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Expand chart
Data: Centers for Medicare & Medicaid Services; Chart: Chris Canipe/Axios

More than nine out of 10 hospitals charge at least $30,000 for joint replacement surgery one of the most common inpatient procedures — and one out of six hospitals charges $90,000 or more, according to an Axios analysis of 2016 federal health care data.

The bottom line: Hospitals set prices for any test or procedure at whatever level they want, often well above what Medicare pays. While those prices often aren't what patients pay, they still help dictate what society at large pays for health care.

The background: Large variation in hospital pricing has been understood for several years. The concept gained more awareness in 2013, when Steven Brill published a TIME article about hospital charges that eventually led to the federal government releasing data on hospital and physician payments.

New studies have shown how market concentration factors into pricing.

  • Hospitals have argued that charges are misleading because private and public health insurers don't pay those amounts, which is true.
  • But they still matter a lot. List prices often are starting points, with no relation to cost, that are used in negotiations with private insurers. They also are the baseline for uninsured patients and people who have to deal with out-of-network bills — like this week's infamous case of a teacher in Texas.

How we did this analysis: We combed through and combined spreadsheets of hospital charges and Medicare payments, which the Centers for Medicare & Medicaid Services posts annually.

What we found: For joint replacements, like hip and knee surgeries, prices are still all over the map. However, Medicare pays less than $13,000 on average for a joint replacement.

  • For-profit companies own (or used to own in 2016) nine out of the 10 hospitals with the highest list prices for joint replacement surgeries.
  • Memorial Hospital of Salem County, a small hospital in New Jersey owned by the publicly traded Community Health Systems, had the highest joint replacement price in the country in 2016 at $267,726. CHS submitted a statement but did not explain the rationale for its charges.
  • HCA Healthcare, another for-profit hospital chain, owns two facilities that each charged more than $200,000 for joint replacements in 2016. The company submitted a statement but did not explain the rationale for its charges.
  • Many well-known not-for-profit hospital systems, like Cedars-Sinai in Los Angeles, also rank among the highest-charging hospitals for joint replacements.

That's not all: Aside from the wide distribution in what hospitals charge for joint replacements, many hospitals also heavily increased prices from 2015 to 2016.

  • St. Francis Medical Center in New Jersey raised prices for joint replacement surgeries the most of any hospital in the country in 2016 — a 77% hike to more than $135,000. The hospital did not respond to questions.
  • More than 400 hospitals raised joint replacement prices by at least 10% in 2016.
Expand chart
Data: Centers for Medicare & Medicaid Services; Chart: Chris Canipe/Axios

Go deeper

5 hours ago - Health

FDA advisory panel recommends Pfizer boosters for those 65 and older

A healthcare worker prepares a dose of the Pfizer-BioNTech Covid-19 vaccine at the Key Biscayne Community Center on Aug. 24, 2021. Photo: Eva Marie Uzcategui/Bloomberg via Getty Images

A key Food and Drug Administration advisory panel on Friday overwhelmingly voted against recommending Pfizer vaccine booster shots for younger Americans, but unanimously recommended approving the third shots for individuals 65 and older, as well as those at high-risk of severe COVID-19.

Why it matters: While the votes are non-binding, and the FDA must still make a final decision, Friday's move pours cold water on the Biden administration's plan to begin administering boosters to most individuals who received the Pfizer vaccine later this month.

5 hours ago - World

France recalls ambassadors from U.S. and Australia over submarine deal

Secretary of State Antony Blinken (L), French Foreign Minister Jean-Yves Le Drian (C), and French ambassador to the U.S. Philippe Etienne. Photo: Nicholas Kamm/AFP via Getty Images

France has taken the extraordinary step of recalling its ambassadors to the U.S. and Australia after both countries blindsided their French allies with a new military pact and submarine contract, the French Foreign Ministry announced on Friday.

The backstory: While sealing an agreement with the U.S. and U.K. to acquire nuclear submarines, Australia ripped up an existing $90 billion submarine deal with France. That led senior French officials to accuse the U.S. of a "stab in the back."

Updated 5 hours ago - World

In reversal, Pentagon now says drone strike killed 10 Afghan civilians

Caskets for the dead are carried towards the gravesite as relatives and friends attend a mass funeral for members of a family that is said to have been killed in a U.S. drone airstrike, in Kabul on Aug. 30. Photo: Marcus Yam/Los Angeles Times via Getty Images

A U.S. drone strike launched on Aug. 29 killed 10 civilians in Afghanistan, including seven children, rather than the Islamic State extremists the Biden administration claimed it targeted, the Pentagon said Friday.

Why it matters: U.S. Central Command said at the time that officials "know" the drone strike "disrupted an imminent ISIS-K threat" to Kabul's airport, and that they were "confident we successfully hit the target."