay most of it — their insurers do. Zack Cooper, an associate professor of public health and economics at Yale University, noted that 'what the data shows pretty clearly is that when hospitals have bargaining leverage, they tend to have higher prices.
In a March memo, Federal Trade Commission Chairman Andrew Ferguson called for a task force on healthcare mergers that are leading to 'higher prices' and 'decreased quality' of care. Last year alone, hospital and health systems announced 46 mergers and acquisitions, according to Kaufman Hall, a healthcare business consulting firm.
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- At Catawba Valley Medical Center in Hickory, North Carolina, for example, the cost of the procedure under a Blue Cross Blue Shield health plan this year was about $16,000, according to data from Serif Health, a San…
- Little more than an hour’s drive west, however, at Mission Hospital in Asheville, the cost of the procedure under the same health plan was around $40,000, or more than double, the data showed.
- But since 2021, the Centers for Medicare & Medicaid Services has required hospitals to disclose prices, making it possible to gather comprehensive data such as Serif Health’s.
- The center has charged Cigna two times what a hospital two hours north did for a knee replacement this year, the Serif Health data shows.
- Banner North Colorado Medical Center, which ranks as the leading healthcare provider in Weld County, Colorado, charged a UnitedHealthcare patient $20,000 more for the surgery in Greeley than a health system an hour’s…
- A Mission Hospital spokesperson said comparing hospitals’ prices was unfair or misleading because their practices and constraints vary so much.
- Hospitals do not advertise their prices, and even when they are revealed on a bill, patients scarcely notice the bottom line because they don’t pay most of it — their insurers do.
- “What the data shows pretty clearly is that when hospitals have bargaining leverage, they tend to have higher prices,” said Zack Cooper, an associate professor of public health and economics at Yale University who…
Sources
- KFF Health Newslink