Hip replacement profiteering

A couple of years ago, I thought I might need a hip replacement. My left hip hurt a lot, especially walking upstairs. Turns out it was “only" bursitis, which is bad enough. I’m glad for that. Hip replacement devices are way overpriced and sometimes dangerous. Yet the market for them is enormous: In 2011, more than 645,000 hip replacements were performed in the US. Undoubtedly, they do improve the lives of many people. But their profit margins are unconscionable. 

An artificial hip costs about $350 to manufacture. But hospitals pay an average $4,500 to $8,000 for the device. In the case of one manufacturer, Medtronic, the overall cost of making its products is about 25 percent of what it sells them for, yielding a gross profit margin of about 75 percent.

After purchasing the device, the hospital then marks up the price for sale to the patient. The cost of implant procedures vary according to where you live. Overall, the cost averages $30,000. It’s cheapest in Birmingham, Alabama ($11,327) and highest in Boston ($73,987)—a 313 percent cost variation. In Boston, though, you could get a replacement for as low as $17,000. I guess you have to shop around. But if you live in the Fort Collins-Loveland area of Colorado, shopping around won’t do much good: in that area, the average cost is $55,686.

Plus, there are the kickback shenanigans. That is, device manufacturers pay doctors to use their products. In 2007 the five major device manufacturers paid over $200 million to about five hundred orthopedic surgeons.

Finally, safety can be an issue. In most devices, the ball (at the top of the femur) is metal and the metal socket is lined with plastic. One company developed a device that eliminated the plastic, making it metal on metal. It was purported to last longer than the older devices. But it was poisoning people. Small particles of cobalt and chromium were coming off the device and entering the bloodstream.

If you’re getting a hip replacement, there’s probably not much you can do about the cost. But in selecting a model, go for the tried and true.

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