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Same surgery, different surgeon: huge variations in out-of-pocket costs for orthopaedic operations

Tuesday, 15th August, 2017

Private patients could have no out-of-pocket costs for orthopaedic surgery or incur thousands, depending on their surgeon. Photo: Stock

SOME surgeons are charging thousands of dollars more than their colleagues for the same orthopaedic operation, leaving patients with up to $5500 in out-of-pocket costs.

Paying for a return flight to Adelaide for a hip or knee replacement would, in many cases, be cheaper than seeing a Sydney or Melbourne surgeon, an impractical hypothetical revealing the huge variations in surgeon fees across Australia.

A Medibank report detailing the vast disparities sends a clear signal to patients to shop around for their doctor, taking into account out-of-pocket fees, complication rates and expertise.

The average cost of a hip replacement varied by more than $20,000 ($19,439 to $42,007) depending on the surgeon, showed the joint Medibank and Royal Australasian College of Surgeons (RACS) report of all orthopaedic surgeries funded by the health insurer between 2014-2015 and 2015-2016.

For a knee replacement, the average cost ranged from $17,797 to $30,285, and knee anterior cruciate ligament (ACL) repair ranged from $5076 to $13,950.

Out-of-pocket costs fluctuated by thousands of dollars, depending on the choice of surgeon, the review of close to 28,000 surgeries released Tuesday found.

Just over one third of surgeons charged no out-of-pocket fees. Among the surgeons who did, their average out-of-pocket bills were as high as $5567 for a hip replacement, $5137 for a knee replacement and $2907 for a knee ACL repair.

Medibank chief medical officer Dr Linda Swan said the report should encourage patients and referring GPs to do their research before settling on an orthopaedic surgeon.

"There is a lot more to selecting a doctor than taking the first person that is recommended to you," Dr Swan said.

"[Cost] should be part of the referral process. They should be asking questions like 'What is the expertise of this doctor?', 'How many procedures have they done?', 'What costs will I incur?', 'What hospitals will this doctor be able to walk right into?' "

The report should also prompt health authorities to investigate the causes of the vast disparities.

"When we see large amounts of variation, then somewhere along the line something may not be working well ... whether it's waste, or not having the appropriate standards of even errors in the health system.

"It really should cause people to stop and ask questions."

A state-by-state breakdown of out-of-pocket costs also found wide variations between states and territories.

NSW surgeons charged $2673 on average in out-out-pocket costs for hip replacements, almost five times that of South Australian surgeons. Victorian surgeons charged $1997 on average in out-of-pocket costs.

The out-of-pocket cost for a knee replacement in NSW was $2499 compared to $1609 in VIC and $397 in SA on average. For ACL repair, out-of-pocket costs were $2248 in NSW, $1671 in VIC and $321 in Tasmania.

"What are the reasons surgeons charge higher out-of-pocket costs in NSW than, say, South Australia? It could be overheads are a lot higher. Maybe there is some justification to it, or it could be that people are prepared to pay more in NSW so surgeons charge more," Dr Swan said.

The report – which does not identify the doctors – also found stark differences in the rate of complications, climbing as high as 400 per 1000 hip replacements, suggesting some surgeons had as many as one complication for every 2.5 hip replacement surgeries they performed.

For knee replacements, the complication rate ranged from zero to 200 per 1000 surgeries, and 30-day readmission rates for ACL repair varied from zero to 20 per cent.

High complication rates could be partly due to some surgeons having small patient numbers or treating a very sick patient group with complex conditions, or they were not performing as well as their peers, Dr Swan said.

The rates of referral for rehabilitation between surgeons also varied widely.

Some surgeons sent none of their hip or knee surgery patients to rehabilitation, while others sent every patient to rehab, suggesting a doctor's preference rather than a patient's condition determined their chances of referral.

"You really have to stop and ask 'Why would this be?' " Dr Swan said.

Dr Swan hoped surgeons would use the data to improve their practices, but "other levers could accelerate change", including introducing regulations and agreed standards about cost and referrals.

RACS president John Batten said "This is about looking at the quality of care in the system and how we can use these reports as an educative process: where there are surgeons that are outliers, how can they improve their practice in line with their peers?

"We are committed to continuous improvement in clinical practice in Australia," Mr Batten said.


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