Same Knee Surgery, Twice the Price: Hospital Monopolies Push Up Healthcare Costs

More than a million times a year, a U.S. surgeon slices open a knee, strips out worn cartilage, caps the leg bones with metal, and drops in a plastic spacer to allow the new joint to glide. While knee replacement procedures have become standard, however, the prices charged have not. 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 Francisco startup that collects recently released data from hospitals and insurers. 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. Formed by the merger of the two largest hospitals in the region, Mission has little competition and more power to demand the higher price. This comparison between these two hospitals illuminates how large hospital systems created by a wave of U.S. mergers in recent decades can dominate the competition and push up healthcare costs. While many factors affect the price of a medical procedure, hospitals with few competitors ...