The cost of hip ops


I was interested to read Angus Deaton’s account of his hip replacement operation (RES Newsletter no. 133, April 2006). As of 2006, the National Health Service in my part of London provides a comparator that is a particularly good match to the provider he chose. The comparable provider has been modelled on a specialist hospital in New York which sounds remarkably like the one where he was treated. Unlike in 2000, there is unlikely to be a significant wait for treatment there currently, so there will not be a premium for promptness.

Deaton estimates the average cost of a hip replacement operation (as measured by hospital charges to be $50,000. The comparable figure for South West London is a bit under £5,000 at present. This suggests that a ‘hip replacement pound’ is worth around ten ‘hip replacement dollars’. This compares with a general purchasing power parity rate (as used by Wanless on official advice) of around $1.60 and one for health care as a whole of between $2.10 and $3.50, depending on whether one uses the Elteto-Koves-Szulc (EKS) or the Geary-Khamis (GK) approach.

Donald Roy

Page Options