As health care costs have risen in America , it has become increasingly difficult for consumers to track the prices of their respective procedures . For example , the cost of knee replacement surgery has reached an average price of $ 5000 at Gundersen Health System , a Wisconsin hospital , but the administrators there no longer have a precise real - world cost . Instead the fee is a combination of consumer guesswork and market opportunism . When the health system conducted an 18-month review , it found that the actual treatment cost was $ 5000 at most . This price gap is indicative of how the prices of procedures have become detached from their actual value , as costs become dictated by cost targets . Compounding the issue is that most patients , particularly those who are insured , do not know the cost themselves and therefore do not attempt to find a better deal . By 2016, the average list price was more than $50,000, including the surgeon and anesthesiologist. This issue is at the heart of the rise of health care costs in the US , which is set to hit 20 percent of GDP . Hospital prices have outstripped inflation for decades , illustrating that the health market is not competitive . Price negotiations between insurers and hospitals remain confidential , and consolidation among providers has given greater strength to hospitals in these negotiations . For knee replacement surgeries higher - cost hospitals spent almost twice the amount of their lower cost equivalents . A range of factors contributed to the rising price of the procedure , with inefficiency and unexpected variations between treatment programs , both before and after surgery , all of which added to significant labor costs . Having observed these issues , the Gundersen health system cut the cost of to an average of $ 8700 , as well as trimming back the typical stay for patients . The hospital is hopeful that by applying the same drive for efficiency , they will be able to cut costs for other procedures they carry out .
As health care costs have risen in America , it has become increasingly difficult for consumers to track the prices of their respective procedures . For example , the cost of knee replacement surgery has reached an average price of $ 5000 at Gundersen Health System , a Wisconsin hospital , but the administrators there no longer have a precise real - world cost . Instead the fee is a combination of consumer guesswork and market opportunism . When the health system conducted an 18-month review , it found that the actual treatment cost was $ 5000 at most . This price gap is indicative of how the prices of procedures have become detached from their actual value , as costs become dictated by cost targets . Compounding the issue is that most patients , particularly those who are insured , do not know the cost themselves and therefore do not attempt to find a better deal . This issue is at the heart of the rise of health care costs in the US , which is set to hit 20 percent of GDP . Hospital prices have outstripped inflation for decades , illustrating that the health market is not competitive . Price negotiations between insurers and hospitals remain confidential , and consolidation among providers has given greater strength to hospitals in these negotiations . For knee replacement surgeries higher - cost hospitals spent almost twice the amount of their lower cost equivalents . A range of factors contributed to the rising price of the procedure , with inefficiency and unexpected variations between treatment programs , both before and after surgery , all of which added to significant labor costs . Having observed these issues , the Gundersen health system cut the cost of to an average of $ 8700 , as well as trimming back the typical stay for patients . The hospital is hopeful that by applying the same drive for efficiency , they will be able to cut costs for other procedures they carry out .