ECRI tracks only the average price of the acetabular shell component paid by its member hospitals. The acetabular shell component is one of four parts in a hip implant.
The average price of the acetabular shell is down 16.1% for the year and was essentially flat—a 0.4% change—from July to August. Prices range from $700 to $2,700, based on the type of procedure—simple primary implants cost less than products used in extensive revision surgeries—and the hospital's negotiating power.
“Hospitals are working collectively with physicians to reduce costs in physician preference areas, hips being one of these areas,” said Tim Browne, director of ECRI's PriceGuide Service.
The prices of hip implants and other implantable medical devices such as pacemakers have been under pressure for several years as hospitals seek to lower supply costs to offset declining reimbursement rates and lower patient volumes.
In addition, there have been few technological advances for hip implants in recent years. Updates to older technology and new advances in technology are two primary factors that may cause a manufacturer to raise prices or charge more for a medical product.
“The technology has been pretty stable for many years,” said Jeremy Suggs, ECRI's engineering manager for health devices. “There haven't been any real game changers in recent history.”
The last significant change in hip implant technology was the arrival of metal-on-metal hip implants, which were expected to last longer than the 10 to 15 years that implants made with polyethylene do. However, metal-on-metal implants failed at higher rates than traditional implants and some were eventually recalled from the market. Johnson & Johnson paid billions of dollars to settle patient lawsuits related to the utilization of metal-on-metal implants after it recalled its ASR XL acetabular system, and Smith & Nephew and Zimmer Holdings both recalled metal-on-metal products.
Another factor that has weighted price negotiations for implantable medical devices in favor of hospitals is that more doctors are now employed by hospitals. In the past, hospitals often let physicians who functioned more like independent contractors purchase the implant of their choice regardless of price.
The top manufacturers of hip implants in the U.S. are Biomet, Johnson & Johnson's DePuy Companies, Smith & Nephew, Stryker and Zimmer. Those five companies sell about 90% of the hip implants used in the U.S., but some consolidation is underway. Zimmer is buying Biomet for $13.35 billion. That deal is expected to close next year.
Without new advances in hip implant technology, Brown predicts that the average prices paid for hip implants will continue to drop.
“This will be a category that hospitals will continue to try to further reduce costs,” he said.
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