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I found it really pays to shop around before having surgery. I live in New York City. I priced the cost of a total shoulder replacement in and out of the city. The cost of the operation is much higher in the City compared to upstate New York. Any idea how they can get away with this?

Whenever checking on prices be sure to compare apples to apples and oranges to oranges. For example, some operating room prices include all supplies and the anesthesia while others cost these out separately.

Your basic operating charges include the operating room, supplies, anesthesia, the surgeon's fee, and the anesthesiologist's fee. There may be a pathology fee if tissue is removed from the body. And don't forget the hospital room, supplies, and all expenses for an overnight (or longer) hospital stay.

A separate issue is how costs are decided in the state of New York. These are based on the wage index for the region. Salaries for certain hospital employees are used in the decision. Other costs such as real estate, building maintenance, utilities, and supplies are also figured in.

Finally, costs often go down the more operations are done. A high-volume hospital often has lower prices. A hospital with fewer operations to share overall facility costs will have to charge more to cover their expenses.

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