VI.Cost of Joint Replacement and Cost Shifting by Our Government
In this country the medical payment system is hopelessly complicated. No one fully understands it. We spend incredible amounts of money trying to run it and control it. If you were to enter a hospital and pay for a hip replacement privately, it would cost you $40,000 to $50,000. The government (Medicare and Medicaid) pays hospitals about $8000 and surgeons $1200 for this operation. I have determined that hospitals (using the best joint implants that cost $6000 each) can probably provide the service at a cost of $12,000. I would estimate $16,500 to allow a reasonable profit. 70% of joint replacement patients are covered under Medicare or Medicaid. To make up for tremendous losses from government plans, you can see why hospitals charge so much for the insured population. I estimate my office overhead cost for providing these services is approximately $1500. (That is if my time is given for free). From this exercise, it becomes obvious what tremendous damage the government does as it distorts the payment system. Meanwhile, if you believe the politicians, they have created a great system that does an excellent job of controlling costs. Shifting costs of government provided care to the private sector, a devious, non-transparent scheme would be a more accurate description of their system. I have had to opt out because I can no longer justify paying the government $300 every time I treat a patient on Medicare. You might ask yourself why does any doctor or hospital still participate?
The global prepayment contract was developed to offer joint replacement to anyone who does not have insurance coverage at a reasonable cost. We can offer this because we know we will receive the full payment and we will not have to expend a large amount of resources trying to deal with insurance companies in an attempt to track down late payments. If your insurance company does not have a contract with us or our hospital, they certainly can choose this option as well. However, they must prepay the entire amount. This offer is not valid after the fact.