The Numbers

How much does a knee replacement cost? It depends whom you ask, and the answer could vary by $60,000. Among the 15 hospitals in the greater Valley region, the average price is $80,707, based on 2012 data, the most recent available, from the Office of Statewide Health Planning & Development. But the price differences are enormous. The least expensive venue is for-profit Pacifica Hospital of the Valley in Sun Valley, at $38,981. The most expensive is non-profit Northridge Hospital Medical Center at $102,446. In fact, only five hospitals charge more than $100,000 in Los Angeles County – and four are located in the Valley. Martin Gallegos, senior vice president at the Hospital Association of Southern California trade group, said multiple factors explain the discrepancy. Hospitals with trauma centers, such as Northridge, are more expensive because care for uninsured patients must be covered by other revenue streams. Also, union contracts and malpractice insurance vary by location. Also, Gallegos noted that insurers negotiate discounts, which vary with each hospital. “Nobody ever pays the full charge for any service in a hospital,” he said. Minda Wilson, owner of Affordable Health Review, an Oak Park consulting firm, said hospitals start with high prices so after discounts and negotiation they receive their target price. “They charge $100,000, but they don’t get paid $100,000,” she said. “It’s all part of the dance they do for reimbursements.” But Jamie Court, president of non-profit Consumer Watchdog in Santa Monica, said people without insurance, those needing emergency surgery at an out-of-network facility, or people whose bills go to collection, see bills start at the full price. “It’s wrong for a price not to reflect the real costs in any industry, but hospitals get away with it,” he said. “I don’t think there’s a good reason why the prices that health insurers pay and what appears on a bill is so different.” – Joel Russell