r/HospitalBills • u/Old_Glove9292 • 11d ago
A $101,000 knee replacement? Why hospital charges vary so much.
https://www.usatoday.com/story/money/2025/08/18/why-hospital-charges-prices-vary-cost/85656566007/3
u/tw1080 9d ago
Health insurance companies want to pretend they “saved” their members a crap load of money, justifying their insane premiums. They also want to feel like they got a “deal.”
The no-frills provider needs to make $100 for this specific billing code. In order to do that, they claim that they charge $600 more than they want, to get the insurance company to arrive at $100. The provider gets paid $100, the insurance company pats itself on the back because they got a $500 discount, and they tell the member that they “saved” them $500! Joe Schmoe that’s uninsured gets slapped with a $600 bill because he doesn’t get a contracted rate.
Meanwhile, the fancy shmancy facility, that brought in gourmet food options and all-private rooms and a designer interior and spends a fortune on “awards” and advertising, because they rely on patient satisfaction scores that read like a Hilton Comment Card (“did anyone leave mints on your pillow? Did you get animal shaped towels? Did Karen get the celebrity treatment for her cholecystectomy?!) NEED to pay for all that crap. So they do it by charging $1100 for the same code. But they tell the insurance company it’s $7700! The insurance company and the facility have a sort of codependent relationship, and live to make money off one another. So Insurance agrees to pay THIS facility $1000. They also own the pharmacy and the doctors too. Insurance B isn’t having as many rounds of golf with this facility’s CEO, so they’re gonna get charged $8000, and the insurance company is going to cut a deal to only pay $1500. That way they can offset the “deal” they cut with CEO Chuck’s golf buddy, and their HDHP patient is gonna pay it anyhow, on top of their $1000/mo premium, which will increase at least 20% per year. But wait! The hospital had a fundraising “gala” and got local rich people to donate all the $$$ needed to buy this top of the line CT machine that does exactly the same thing as last year’s model, but it has an extra set of LEDs. So the CEO saves a ton, and the board gets a big fat bonus at the end of the year.
Hope you’re up to speed on your psychological thrillers because here’s the twist nobody saw coming. The same company owns both hospitals anyhow, and the insurance companies. That CEO puts in a grueling 0.25 hours per week of “work” for his $7 million salary, and takes clients out on his yacht for a tax deduction. He also owns the PBM and the pharmacy where the patient filled their prescriptions. All of his subsidiaries pay employees the lowest possible rate, overwork them, and they don’t care about turnover. If you go 5 or 6 levels deep, he’s probably got a financial interest in the schools that the front-line providers took out $$$$ in student loans to attend, and the testing company that attested that they were competent to practice. He also co-authored the $400 textbook they used.
And in another shocking twist, the ACTUAL COGS for the procedure is only $19.95.
It’s ALL A SCAM.
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u/Old_Glove9292 11d ago
"Consumers are quick to blame their insurer when health prices rise, Ho said. And while insurers have been scrutinized for practices such as prior authorization and service denials, the main driver of health insurance premiums are hospital charges for both inpatient and outpatient services, Ho said."
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u/mad-i-moody 11d ago
Yeah it’s pretty fucked that in this day and age hospitals can be bought and sold by large companies. Like wtf how do we not see a problem with this.
“wELl ThE cOMpeTiTioN DriVEs dOwN pRiCeS aNd GivEs cOnSumERs bETteR pRiCeS!!!” Yeah, my ass it does.
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u/Heart_robot 10d ago
It’s interesting that people have such a problem with it for vet care (it is a problem) but cool with it for humans
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u/tlit1357 9d ago
Pharmacist here. Insurance companies are absolutely one of the causes of rising healthcare costs. They reimburse less and sometimes even under acquisition cost for drugs. You bet costs for everything will inflate to cover their under-reimbursement. Also when they don’t want to cover the anticoagulant that the hospitalist prescribed for patient’s dvt/pe/afib at the pharmacy, that patient is going to wind up back in the hospital for probably the same thing that put them there in the first place.
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u/Old_Glove9292 9d ago
Insurance companies contribute to costs, but they're not the main driver as has been demonstrated in multiple sources that I've shared in this thread. While your statements hold some truth, they're only a tiny fraction of the story, and your argument seems tailored to exculpate providers of any ownership over their share of the cost equation (which is enormous)
On a side note, why mention that you're a pharmacist? Do you think that adds to your credibility on this topic somehow? I guess I'm curious, because it's amazing to see how many med and med-adjacent people style themselves as experts on anything and everything that touches healthcare-- finance, economics, business management, information technology, politics, etc -- when in fact, their knowledge on those subjects is very narrow and their understanding doesn't generalize at all to the rest of the world, which renders them incapable of making any sort of meaningful assessment or critique of those functions within their own industry...
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u/tlit1357 9d ago
I add that I’m a pharmacist for context. I have direct experience in the industry. Do you?
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u/Old_Glove9292 9d ago
Right. That's exactly my point. You're under the impression that you "industry experience" elevates your ethos on this topic somehow, but it doesn't. That's like a cashier at CVS flexing their experience in a conversation on GLP-1 agonists.
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u/Dwindlin 7d ago edited 7d ago
You are aware that most physicians are responsible for their own billings right? We do actually have to understand the business side of healthcare.
On that note there is a huge lack of context in this article. Surgery isn’t a fixed cost, even within an institution. Using knee replacement as an example. Is it a primary? Revision? Robotic? What kind of implants are needed? Length of surgery (again these are humans not machines so it isn’t always exactly the same) changes cost. Is the anesthetic straight forward or do they have conditions that make it more challenging. Did they need blood or other specialized medications? Were they healthy enough for outpatient or did they have to stay a few days? These all matter when you’re taking about the cost of any procedure.
Comparing claims from procedure codes submitted to insurance is a worthless endeavor, there is never going to be enough context there to make any kind of real comparisons.
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u/Old_Glove9292 7d ago
Why do you think that understanding billing codes in the context of one industry equips someone with anything more than a cursory understanding of the "business side" of healthcare? Let alone giving them the tools to conduct a comparative analysis across industries and provide meaningful contributions to discussions on reform? I stand by my point. Clinicians are dangerously overconfident about their knowledge across a whole swath of topics that brush up against healthcare including but not limited to finance, accounting, economics, law, and technology. They think they know a lot, but they don't... and the overconfidence that they bring into conversations well outside their scope of knowledge is just embarrassing...
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u/Dwindlin 7d ago
This is one big ad hominem, you don’t actually point out anything that I said that was incorrect. And it’s pretty fucking clear that YOU’RE the one out of their depth here. Considering ALL of the articles you’ve linked are doing exactly that, looking at codes submitted and comparing them to actual bills. That’s a worthless endeavor, because, as has been pointed out to you several times, there is a MASSIVE amount of missing information.
You cannot just fucking set a price point for things in medicine. People aren’t widgets, even something simple like medications can have extreme amounts of variability.
You want to standardized the way billing is reported? Fine. But the article specific dealing with stents, I know for a fact that the Cleveland clinic number is JUST the physical stent, whereas the one they are comparing it to is for the entire fucking procedure. Doesn’t really seem like a fair comparison does it?
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u/Old_Glove9292 6d ago
Whatever helps you sleep at night... The "complexities" of healthcare aren't any more complex than other industries, but people like you think everything in healthcare is unique and special and only people in the industry can understand. That's just a load of bullshit. The ongoing commoditization of healthcare will undermine the value of clinicians, but ultimately benefit patients through cheaper, more predictable, and higher quality care. I'm sorry to break this to you but healthcare is not special, and you're not special by extension.
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u/Dwindlin 6d ago
Okay. So the economics of healthcare are either so complex the likes of mere clinicians can’t understand it, or it’s not complex at all and the clinicians are making more difficult than necessary? Which is it, because you seem to be arguing both at this point, so maybe pick a premise for your argument.
If this is reference to the actual taking care of patients, well then by all means fucking step up. If it’s so easy I’ll leave you to it. I could use some time off.
Also, you STILL have actually addressed any actual argument I’ve made. Just more straw-men, ad hominem, and goal post moving.
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u/cel22 5d ago
You sound a lot more like industry talking points than a neutral critic. Insurers and administrators love to say doctors “don’t understand the business side” because it justifies why they get to skim off 25–30% of healthcare spending in overhead. Meanwhile in countries like Germany or Sweden, most of that money goes directly to patient care. Blaming doctors just keeps the middlemen safe.
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u/Strong_Still_3543 11d ago
You could also do it your self
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u/Old_Glove9292 11d ago
Lollll talk about kindergarten-level cognitive development...
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u/Strong_Still_3543 11d ago
Never learned sarcasm in kindergarten?
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u/saysee23 11d ago
So the prices vary. Duh.
So do the patients, complications, surgeons, materials....
Let's take the material - ceramic? Metal? Which has the best biocompatibility for the patient? How we securing it? Is this knee going to support an 18 year old for 70 years? Or a 70 year old for 18 with less stress on the joints? First surgery on this knee? Other replacements in the patient?
You want 1 option for all. Sure, that will be cheaper. Probably not as successful.
One size does not fit all.
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u/Old_Glove9292 10d ago
Except the study being cited demonstrates that this variability is not across patients, but rather across hospital systems. And the researchers are not the first to identify and describe this phenomena. Here are just a few other examples, but this list is by no means exhaustive:
Some Michigan hospitals marking up drug prices by up to 800%, report finds
Hospital prices for the same emergency care vary up to 16X, study finds
Even at elite hospitals, the prices make no sense
Insurance companies aren't the main villain of the U.S. health system
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u/saysee23 10d ago
Well... Trauma- they stated patients taken to closest hospital. Common. If the closest isn't a trauma center, they may transfer the pt to trauma center because they do not have - on site trauma surgeon/OR/diagnostics inc CT. So the lower acuity hospital will charge less than the trauma center- usually major hospitals/universities (which accounts for some of the other articles you cited for price differences). And that 1st price is what is averaged because when they arrive at the 2nd location it's a different code because they've been evaluated by a physician.
"The median price of a stent or balloon angioplasty was $657 at the Cleveland Clinic but $25,521 at Cedars-Sinai hospital." - no one wants the $657 stent. And Cleveland Clinic has more Medicaid patients, causing the average to be lower. Insurance was noted when averages were calculated.
Medicare has a standard price. EVERYTHING revolves around that price. Everything . . Some insurance companies negotiate different prices with their customers (employers are a large %). Some services cost more depending on availability, demand - do you want to force Drs to live/work in certain areas to equal all that out??? Some hospitals/providers write off balances so that's a $0, but not everyone qualifies for that.
This is NOT comparing 16oz Peter Pan prices between all the major groceries. That's not a "phenomena" .. it's how business is done.
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u/Old_Glove9292 10d ago
Honestly, this is just a jumbled word salad, lacking any logical structure or intellectual rigor. It's fairly obvious that you're bending over backwards to defend providers at all costs, and as such, your arguments ring hollow. You clearly don’t understand English well enough to know what “phenomena” means, and your grasp of business is quite limited as well. You seem to believe that your insider knowledge of healthcare makes you an expert on such matters, but in reality, you’ve only learned a narrow set of patterns unique to the industry—not the broader principles of business, finance, and economics that would allow you to put them in perspective. Otherwise, you would recognize the patent absurdity embodied in your statements.
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u/saysee23 10d ago
So no valid arguments, just complaining about my response. . I don't care what you think about me.
You bringing attention to the fact prices vary isn't earth shattering. The article you provided was definitely slanted. It's important to know there are other sides to the story, things they left out.
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u/Old_Glove9292 10d ago
Why do you think any of the five articles that I shared with you are "slanted"? Because they present facts or conclusions that you don't like?
I'm not picking apart your argument, because I know you're arguing in bad faith and it's a waste of time and energy. Your argument more-or-less amounts to "it's complicated" with a strong ethos of "only people in healthcare will understand", which is more of a cop out than an argument. You seem to possess some combination of the following beliefs-- 1) that this absurd level of complexity and lack of transparency is necessary and there's nothing that can be done to fix it 2) that there's nothing wrong with it and the system is working just fine 3) only people invested in the current system are allowed to critique it-- I categorically reject all of these positions, because they're less about finding a solution, and more about shutting down any perspectives that run counter to the accepted narratives within the healthcare industry (i.e. they're bad faith arguments)
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u/saysee23 10d ago
Slanted because they highlight that there is such a huge difference in pricing because our health care system is bad. Without taking into consideration any necessary aspects of the equation. There was no conclusion in any article I read. It's not about what I like or don't. I see that it is incomplete. It's opinion based.
You could just as easy change the headline to: The cost of a hamburger varies across the United States. Some burgers are $5 where some can cost $30. We used to get the same burger for 99 cents. Same, right?
My argument is not in bad faith, I gave examples of parts of the equations that have to be considered. None of the articles provide a solution, probably because they did not isolate a problem. What problem are you highlighting? The overall cost? The cost prior to insurance? It's medication, there isn't a uniform, generic solution to increasing costs.
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u/HsRada18 10d ago
Prices vary due to regional influence and negotiations between the insurance provider and the institution. One wants to low ball for their margins and other wants as much reimbursement as possible. It’s like how much is the real estate property worth. Hospital or facility fee costs make up over 95% of that cost. Provider fees make little from that total and it keeps declining yearly since hospitals have more lobbying power. Since 1970s, the spending on providers has been dropping. Thus a lot of providers are bought up and now part of corporate medicine. Drones on the floor or operating room versus in a cubicle.
With that said, some institutions really inflate their cost as part of a standard schedule (which is the no insurance cost). Some if it is to balance for the people who never pay for care. Some of it is knowing that even if they drop it to a reasonable price, the insurance company will pay even less. The other factors include medical device makers who really don’t have many competitors and can charge a lot for implants and equipment. Gotta give the reps a big bonus every year.
The politics are insane. There are too many hands in the pot now. And now as the Boomers go through their declining years, we will see how the system goes through unseen stress and likely crack.