A hip implant costs $300-600 to manufacture. The hospital invoice is $3,500-7,000. The gap is almost entirely field reps and consignment inventory, not titanium.
Small hospitals pay two to three times more than large systems for the identical part number from the same manufacturer. That gap is well documented and almost never mentioned in the viral threads.
Group purchasing organizations have been doing the Costco thing since 1987. They cover most US hospitals. Physician preference items like hip implants are the category with the lowest contract compliance.
Costco works because the shopper, the payer, and the consumer are the same person and can walk away. In an OR the decider bears no cost, the payer is locked in, and the consumer is unconscious. The model just does not transfer.
Subscribe to www.onhealthcare.tech for free and paid articles, podcasts, and more.
