One of healthcare’s greatest challenges is determining exactly how much an operation is going to cost. While a patient’s unique body and medical history can make it difficult for providers to predict the exact price, consumers are applying pressure to make healthcare more like retail, with open and transparent pricing. We acquired some research from healthcare consultants Holmes Murphy about how different hospital systems price for a major joint replacement.
According to Holmes Murphy, $40 billion is spent in Dallas-Fort Worth every year on healthcare. In order to combat costs, they were employed by regional municipalities to form the North Texas Coalition to encourage “more transparency, sustainability, and predictability in healthcare pricing.”
The goal of the coalition is to use its numbers to negotiate directly with hospitals and get bids for certain operations. As a result, the city of Fort Worth experienced $19 million in savings last year, with 7 percent inpatient costs and 19 percent savings for high cost claimants.
There will be more to come in regards to the coalition, but according to research done by Holmes Murphy, prices range widely across North Texas. The group analyzed the billed prices for a 2016 knee replacement without complications, the most commonly billed procedure. The chart below shows the medicare reimbursement rate and the level at which different hospitals charge above that. According to their research, prices ranged from 250 percent of medicare reimbursement at Methodist to over 1300 percent at the Medical Center of Arlington. The North Texas coalition hopes that transparent prices will give municipalities leverage to negotiate transparent and fair pricing for their employees.