Arthroplasty implant costs - the best kept secret.

Identifying surgeon and institutional drivers of cost in total shoulder arthroplasty: a multicenter study

These authors sought to describe variation in the cost of shoulder arthroplasty performed by different surgeons at multiple hospitals and to determine the driving factors of such variation.

Across 4 high-volume institutions and 12 surgeons, surgeon volume and hospital volume did not correlate with episode-of-care cost.

Average cost per case of each institution varied by factors of 1.6  and 1.7  for anatomic total shoulder arthroplasty (TSA) and reverse total shoulder arthroplasty (RSA), respectively. 

Implants (56% and 62%, respectively) represented the highest percentage of cost for TSA and RSA.

The costs of implants vary greatly between facilities due to independently negotiated fees. The lack of correlation between cost and procedure volume is possibly a reflection of industry norms and negotiating practices. Hospitals are contractually obligated to refrain from sharing implant costs, and thus there is no transparency with which to inform negotiations. 

The importance of these secret negotiations is shown by data on reverse total shoulder prices from OrthopedicNetworkNews (link)

Note that the average selling price is between 1/3 to 1/2 of the "sticker" price.

From personal communications we know that influential medical centers with lots of clout can negotiate prosthesis prices that are 1/4 of the sticker price. This leaves community hospitals paying disproportionately higher prices and being disadvantaged when insurance companies and patients compare costs.

Fairness dictates that companies disclose their rules for pricing. Make transparent the formula that determines what a hospital must pay for an implant.

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