Joint replacement prices at the most costly California hospitals plunged by one-third after the state required its workers and retirees to pay out of pocket all costs above a “reference price” of $30,000 for orthopedic surgery, a new study said.
The average cost of joint replacement among high-priced hospitals dropped to $28,465 after the California Public Employees' Retirement System made the change in 2011, wrote University of California researchers James Robinson and Timothy Brown in the journal Health Affairs. That's down from $43,308 the prior year.
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Watch out, community hospitals. The proposed merger between Tenet Healthcare Corp. and Vanguard Health Systems is expected to increase pressure on already-struggling stand-alone facilities in the markets where the two chains operate.
While the deals, Moody's Investors Service says the combination of two “large and powerful systems” will be a force to be reckoned with. In particular, Tenet will have more leverage to lure physicians away from smaller hospitals and will be able to take advantage of back-office economies of scale that will help reduce costs at a time of shrinking reimbursement and increased pressure on volumes.
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