In this article, we will be taking a look at the 15 most expensive medical treatments/procedures in the US. To skip our detailed analysis, you can go directly to see the 5 most expensive medical treatments/procedures in the US.
The U.S. is unique in that it is one of the only advanced countries in the world to not offer universal healthcare. Instead, a person's healthcare is generally tied to employment, and those without insurance can even go bankrupt while attempting to pay off bills. In fact, a person without insurance can often be charged exorbitant amounts without any basis, as hospitals expect insurance companies to haggle and reduce the bill and if you're wondering how much does surgery cost without insurance, it can vary widely from hospital to hospital, your negotiating skills and the type of surgery, but odds are overwhelming that the cost will be much higher than if a person was insured.
Unfortunately, despite the U.S. topping the list of countries with the best hospitals in the world, said healthcare is often only available to some of the population. You might even be surprised to know that healthcare is among the most lucrative industries in the country, and doctors and surgeons can command top salaries. While in other advanced countries the entire population can access healthcare services, including Canada and most European countries such as Germany, France, Spain and Poland. Since the U.S. has repelled any advances towards universal healthcare, it also has some of the highest per capita spending on healthcare and in 2021, the Centers for Medicare and Medicaid Services demonstrated that per capita healthcare spending in the U.S., driven mainly be the most expensive medical treatments / procedures in the U.S., stands at $12,914. At the same time, healthcare spending in the country stands at a staggering $4.3 trillion per year, and yet, is still unable to provide quality service to the overall population. Some of the most expensive medical treatments in the world are mostly present here, which is why many people even consider going to Mexico for cheaper medical treatments. It's also not surprising that likely the most expensive hospital bill ever also took place in the U.S. in Florida, worth $9.2 million.
A surgeon in a modern operating theatre performing a transplant surgery with medical technology. Editorial photo for a financial news article. 8k. --ar 16:9
According to McKinsey & Company, the healthcare industry is expected to demonstrate growth of 4 percent CAGR from 2021 to 2016, where it will likely reach profits of $790 billion. This is a downwards revision from an earlier prediction of 6% growth by McKinsey from 2021 to 2026, as inflationary pressures have threatened growth. While inflation is no longer as high as the peak it reached in 2022, it is still relatively high and combined with labor shortages, is providing additional difficulties to the healthcare industry. A 2021 report by the American Association of Medical Colleges predicted that around 15,800 - 30,200 shortages would be seen across all surgical sectors by 2030, which will prevent people from receiving the necessary treatment, including the most expensive medical treatments in the country, which can cost several hundreds of thousands of dollars. One of the primary reasons behind this shortage is due to the high costs of medical education as huge student debts along with high interest rates are acting as a further deterrent.
Meanwhile, the aforementioned expected increase in profits is likely to come from various sources, one of which is a change in payer mix, as the over-65 population continues to grow, which prefers Medicare Advantage. However, based on legislation that allows states to determine again eligibility, could see enrollment decline by around 10 million people over the next five years. At the same time, margins have declined in the industry in 2021 as opposed to 2019, though margins are now expected to recover post-pandemic and grow at a CAGR of 15%. At the same time, annual costs as a result of endemic Covid-19 will be in excess of $200 billion.
This uncertainty in the industry has impacted some of the most valuable healthcare companies in the world. One of the biggest such company in the world is CVS Health Corporation (NYSE:CVS), which has seen its share price decline by more than 23% YTD. In its Q2 2023 earnings call, CVS Health Corporation (NYSE:CVS) stated "This growth reflects our differentiated product offerings that address the total cost of care and the whole health of a member through our integrated solutions. Medical cost trends were well controlled in our commercial and Medicaid books of business. Consistent with the broader industry, elevated medical costs emerged in our Medicare Advantage business which became apparent in the latter part of the quarter. The primary driver of these elevated medical costs was greater than expected utilization in outpatient settings. Shawn will discuss these trends in more detail. In Medicaid, the State of Oklahoma awarded us a new statewide Medicaid contract beginning in April 2024 that will add approximately 200 members. This win demonstrates our market-leading ability to comprehensively support Medicaid populations through our deep local relationships, investment in clinical programs, and integrated wellbeing solutions. This quarter, we were able to offset the pressures in our healthcare benefits segment with continued strong execution in our health services segment. Revenues grew to $46.2 billion, an increase of nearly 8%. Adjusted operating income grew 3.5% to $1.9 billion. These results were driven by our pharmacy services business." This shows that increased costs even among the most expensive medical procedures in the U.S. are continuing to drive growth, while also demonstrating the company's strategy.
Coho Partners Relative Value Equity Fund made the following comment about CVS Health Corporation (NYSE:CVS) in its second quarter 2023 investor letter:
“In December of 2017, CVS Health Corporation (NYSE:CVS) agreed to buy Aetna, which broadened its offering by entering the managed care business. CVS has been moving its portfolio to a more value-based outcome model, and Aetna was a major move in that direction. We were willing to accept the leverage that came with the deal because CVS has a very cash generative model, and we anticipated the free cash flow would enable the company to de-lever fairly quickly.
By mid-2022, CVS was in a position to use the free cash flow that had been going to debt repayment to do bolt-on deals to further prepare for the value-based outcome model and/or return more cash to shareholders in the form of higher dividends or share repurchases. However, CVS lost a “star” in its largest Medicare plan in late 2022 and this will adversely impact earnings in 2024. This was a surprise and disappointment to us, but management should be able to regain the “star” in the back half of 2023, which will then give the company a nice tailwind in 2025…” (Click here to read the full text)
Additionally, HCA Healthcare, Inc. (NYSE:HCA) is one of the biggest hospital owners in the U.S., with more than 186 hospitals and 2,000 sites of care. While its share price has remained consisted September YTD, HCA Healthcare, Inc. (NYSE:HCA) still has a sizable impact on the healthcare and hospital industry because of its influence. According to McKinsey, hospitals are attempting to increase labor productivity and even in a best case scenario where most hospitals would recoup considerable savings in costs, industry EBITDA margins will be negatively impacted by 90 basis points. In the worst case scenario, EBITDA margins are expected to fall by 250 basis points. This might result in the most expensive medical procedures in the U.S. costing even more as hospitals attempt to improve margins and profits.
Baron Funds mentioned HCA Healthcare, Inc. (NYSE:HCA) in its second-quarter 2023 investor letter:
“The flip side of higher medical utilization trends is that health care providers and medical device companies will benefit. We own HCA Healthcare, Inc. (NYSE:HCA), one of the nation’s largest providers of health care services, with 182 hospitals and 2,300 ambulatory sites of care in 20 states and the U.K. We own several medical device companies that should benefit in the short term from procedure recovery and in the long term from new product innovation and increasing demand driven by an aging global population and a higher disease burden from chronic diseases. For the most part, our investments are in companies addressing non-elective procedures, which makes them less likely to be deferred in a recession.”
Determining the most expensive medical treatments / procedures in the U.S. is not an easy task, as there isn't a straightforward U.S. hospital price list. It can vary widely by hospitals and insurances, and so it's hard to obtain an accurate estimate. For our list, we have used information from healthcare analytics company Arcadia and then ranked each treatment based on cost.
15. Mitral Valve Repair
Expected estimate cost: $74,144
Several of the most expensive surgeries in the world are related to the treatment of the heart, the most important organ of the body, including the mitral valve repair.
14. Lumbar Spine Surgery
Expected estimate cost: $75,361
Lumbar spine surgery treats one of the most critical bones in our body, and hence, is among the most expensive medical treatments in America. The surgery can include the repair, readjustment or even physical removal of the spinal structure to treat disease or injury.
13. Coronary artery bypass graft
Expected estimate cost: $77,17
Coronary arteries are required for the provision of nutrients and blood to the heart. If these arteries get blocked by plaque, coronary artery bypass graft can reroute blood and ensure it's able to bypass the blocked or narrowed area, hence the name.
12. Carotid artery stent
Expected estimate cost: $77,529
Carotid arteries can become clogged, seriously impact a person's health. For the administration of a stent, a mesh metal tube is inserted in the artery, which ensures that the pathways remain open for the blood to travel smoothly.
11. Video EEG Monitoring
Expected estimate cost: $77,664
Video EEG monitoring is generally carried out before surgery takes place for epilepsy. The procedure also helps doctors identify and separate epilepsy from other disorders. In this procedure, electrodes are used to monitor brain waves and remains one of the most expensive medical treatments in the U.S.
10. Tricuspid valve repair
Expected estimate cost: $82,431
Tricuspid valve repair is carried out for the treatment of a diseased or damaged tricuspid valve.
9. Tricuspid valve replacement
Expected estimate cost: $82,631
Replacement is always more expensive than repair, and the same holds true in surgery too. Tricuspid valve replacement may be carried out as minimally invasive surgery or even open heart surgery.
8. Transcatheter aortic valve replacement
Expected estimate cost: $85,729
One of the most expensive treatments / procedures in America, a transcatheter aortic valve replacement replaces the aortic valve which doesn't fully open and is a minimally invasive procedure, using even smaller incisions as opposed to open-heart valve surgery.
7. Aortic graft
Expected estimate cost: $92,939
There have been several improvements in aortic graft procedures, and according to Nebraska Medicine, an improved method practiced on rabbits will likely see a better probability of successful outcomes.
6. Liver transplant
Expected estimate cost: $101,240
The fact that liver transplants are so expensive, plus the patient needs to potentially be on a waitlist for years, should lead to less drinking, one of the biggest causes of a failing liver.
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Disclosure: None. 15 most expensive medical treatments/procedures in the US is originally published on Insider Monkey.