Dan Margolies has put together an interesting and thought provoking article on price variation in health care services. Yes, that knee replacement might be cheaper in St. Louis, in some absolute sense to that individual paying out of pocket for the service, than the knee replacement might be in Kansas City, though in-network and out-of network co-insurance obligations might hide that from the insured consumer. David Slusky, from K.U., explains this well in the article.
So, just how big a deal would it be for the uninsured to travel to St. Louis for that knee replacement? First, Missouri is a state with its most populous areas — St. Louis and Kansas City — serving as border cities at two ends of the state separated by a several hour drive across the state. Second, services like joint replacement are often followed by rehab stays. It can be uncomfortable, though not impossible, to travel to rehab in your city of origin when the actual surgery was several hours away. And there is a good reason people want, whenever possible, to be near friends and relatives when in rehab. It keeps morale up and good morale can contribute to better outcomes. Finally, the arrival of bundled payments for things like hip and knee replacement are probably going to make it harder, even for the out of pocket payment patient, to cherry pick surgical services in one location and rehab services in another. I predict it will not be long before it will not be possible to detach the surgery from the rehab, no matter the payment source.
Missouri State of Mind 