The Cost of an ACL Injury

by calvinfo • 13 years ago

272 174 13 years ago

tbrownaw• 13 years ago

I was expecting this to be about Access Control Lists being slow or requiring more complex security reasoning (vs owner/group/other). It's not, it's about health care and injuries and something that's part of your knee.

calvinfo2• 13 years ago

Good point, updated the title to be a bit more clear.

skaevola• 13 years ago

Why don't the medical tools get reused? That seems absolutely insane to me.

pkrein• 13 years ago

http://abcnews.go.com/Health/rogue-dentist-exposed-7000-pati...

ianstormtaylor• 13 years ago

Yeah I also don't get that. Would they not be able to just be disinfected and resealed?

dragonwriter7• 13 years ago

> Would they not be able to just be disinfected and resealed?

Blades that need to be very sharp and of very particular dimension are going to need sharpened, which is going to change their dimensions. So there is limited, if any, reusability in any case.

And the keeping, transporting to a cleaning facility, cleaning, sharpening, etc., is going to come with an additional cost cost and risk of accident that you don't have with immediate disposal.

Fomite• 13 years ago

Some can be, some can't be. Many simple, common-place tools are remarkably hard to clean.

In a battle between "Lets save money" and the risk of a healthcare-associated infection, both economics and clinical ethics sides on tossing the tool.

apendleton3• 13 years ago

Some do, and it appears he was only billed for the ones that don't. For blades and other sharp things, it's probably cheaper to just use new ones than to have the equipment and staff to sharpen old ones. Some of the other stuff, I suspect, isn't autoclave-able, which is the standard for sterilizing surgical stuff. That pretty much precludes reuse of plastic things, for example.

gojomo2• 13 years ago

It's very hard to be sure of removing all viruses and prions from a surface... especially if that surface is porous or worn-down from any use.

Deep, long superheating might do it... but that itself can wear or destroy many materials, and the item would need to be kept in 'like-new' sterilization until next use.

Hospitals might not be the best place to try to do that; in 2002 there were about 30,000 deaths in the US due to hospital-acquired bloodstream infections, per the study referenced at:

http://en.wikipedia.org/wiki/Hospital-acquired_infection#Uni...

hga• 13 years ago

I've heard from someone who was involved in this that sterilizing medical equipment that you can't autoclave is seriously non-trivial.

And certainly not free, nor is autoclaving, including the inevitable human errors that will result in incompletely sterilized equipment, plus there are all sorts of tradeoffs made here. I'm just old enough to have had glass syringes used on me, they're thick, heavy and obviously much more easily broken, which is less than ideal for taking blood and the like.

One other advantage of disposables: you can more afford to stock up a lot in case you need to surge after a disaster, they'll get used in the normal course of operations. Whereas the reusable stuff is generally/always? more expensive up front.

jonknee6• 13 years ago

Metal tools seem quite simple to autoclave. That said, they should also be pretty cheap to make (unlike the $900 knife in the article).

timcederman• 13 years ago

I'd be interested in seeing this analysis using what the actual final cost incurred was (normally the fees you are shown are negotiated down by your insurance company to the amount they actually pay).

ISL• 13 years ago

Excellent read.

One point on disposing of fancy, potentially reusable, tools: We do more than a little precision machining in our lab. When a job matters, the shop buys new tooling. It's lower in cost, especially time, than verifying that a tool is sharp and correct.

At first, it seems wasteful to throw away a once-used tool, but if all you do is critical work, you must be certain that your tools are reliable and correct. Once you have a complete set of nice hand-me-down spares squirreled away for coarse work, any subsequent used tools go in the recycle bin.

For the computer-inclined, this practice is no different from taking a perfectly functional linux installation you've used for a little while for a side project and using it on a mission-critical task. It's easier and more reliable to reformat and reinstall than to inherit whatever curiosities might emerge from the past.

When quality matters, provenance matters.

angersock7• 13 years ago

To be fair, you're doing exceedingly delicate machine and test equipment manufacture. The machine shops I know will buy new tools as needed, but reuse them on large job runs--and throw them out once they lose tolerance.

Something like the $900 knife in the article is/could be a mass-produced stamped piece of metal, perhaps sharpened on-site or at the factory; unit cost for that should be easily less than $10.

larrys4• 13 years ago

"Something like the $900 knife in the article is/could be a mass-produced stamped piece of metal"

Very well could be some liability potential wrapped into reuse of a device. After all part of the cost does go toward covering things that go wrong for whatever reason.

If you take the device fresh and something isn't right you can claim it was defective. If it was used for another operation who is to say when something happened to it?

An inverse analogy might be the difference in potential problems from using a hard drive that has been previously used where something is later found vs. using a brand new hard drive.

dragonwriter7• 13 years ago

> The machine shops I know will buy new tools as needed, but reuse them on large job runs--and throw them out once they lose tolerance.

Hospitals aren't machine shops, though, so it would be a significant additional cost to equip and staff them to evaluate tools for reuse.

There's also particular costs around requiring additional handling of used surgical tools rather than disposing of them that may not exist to the same extent with used machine tools.

And its quite possible that even breaing all those additional costs, a large percentage of tools would be out of tolerance or otherwise unusable after being used once, so you'd be paying the additional cost and still disposing of them.

reeses4• 13 years ago

A quick search on ebay turns up, for example, a set of 4 for $35.

They're plastic with (I hope) steel blades.

In general, though, the cost is certification (+ liability insurance) and documentation of provenance. Basically, every time it's touched by a human, add $100, because the person has to be "trained", they have to log any actions they've taken with it, and they have to make sure the certificates go with the tool wherever it goes.

Plus, random upcharge.

MPSimmons• 13 years ago

In the case of medical equipment, the gold standard to prevent contamination from previous patients' biomatter is to use new equipment each time. There's a demonstrably lower rate of infection than even if the equipment is cleaned to approved standards. I believe I should be able to find the paper I read discussing a while back, if you'd like.

dbuxton• 13 years ago

This is absolutely shocking to me. Had my ACL replaced in the UK privately about 8 years ago (no health insurance, paid out of pocket). Total cost was £3000 (+ £600 for initial scan). I could have got it done for free on the NHS but it would have messed up my term time at university.

Like the OP I had meniscal tearing too so more or less directly comparable. (Although obviously 8 years is probably a long time in medical devices so worth bearing in mind).

To put in perspective, that is approximate the same total cost (~$5000) as just _one_ of the pieces of equipment ("Cannula Fast Fix CVD") that the OP lists.

It's one thing if doctors are more expensive because they have to carry higher insurance charges to protect against negligence lawsuits, etc, but that the equipment alone is multiple times the cost seems crazy.

Mental.

apendleton3• 13 years ago

We hear about medical tourism from the US to India, Thailand, etc., but with these kinds of price discrepancies between the US and UK private practices, I wonder why there aren't more Americans who go to the UK for surgery?

twoodfin• 13 years ago

The fraction of patients without insurance but with enough cash and motivation to fly to the UK purely to seek savings on medical treatment has got to be fairly tiny.

My impression is that medical tourism from the U.S. is not typically for cost savings, but rather because particular procedures are either completely unavailable (experimental stem cell treatments) or could require long wait times (liver transplants). I'd love some data on this. Wikipedia's rather poorly written article suggests MT is more popular from countries with socialized systems in order to reduce wait time, but I'm skeptical.

larrys4• 13 years ago

"I wonder why there aren't more Americans who go to the UK for surgery?"

Potential issues with follow up care as one drawback.

dragonwriter7• 13 years ago

> I wonder why there aren't more Americans who go to the UK for surgery?

Because a sizable share of the Americans who could afford even the UK surgery prices plus travel and accommodations to/in the UK also have health insurance which covers the procedure in the US, and makes it cheaper for the patient to have the procedure done in the US even if the total cost is more expensive.

old-gregg• 13 years ago

Similar to my experiences as well. I once compared the price of a knee MRI scan across several countries by calling folks I knew.

This is why I was dumbfounded by the call for "innovation" in medical industry at the end of the post. There's plenty of innovation is going on, it's the corruption and extortion we're looking at here: $60K were simply extorted from a person in pain.

It's a legislation+law enforcement issue.

ry0ohki2• 13 years ago

>$60K were simply extorted from a person in pain.

Or more specifically from all of us. The author only paid $2400. The whole system is designed to be opaque and non-competitive so they can just bill insurance companies for whatever. I wonder what it would have cost if he said he was paying in cash (hint: a lot less).

chudi2• 13 years ago

I got my ACL replaced in Argentina and the cost including rehab was about U$S 3000 having one of the best insurance companies (about 120 U$S a month). If I wanted to use the public care, it could probably cost almost nothing.

It always amazed me that in the US the health of a person is not a right and if you get hurt doing anything you have to pay huge fees.

pyre5• 13 years ago

That's because in Libertarian Utopia everyone of importance will be independently wealthy, and those who aren't, deserve to be trampled by the others. /sarcasm

sp332• 13 years ago

How can you guarantee the health of a person? Doesn't that incentivize risky activities? If someone else will pay to stitch you up if you get injured, or cover your drugs if you get sick, or keep you going in your old age if you make terrible long-term lifestyle choices: wouldn't that skew the overall population toward cheaper, more convenient, or more fun decisions at the expense of the state?

danielweber3• 13 years ago

We don't really have any price signals for the vast majority of our health care system, when in reality only a tiny minority of it is hard to price (emergency care is hard to price).

rayiner4• 13 years ago

Medical liability costs are about $55 billion in the U.S., or about 2.4% of overall costs: http://www.hsph.harvard.edu/news/press-releases/medical-liab....

There are debates about how much "defensive medicine" adds to the cost, but those aren't all that relevant here since the costs presented are exclusive of additional tests, etc.

dclowd99012• 13 years ago

Overall costs: 2.291 Trillion

$7,638 per person per year. That just can't be right. I and 90% of the people I know haven't made a significant trip to the dr or hospital in years. Where the fuck is that money going?

thrownaway2424• 13 years ago

We know that liability is a non-factor, because in states with capped liability, health care costs have not responded.

jwr• 13 years ago

For comparison, the full cost of a hernia repair (http://en.wikipedia.org/wiki/Inguinal_hernia_repair) in a private hospital in Poland is below $1500. Sure, this is a much simpler procedure than the OP's one, but still -- it involves an operating room, a surgeon, an anesthesiologist, assistants/nurses, and 2 days of hospital care. I don't imagine the materials are much different to the ones used in the US.

Even accounting for the lower cost of labor, the prices in the US are insane.

Komodo9• 13 years ago

I don't know the statistics overall, but in my case the comparison of the inguinal hernia repair is even more damning: I'm positive it was more costly, but to add insult to injury, it (my hernia repair) was done as an outpatient procedure.

Although I am not a doctor (just a patient), if anyone tries to pitch you this as a good idea, run. The effective recovery time was insane, and not to mention the pain/temporary disability (also insane). An inpatient stay wasn't even offered, but in hindsight it shouldn't have even been optional.

By contrast, an unrelated abdominal surgery a few years later, despite being a much more involved procedure, had a much faster recovery. (10 day inpatient stay + probably 5 days of that with some physical therapy.)

Health care costs are a secondary issue to me, right behind health care quality. Unfortunately, I don't think either can be fixed unless they are entirely divorced from each other.

bluedino• 13 years ago

It was $1,600 have ACL surgery on our dog. Think about that one for a while.

systematical• 13 years ago

Crazy, but dog lifespan is considerably less. How long does the repair really have to last for?

jordan0day2• 13 years ago

I doubt that has a significant impact on the cost of the procedure, though, right? I mean, sort of like replacing the clutch on a car -- the cost isn't (necessarily) based on the lifetime/quality of the new clutch, but rather the labor required to pull the engine, install the clutch, button everything back up.

ChaseB• 13 years ago

$1,600? My Saint has had two TPLO's, which is the most common surgery for an ACL(CCL in canines) tear. Each Surgery was $5,000+. You got out on the cheap!

Having said that, still 1/12th of the OP's bill.

r00fus• 13 years ago

Pet insurance. Some companies provide this benefit. One of the reasons we never got a pet, though my kids would absolutely love one.

maskedinvader• 13 years ago

this is an amazing article for me since I also tore my acl and am considering getting the reconstruction described in the article done, any one out here who recommends/ does not recommend this ? I am developer with a 9-6 desk job and usually go jogging rarely and don't find time to work out due to a busy schedule

medell2• 13 years ago

If you don't plan on playing semi-competitive sports ever again, I wouldn't recommend surgery. It's all about the planting of the foot and changing direction, which you don't do with straight line activities like running or biking.

Forget about working the first week after surgery. You need to elevate and extend your leg constantly for the first few months, which gets uncomfortable when sitting.

Pre-surgery you need to strengthen the muscles around the knee to speed up recovery, so my physio got me to go to the gym 3X a week for two months, biking hard. Post-surgery you need to use some gym equipment as home rehab doesn't cut it.

Also it takes two years to fully heal. After seven months I could hike and bike, but now I'm sixteen months in and only now have started to play light competitive sports again. However mine is more complex as I have torn miniscus and some residual scar tissue that may be removed in the future. Let me know if you have other questions about the process, it's a long one!

showerst• 13 years ago

One thing to be aware of in how all of this stuff works; oftentimes medical billing codes don't map 1:1 to exactly how things work in the hospital, so the medical staff puts together a statement of everything they did, and then the billing staff (approximately) maps it to billing codes.

This means that they'll overshoot on some codes to make up for other acts and overhead that doesn't have an exact billing code, and every medical provider has different places that they'll overestimate, and by different amounts.

Additionally, as most people know, the billed amount is usually FAR in excess of what the insurance company actually pays.

I'm not in the industry so I may be off base here, and someone who is can correct me, but I just finished Oreilly's excellent ("Hacking Healthcare") which is about how patient services and billing work.

danielweber3• 13 years ago

http://www.thedailybeast.com/articles/2013/02/22/how-hospita...

His expense report comes back from accounting with everything approved except the umbrella. He appends a note to the report explaining that the umbrella was destroyed in the line of duty and resubmits. Back comes the expense report, with a rather severe note from accounting to the effect that umbrellas are not on the list of allowable expenses.

...Our frustrated manager tears up the old report, then sits down and fills out a whole new form: $3.94 for lunch, $12.75 for laundry charges, and so forth. Which he sends to accounting with a note attached: SEE IF YOU CAN FIND THE UMBRELLA NOW!

matwood3• 13 years ago

I had mallet finger once and they coded it as a broken bone with the associated costs. They wanted to charge me for a full broken bone and typical time spent with hundreds of dollars of costs when all the doc did was spend 5 minutes, give me a plastic splint and tell me to not bend the finger for 8 weeks.

After many phone calls I finally got someone on the phone who realized how idiotic the code was and changed it to something more reasonable to the service rendered.

bjhoops1• 13 years ago

I had this exact same surgery 7 years ago after tearing ACL/meniscus playing basketball. Patellar tendon graft FTW! (I joke that real men donate their own tissues)

For me, the ACL has been perfect ever since. Wish I could say the same for my meniscus and cartilage - I subsequently tore my meniscus 2 more times (each time in a non-vascular area so they just sanded it down, no sutures like you had), and then 5 years later I tore a chunk out of my articular cartilage that had probably been weakened years before when I did my ACL.

That led to an OATS procedure where they took bone plugs from a non-weight bearing part of the knee and transplanted them in holes bored where the lesion was. That last procedure was pretty fun as it entailed 6 weeks on crutches, non-weight bearing, during which period my wife and I had our first kid (yay for timing!).

Anyway, that just to say hang in there (I imagine your rehab is pretty much over by this point, but it probably still aches?), and I hope your ACL graft (good call with the patellar) holds up as well as mine and your meniscus better. Oh and enjoy the achiness that comes with changing weather. I was rather amused that that apparently is a real thing. :)

goronbjorn2• 13 years ago

When I was in college, I couldn't afford health insurance (no parents + financial aid does not cover it). I played rugby (generally not the safest sport) for two years, in addition to playing pickup basketball all four years. I very fortunately did not sustain any major injuries.

Six months after graduating (and getting a job with health insurance), I tore my ACL while playing pickup basketball. The costs were as insane as outlined in this post, but, again, I had health insurance. However, to this day, I'm horrified at the thought of what would've happened if I'd sustained the injury in college when I didn't have health insurance. Shame on me for putting myself in those sorts of situations, but it feels like there's something wrong when the penalty is so harsh.

dionidium• 13 years ago

You wouldn't have paid anything like $68k. As mentioned in the article, those prices are inflated for charging the insurance company, who in turn negotiates a much better actual price. Similarly, the hospital would have likely worked out a better deal with you. Or, if you qualified (and it sounds like you would have), then Medicaid would have initially picked up the tab and they would have negotiated a better deal for themselves.

In none of these scenarios does anybody actually pay the made-up $68k number.

secabeen• 13 years ago

The hospital would have worked out a better deal with you if you asked. However, if you don't ask, and just put yourself horribly into hock to pay them, they'll take the money. Likewise, if you refuse to pay, and they have to go to collections or the like, they'll apply the full, inflated amount.

goronbjorn2• 13 years ago

That's true, though even 10% of that number (more than twice the out-of-pocket cost with insurance) would've been financially crippling.

medell2• 13 years ago

I had ACL & torn miniscus surgery 16 months ago and live in Canada, here are my experiences (excellent breakdown btw). It changed my life in many ways, but that's another story.

Though surgery is voluntary and I injured it playing soccer, the operation is covered by Medicare (which is a mandatory $64/month as I am self-employed).

So not including opportunity costs for missed work and time for pre and post-op doctor's visits (about 8 of them), my costs not covered were: - Post-surgery pain killers: $30 for T3's for a week. I refused the Percocet's, although the pain was bad I could still sleep. - Physio visits. They'd have you 2-3X per week for the whole duration if they had it their way, at $70 per appointment. I can't afford that, so I went once a week for three months = $840. - I declined the $900 custom knee brace that helps you get back playing sports sooner. - Rental of crutches for two months $25

And crutches are NOT as easy as I once thought, when you'd hop around on hour friends crutches for a few steps. I'm pretty fit, but a few blocks in them has you sore and sweating. Take care of those knees!!

tomwalker• 13 years ago

Wow, so much of that is overpriced.

The medication costs, especially the fluids, are much higher. I checked a UK pharmacy for costs for buying small amounts so the discount they get for buying in bulk suggests a very large mark up in price.

stonemetal2• 13 years ago

Did you include the cost of having a trained medical professional administer them? The cost of hospital aspirin isn't the pill it is the doc deciding to give them to you and the nurse who dispenses the pills( don't forget the billing person who charged you for the pills, the staff lawyer who was retained just in case you sue over the aspirin, and the payout to the last guy who sued and won).

As with every service industry from the local pizza joint on up COGS(Cost Of Goods Sold) is one of the smallest parts of the pricing puzzle.

DanBC4• 13 years ago

Is the cost of staff included in the cost of the meds, or elsewhere? Are they double-billing for staff costs?

gojomo2• 13 years ago

I also had my ACL replaced (hamstring autograft), in SF, about 2.5 years ago after a basketball injury.

I'm pretty sure these prices are starting 'list' prices, whereas the negotiated/'allowed' cost that you and your insurance company actually wind up paying tends to be 1/2 to 1/3 these numbers.

My surgery was also about 3 months after the injury, which isn't optimal. It took me a few weeks to see a doctor, I didn't like the 1st doctor I saw, and by the time I'd settled on a preferred one, I needed 6 weeks of physical therapy to undo some of the post-injury weakening of surrounding muscles. (Since there's also atrophying due to surgical damage and post-surgery immobilization, it's best for recovery for the muscles to be as strong as possible going in. So diagnosis/surgery ASAP after injury, with muscles nearly at their pre-injury best, is preferred... if you suspect your ACL is torn see a doc quickly!)

taude• 13 years ago

I saw a doctor right away, but they still wanted to wait a month until ACL reconstruction surgery (cadaver achilles heal) so that all the mobility could be returned before the operation to help speed up the post op rehab.

matwood3• 13 years ago

Depends. An ACL tear can feel better on it's own after a few weeks assuming you don't go running into any hard direction changes. Many docs would prefer pre-hab prior to surgery in order to get maximum flexibility and strength for every patient, but most insurance will not pay for it.

omaranto• 13 years ago

ACL stands for Anterior Cruciate Ligament. (In case I'm not the only one who didn't know and was surprised to see this was never mentioned in the article or the comments.)

milesskorpen3• 13 years ago

A few things to consider:

1) You can't turn an operating room immediately. A 1hr surgery requires significant prep time _AND_ cleaning time. These rooms are used for many different kinds of surgeries — changing everything takes time. To make matters worse, each surgeon has their own preferred set up, and it needs to match that.

2) All medical supplies are expensive in part because your body is pretty sensitive, and you need to be careful about what's in there, but also because doctors almost always have _COMPLETE_ control over what equipment they use ... including screw and tool brands. This means that hospitals have little-to-no leverage to get lower prices. This is particularly true for implants & other complicated equipment.

3) Insured people subsidize the uninsured.

angersock7• 13 years ago

So, it sounds like we need to stop coddling the doctors and standardize on a particular set of tools.

gaius• 13 years ago

And you thought emacs vs vi was bad...

epmatsw• 13 years ago

The issue with that is that no hospital is willing to be the first.

Hospital: We're going to lower costs by not letting doctors choose their equipment.

Talented surgeons: Welp, don't want to work there.

Patients: Why would I go to the hospital that doesn't have any of the good surgeons?

DanBC4• 13 years ago

So, I have a few questions.

> Going in, I had anticipated that doctors would take the lion’s share of the costs. I was surprised when the facilities ended up being the dominant cost; over 40% of the total.

Is that because you're paying for the cost of nurses here, rather than breaking that cost out elsewhere?

> This centimeter-wide cutting machine cost $900 according to the price sheet.

That seems to be a bit much. I'm used to silly prices for tools and equipment in electronics, but still. Perhaps they're charging you for the whole tool, and not just the disposable blade? (Which would seem to be a bit cheeky.) Have you tried to get a price quote from anywhere else? (http://www.arthrex.com/products/AR-2285-10) Because they sometimes turn up on Ebay (http://www.ebay.com/itm/Arthrex-AR-2285-10-Parallel-Device-1...)

> but the blades get thrown out after just a single use

One reason for that, at least in the UK, and maybe this is historical, is because of diseases like CJD.

But as ISL said a sharp blade is a good blade and when you're slicing people you want the best blades you can get.

> Most of the other drugs cost between $40-60 per dosage.

In England everything is free at the point of delivery. Medications are a bit different. If you're in hospital they're free. Most people get exemptions from paying. The people who do pay need to pay about £7.50 per line item per month. There are discounts for people who need a lot of meds.

> The screws and washer are made out of titanium. I haven’t had any problems with MRIs or the metal detectors at the airport, but they do show up very clearly on my x-rays:

When my father died he had left me his artificial knees in his will. Luckily he had also asked to be cremated, so it was nice and easy to get them.

What I'm particularly curious about is why this market doesn't seem to work.

Insurance companies want customers to pay them. Insurance companies don't want to pay too much to hospitals because that's cutting the margins. So why don't insurance companies seem to be driving the costs down? Are insurance companies equipped to investigate the costs reported by hospitals?

Some kind of anonymised crowd-sourced data would let people know if their operation was around the same price as other people were paying. Perhaps you'd need to break the price down so people were able to compare similar things.

I hope your knee heals well and that you start to feel the benefit of that surgery!!

jordan0day2• 13 years ago

> So why don't insurance companies seem to be driving the costs down?

They are driving down costs -- as the OP mentions elsewhere in this thread, while he was billed nearly $49k for facilities/equipment, the insurance company only paid $15k.

There certainly are a lot of rich doctors and hospital executives who are being paid ludicrous amounts of money (especially considering the hospitals themselves are billed as not-for-profit), but the insurance companies are making money hand-over-fist in the current regime.

DanBC4• 13 years ago

That feels, and I'm not sure what the right word is, "corrupt"?

aidenn0• 13 years ago

The easiest way for insurance companies to drive costs down is to find technicalities to not have to pay at all for the most costly ~.5% of their customers and stick them with the bill.

dredmorbius• 13 years ago

I'm presuming CJD refers to Creutzfeldt–Jakob disease.

Sometimes it's preferable to spell out acronyms. Especially obscure ones, likely unfamiliar to the readership of a given site.

DanBC4• 13 years ago

Yes, you're right. I'll remember for next time!

tylee78• 13 years ago

this is an industry not just ripe for disruption but instead ripe for some anti-trust laws and investigation for fraudulent behavior

dr_• 13 years ago

Interesting read, and a valid criticism of the costs associated with ACL repair in the US. It would be nice to know, however, how much your insurance company actually paid for the procedure. There's probably a large discrepancy there.

My own thoughts are that if there were a true free market for healthcare, with insurance only for real medical emergencies, the costs of a lot of these services would drop, including physician fees, equipment etc. Most of the population would not, and likely could not, pay 68,000 for an ACL repair, which would leave medical providers the option of 1) lowering prices substantially or 2) being out of work. Having put ourselves on high deductible health plans, we are super vigilant now about how we spend our healthcare dollars. And having realized the impact of this, since we are medical providers ourselves, we are now transitioning to a model where we are not participating with many insurance plans, but our fees will be completely transparent - published online - and fairly reasonable (I think).

calvinfo2• 13 years ago

You're right, there is a discrepancy and I didn't think to put it in the article.

I couldn't find the doctor's charges on-hand, but the total cost for the facilities/drugs/equipment was $48,851.82. The insurance ended up paying $14,742.88 of that post-adjustments.

kenrikm• 13 years ago

$14,742.88 is the real cost since hospital are running off of the income from what insurance actually pays. if average people were able to pay the "insurance adjusted price" for most things they would not need insurance for most things.

djloche• 13 years ago

There's a slow trend toward doctors not taking insurance. A few of the higher profile cases have seen private practices reduce their prices between 50% and 80%, while still making a very healthy profit. For those that need charity care, they're actually able to provide it due to having a huge block of resources (time and money) not being tied up dealing with insurance claims.

I commend your move toward transparent prices for the services you provide in the medical industry.

larrys4• 13 years ago

"with insurance only for real medical emergencies"

You then have people putting off preventive care, tests etc and then you have to cover a bigger problem down the line.

I'll give you an example. You are a landlord with a tenant and you tell the tenant "you have to take care of minor repairs I will cover anything major". As a result they don't do normal maintenance either because they forget, don't care, who knows. Then because of lack of that maintenance the compressor fails on the HVAC and you end up having to replace a unit. Good luck with trying to tie that to the lack of maintenance. Or saying you won't cover it.

harryh2• 13 years ago

That is an interesting hypothesis. There is, however, very little evidence to support it.

kqr2• 13 years ago

The idea is to have the right incentives in place. The premium for medical emergency insurance would go down as you are more proactive in your healthcare.

For example, by having an annual physical, maintaining your weight, etc. you would get a discount.

yummyfajitas• 13 years ago

You pay $100 for preventative care now to avoid paying the $5,000 deductible down the line.

zsiddique• 13 years ago

I am actually 4 months out from my own ACL surgery, tore mine skiing and one thing the OP forgets to mention is many insurance will never pay that $60k as they have pre-negotiated rated with the hospitals and doctors. My surgery was done in SF (not the cheapest city in the world..) and according to the bill came out to just over 100k, but, my insurance paid 17k. What happen to the rest? Well I assume it was just inflated costs that the hospitals adds to the bill so the insurance can negotiate down.

pbreit• 13 years ago

Is there any way to get data about how much insurance companies actually pay? I'm assuming it's different from amount billed.

yohann305• 13 years ago

Coming from the mobile app market where consumers are reluctant to spend 99 cents on your app/game, this is revolting. Something has to be done (in the medical field and in the mobile app field as well)

pkulak2• 13 years ago

It seems to me that the balance of power has shifted far over to the providers and away from the insurance companies. Would allowing more mergers give them more bargaining power and bring these costs down? Or is that just too simple?

danielweber3• 13 years ago

There is a lot of cultural resistance in the US to any kind of price pressure on health costs. This problem will exist regardless of whether you have a private or government system.

dragonwriter7• 13 years ago

> It seems to me that the balance of power has shifted far over to the providers and away from the insurance companies.

That's because you are looking at an accounting of the nominal charges, and not what the insurance actually paid. If you look at what the insurance actually paid based on those nominal charges, you'll see that the balance of power isn't where you think it is.

pkulak2• 13 years ago

Oh yes it is! I know exactly what my insurance company's negotiated prices are (because I pay them!) and they are astronomical. I just had an emergency visit and the nominal charge was $1700. The negotiated charge was $1500. That's _nothing_. I added up the medicare schedule prices for the entire visit and it was about $350. So, yes, a large insurance plan (like medicare) seems to be able to negotiate far better than my insurance company.

whafro2• 13 years ago

The most useful aspect of this article is the pie charts and line-item comparisons. Ignore the dollar amounts themselves. Why? Because almost no one pays that. Why?

- In California, MediCal (state-wide health insurance safety net) pays about 20% of the cost (not price) of treatment for those without insurance. So if a surgery costs $10k, MediCal says "Here's your $2k. That's all you get."

- Nationwide, Medicare pays something closer to 90%. Much better, but still a loss to the hospitals.

- Insurance companies negotiate with hospitals, but (from what I've heard) generally pay 115-125% of the cost, giving hospitals a 15-25% margin. Certainly better, but not necessarily making up for the above.

- Some patients with no insurance, especially at major academic medical centers, are rich folks looking trying to get the best care in the world for something particularly complicated. UCSF in my neighborhood even has an in-house Saudi liaison for Saudi royals. These folks pay the full rate, which may represent an enormous markup, which does help subsidize the care of the top two categories.

For those without insurance, who don't have the money to pay the full fare (meaning you're not a foreign prince or similar), you're going to get freaked out by the bill, which is based on the last category. But in reality, the moment you ask a billing person about the costs, you'll almost always get knocked down into the insurance rate tier, just for asking. Show proof that you have next to nothing, and you could get well down into MediCal levels.

In order to get the ultra-rich to subsidize the patients that generate the loss, the price card needs to be high. Really high. So they give breaks to everyone else, since you can't do it the other way -- "Oh, you look rich, so we're going to charge you double the rate sheet."

This doesn't happen in community hospitals quite as dramatically, since they don't have the ability to handle the crazy conditions that will result in the high-revenue customers. So their rack rate for an ACL will be at the low end, while the academic medical centers that offer the $2MM neurosurgery will have rack rates for every procedure on the high end.

Is it messed up? Sure. But does it mean that normal people are paying $65k for this ACL procedure? Usually not.

danjayh• 13 years ago

This is true, but often the discounts aren't as steep as you'd think. I had a mitral valve replacement a couple years back (at age 29, due to a one in a million condition), and the insurance company was billed ~350k for the surgery + recovery in hospital. Even after their discounts, the total still came to $~250k (this is not the normal price - I had a complicated recovery, and spent an abnormal amount of time in the cardiac ICU). I, however, only had to pay ~$4,500 or so (high-deductible plan).

whafro2• 13 years ago

Yup, and if course it varies. Complications are a huge driver of costs, so making marginal improvements to the complication rate (either by improving the standard of care OR by insisting that you go to a place with a low complication rate) can have an outsize impact on the cost of care in the aggregate.

Companies like ConsultingMD (horrible name, http://consultingmd.com) are taking this approach to reducing costs.

gregcrv• 13 years ago

here a link to compare the cost of the same injury in France:

http://blogs.wefrag.com/Naudec/2011/11/05/rupture-du-ligamen...

basically it's about 7559 euros all inclusive (MRI, etc..)

djulius• 13 years ago

In fact, in the link you provide, the 7559 euros also cover 75 sessions of physical therapy, a nurse coming at home every working day during a month and various drugs.

It would be interesting to have a global comparison (operation+therapy).

Here, the operation including all appointments before is about 5274 euros.

stevewilhelm• 13 years ago

Earlier this month in NY Times: Hospital Billing Varies Wildly, Government Data Shows http://www.nytimes.com/2013/05/08/business/hospital-billing-...

dkl• 13 years ago

Achilles tendon harvested from a cadaver

Yeah, I wouldn't recommend this route, either. I read an article in The New Yorker about body parts harvested from cadavers that were used in transplants. The parts were way past their harvest-by date. This was discovered, at least partially, by someone having an ACL transplant from one of this bad parts, and the recipient of the bad part died from bad infection due to a mold on the tendon.

The lack of controls on that business forever made me wary of using cadaver parts for transplants.

matwood3• 13 years ago

The lack of controls on that business forever made me wary of using cadaver parts for transplants.

I didn't know that, but cadaver parts freak me out so when I had my ACL done I did the standard patellagraph. If I tear the same knee again I'll have to go cadaver or hamstring, but hopefully that never happens (knock on wood). The problem with the hamstring is it never quite heals as strong.

As an aside, pro-athletes typically go cadaver because the time to heal can be quicker. They probably aren't getting bad ones though.

urbangangster• 13 years ago

Great Read

chrismealy• 13 years ago

I saw "ACL injury" and my first thought was "ultimate frisbee."

jostmey• 13 years ago

Here is an idea for an awesome law that might fix some of the problems with the medical industry! Remove the ability of the billing departments to determine who has insurance and who doesn't. That way, everyone is charged the same amount for similar procedures. The whole practice of over-billing insurance companies has simply become ridiculous.

Why do the insurance companies tolerate this practice?

chinpokomon• 13 years ago

I had my ACL repaired in 2007. I don't remember the costs any more, but I had essentially the same procedure using my patella and a meniscus tear repair. While I was able to put weight on my injured leg and was out of physical therapy after only a few months, it has taken several years to "fully" recover; even then I have the occasional gentle reminder that my knee is not the same as before my soccer mishap.

drdoc2• 13 years ago

I would like to pose a question to the Hacker News community. If you had to, where would you cut costs? Do you think doctors are paid too much? Or nursing staff? Obviously, we think these services are overbilled but the reality of it is that most of these bills are not paid at all or paid for a fraction of what is billed.

bayton• 13 years ago

Great read. Very well researched and written.

As a side note, medical insurance much like construction is a 'cost-plus' industry. The insurance companies actually have incentive to make prices go up.

For example, insurance companies are required to spend 80% on medical expenses. So if cost of an ACL surgery skyrocketed $100,000 then, they would make $20,000 off of it. Instead, they only made about $14k off of Calvin's surgery.

harryh2• 13 years ago

The insurance company didn't pay that much.

This article is silly.

Our health care system certainly has lots of problems but at least know how it works before sharing commentary on it.

cstrat• 13 years ago

Reading the article my knees both began to ache and I started to rethink my choice of sports - squash and indoor soccer...

chm• 13 years ago

For the sake of clarity:

Tendons link muscle to bone; Ligaments link bone to bone;

He tore a ligament, and it was replaced with a ligament, not a tendon.

tsycho• 13 years ago

(I am slightly hesitant to publicly share info like this, but what the heck...for science!)

I tore my ACL 1.5 years ago playing soccer, and went through a similar surgery as the OP at NYU Langone Medical Center in New York. Interestingly, my final bill for the surgery (including the same things as the OP) was almost the same - $67k and change.

However, more importantly, the actual amount paid to the doctor/hospital etc. was $18k, of which I think I had to pay around $2k, insurance covered the rest. So while the sticker price might be $67k, the actual cost is significantly lesser. In the bills that I saw from my insurance company (BCBS), for each line item, they would have a column for "Allowed Amount" or something like that which generally varied between 20-30% of the billed amount.

On a different note, I don't whether the cost would have been the whole $67k if I was uninsured. I hope not. But if yes, that's really punitive to the people who can least afford it. For that matte, even a 18k cost is prohibitively expensive for someone who cannot afford insurance.

smartician• 13 years ago

The way understand it, yes, the uninsured person would receive the $67k bill, but can then go and negotiate to lower the amount payable. Insurance companies just did that negotiation beforehand and have a standing agreement with the provider. All of this reeks of huge inefficiencies to me. There are people at both the insurance companies as well as at every health care service provider whose full time job is to negotiate rates with each other?

rsanders2• 13 years ago

I've been in this situation, and there is no comparison at all. Nobody but the very wealthy can afford to pay out of pocket for healthcare. A single, minor injury can cost you $50,000 - $100,000. A chronic condition, cancer treatment, or major surgery can easily head north of $1 million.

Sure, you can try to negotiate pretty much anything. But what kind of leverage do you think you have? Insurance companies can put many millions of dollars of revenue at risk with the threat of dropping a stubborn healthcare provider from their network.

In contrast, your negotiation position is A) please? and B) I may be forced to declare bankruptcy, in which case you may or may not get your money. If you have enough assets, then option B is basically another form of A: "please, don't take away my house or the savings I've spent my life earning." The bigger your bill, the greater the incentive to deal with the annoyance involved in collecting from you. The likely consequence of your personal financial ruin doesn't enter into their calculations.

elfinforest• 13 years ago

great presentation and vibrant discussion. I wonder: how much attention does this article owe to effective use of highcharts, a clean palette, and freight sans pro? Not knocking, just wondering.

ams6110• 13 years ago

I wonder how the cost would compare at a special-purpose orthopedic surgery center vs. a general hospital? I actually thought that otherwise healthy people are encouraged to utilize specialty facilities rather than hospitals as they can be optimized to the procedures performed, and may have lower risk of post-op infections.

sourishkrout• 13 years ago

Had the same procedure done and paid equally as much. I was shocked how much it cost.

lobe• 13 years ago

This is amazing to me. I am from Australia and did my ACL when I was 15, and the cost was around $3000. It was an overnight stay in hospital, the only costs not incurred for the actual surgery and operation were MRI's and physiotherapy. How that could cost 20x the amount in America, I could not possibly fathom.

It is always a struggle for me to understand how health insurance is such a major expense in America, but when relatively routine surgery such as an ACL repair costs that much, things are put into perspective.

ameen• 13 years ago

I ruptured my left ACL during the final year of our college during a cultural fest (in India). It was a complete tear and required surgery to return to normal knee movement (Instability due to knee cartilages tears/injuries suck, and lead to further secondary injuries).

I had to differ my surgery for a couple of months since we had our final exams and I had to walk with a brace and avoid injury-causing activities. The surgery at one of the leading hospitals in the country cost me around ~$3000 and was completely covered by my Health Insurance, the care I received was exceptional and I could see why "Medical tourism" to India is on the raise. The costs are mostly around 1/10 of what any procedure costs elsewhere.

P.S. Incidentally, I had a freak accident a few days back and I'm positive I tore one (or many) of my ligaments in the other knee, and I had just started training to run a marathon within the next year :( (Lady luck hates my knees)

cncool• 13 years ago

Had ACL repaired privately as a Canadian and the total cost was around $7000

adamconroy• 13 years ago

There is a cost in not getting your ACL repaired. I waited 4 years (due to the fact that the buffoon physios / doctors I saw didn't diagnose it correctly) and put on 20kg in the interim because I stopped playing sport.

jwatte• 13 years ago

I'd like to see the actual negotiated rate the insurance company paid for those items. I'd be surprised if it was more than 40%, and perhaps it might be less?

It's quite bad that those who can afford it the least pay the highest(sticker) prices, though. If Obamacare fixes that one thing, it's done the US health care world good!

louischatriot• 13 years ago

The article ends with "this sector needs innovation". Even though it does, what it really needs is better (and tighter) regulation. The situation in the US (costs through the roof, a lot of people that can't get medical care), health is something that can't totally be left to the private sector.

topbanana• 13 years ago

ACL Graft Knife $900

Here is a pack of 4 on ebay for $35 http://www.ebay.com/itm/ACL-GRAFT-KNIFE-10MM-REF-232110-DEPU...

ck2• 13 years ago

I dunno about the surgery time which is probably the only overpriced thing worth the money if done right but WTF is this?

   First 30 minutes in the post-anesthesia care unit  $2,057
   Additional time in the post-anesthesia care unit   $3,894

What exactly cost $6000 ? Laying in a room? Seriously? Like you have a choice - which is probably why.

australis• 13 years ago

Interesting to read of a 'normal' person sustaining an ACL injury and the subsequent fixing thereof (especially detailed costing breakdown - thanks for the detailed analysis). There has been somewhat of an 'epidemic' of ACL injuries in the AFL[0] this year. So far at least 15 players, some of them quite well-known, have succumbed to a season ending ACL injury already[1], much more than previous years. The difference? They have access to a complete rehabilitation package of priority surgery and follow up physio program. Such is the professional sports industry I suppose...

[0] Australian Football League; http://en.wikipedia.org/wiki/Australian_Football_League

[1] http://www.abc.net.au/news/2013-04-29/afl-acl-injuries-2013/...

wild91• 13 years ago

I had ACL surgery in November in Italy and it costed 2200€(I did not pay anything we have public health care luckily). US health care system is just crazy in my opinion.

akandiah• 13 years ago

Contrast this to the cost of a typical ACL injury in Australia: http://www.injuryupdate.com.au/forum/archive/index.php/t-801...

The Cost of an ACL Injury

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