More than a million times a year, a U.S. surgeon slices open a knee, strips out worn cartilage, caps the leg bones with metal, and drops in a plastic spacer to allow the new joint to glide.
While knee replacement procedures have become standard, however, the prices charged have not.
At Catawba Valley Medical Center in Hickory, North Carolina, for example, the cost of the procedure under a Blue Cross Blue Shield health plan this year was about $16,000, according to data from Serif Health, a San Francisco startup that collects recently released data from hospitals and insurers. Little more than an hour’s drive west, however, at Mission Hospital in Asheville, the cost of the procedure under the same health plan was around $40,000, or more than double, the data showed.
Formed by the merger of the two largest hospitals in the region, Mission has little competition and more power to demand the higher price.
While many factors affect the price of a medical procedure, hospitals with few competitors can charge more, health economists say.
“What the data shows pretty clearly is that when hospitals have bargaining leverage, they tend to have higher prices,” said Zack Cooper, an associate professor of public health and economics at Yale University who has spent more than a decade studying hospital monopolies. Over the last quarter century, hospital prices have risen faster than those for any other economic sector, Cooper said, and “hospital consolidation is one of the primary drivers.”
Asheville’s Dominant Hospital
In 1998, the state authorized a deal that joined the city’s two acute-care hospitals to create Mission Hospital. Marcelle Crago, a nurse and lactation consultant, is one of many patients who have accused Mission Health of gouging consumers. Two days before her knee surgery, Mission Health told her the total charge would be over $9,000. She postponed and had it done at an outpatient center instead — for less than a third of the price.
“The way Mission Health handled the whole thing felt predatory,” Crago recalled.
Mission Hospital is almost three times as large as Catawba Valley Health and is a Level 1 trauma center serving a different population, spokesperson Katie Czerwinski said, adding that comparing hospitals’ prices can be misleading.
According to Rand figures, Mission Hospital in 2024 charged prices that were 334% of what Medicare pays. Catawba Valley Medical Center charged 237%. Yet federal regulators intervened in only about 1% of such cases from 2002 to 2020 to stop a hospital merger, according to a Yale University study.
Other states have moved to curb the trend: Minnesota, California and Oregon have all passed laws restricting or scrutinizing hospital mergers. North Carolina state Sen. Julie Mayfield, a Democrat, put it bluntly: “Unregulated monopolies have never gone well for the public.”
This story also ran on The Washington Post. This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License. KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — an independent source of health policy research, polling, and journalism. Learn more at kffhealthnews.org/about-us.