Health Care Analysis 1: Hip Replacement (08-07-2020; v220a): Author- Kevin Boyle, President, DevTreks

This is a sample story used in a DevTreks tutorial.v220a

1. Introduction

The U.S. GAO (2011) and the popular press (see the New York Times and Wall Street Journal references) find the following problems with health care cost and benefit data in the USA:

1. Consumers don’t receive information about the costs of their treatments until after the treatment occurs.
2. The cost for the same health care treatment varies by several orders of magnitude. For example, the costs for a hip replacement varied by a factor of 10 (from $11,100 to $125,798).
3. The definition of health care costs or benefits varies widely. For example, treatment costs differ depending on whether they are list price, market price, insurance-negotiated price, government imposed price, cost of production price, or some other price.
4. Costs fail to account for the full cost of treatment. For example, the cost of a hip replacement in a typical hospital does not include the associated outpatient rehabilitation or new household furniture purchases needed because of the treatment.
5. The variety of consumer health benefit structures (premiums, insurance reimbursement amounts, copays, employer penalties, deductibles, in-network versus out-of-network fees) makes it difficult to estimate a patient’s out-of-pocket costs. Some insurance companies have specific agreements with some health care providers not to reveal data about costs.
6. The quality of medical treatments is largely ignored. For example, in the case of a hip replacement, consumers can’t access data about potential outcomes of treatments such as rates of mortality, hip dislocations, inflammatory reactions, surgical wound infections, or blood clots.
7. Data is not available summarizing patients’ experiences with the health care they received. Treatments can’t be assessed in terms of patient satisfaction with the treatment including their ratings of physical pain, mobility, emotional state, or other physical and socioeconomic factors.
8. High costs help some health care providers “game” the system. The nature of the games vary from deducting higher costs on IRS reported expenses, providing medical services that aren’t needed, billing the same procedure differently depending on the location of the procedure (i.e. office versus clinic), and using the billed cost to negotiate higher patient and insurance company payments.
9. Governments and health care providers determine prices for medical services using opaque and mysterious methods. For example, the U.S. Medicare payment system releases one magical payment number for each reimbursable expense with no documentation about how that number is derived.
10. Although health insurance companies are starting to cap payments for some types of medical treatments, they are doing so on a fragmented, company-by-company, experimental basis. In addition, they still haven’t come up with uniform standards for pricing medical services and they are still unsure about how to uniformly measure the value of medical services. Public goods knowledge banks, social budgeting, uniform data standards, open source software platforms, and other types of modern information institutions, receive scant attention.
11. Despite all of these data deficiencies, health care researchers and policy makers freely speak of “health care costs and benefits”. In many instances, it’s not clear they know what a single medical treatment costs.

2. Health Care Analysis 1 Tutorial

The full reference for this story can be found in the Health Care Analysis 1 video tutorial at the link below.

This image (HIQA, Ireland, 2010) demonstrates a typical graphic that is used to summarize the results of a HTA. Never complete full data sets without completing complementary multimedia and story support.

Video

Demonstrates how to tie videos to content.

This is a 10 second video used for instructional purposes.

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