In early August, The New York Times published an article on the escalating orthopedic costs in the United States. In the article, titled "In Need of a New Hip, but Priced Out of the U.S.," Dr. Elisabeth Rosenthal details an insurance company that refused to pay for a patient's hip replacement operation. For the patient, the non-insured cost of the operation in the United States was $78,000. Eventually, the patient received the hip replacement surgery in Belgium for $13,660.

Dr. Rosenthal explores why a hospital would quote a patient such a high price, and attributed the actual cost of the implant to a large. While she claims that the implant carries a price tag of $8,000 in the United States, it only carries a cost of $4,200 across the Atlantic ocean in Belgium. However, industry players have questioned the focus of Dr. Rosenthal's piece.

There's just one problem with The New York Times' characterization, says Jeffrey Binder, president and CEO of Biomet: it's highly inaccurate, he writes in a post on the company's corporate blog. In his response, Binder states that The New York Times piece concentrates only on the cost of the actual implant. Because of this, Dr. Rosenthal only addresses 6% of the total procedure cost. The total price gap between procedures in the United States and Belgium was $65,000.

In the article, Dr. Rosenthal continues her focus on the cost of replacement hip implants. While she ignores 94% of the total cost difference, Binder alleges that the New York Times piece unfairly blames high costs on medical device manufacturers.

According to Binder, the cost of hip implants declined 8% from 2010 to 2012. This downward trend is part of an ever-larger trend. During a six-year period from 2006 to 2012, the cost of primary hip implants decreased by 13%.

While implant costs were on the decline, payments made to hospital by private insurers increased over this six year period by 16%.

Binder also notes that the price a hospital pays for an implant doesn't vary based on the payor. Instead, manufacturers bill a hospital for an agreed-upon price. The payor is then billed for the total cost of all received services (including the implant).

Because of this, medical hospital reimbursement for medical devices is on the decline too.

In Binder's response to Dr. Rosenthal's article, he notes that the $78,000 quote for a U.S.-based hip replacement operation is approximately double the average price paid by private insurers. Compared to Medicare reimbursement, this figure is seven times greater.

In her article, Dr. Rosenthal also alleges that there are up to thirteen layers of vendors between a patient and the physician. Because of this, she alleges that hospital costs are on the rise. However, Binder refutes this argument, stating that Biomet's local distributors' service and sales are included in quoted prices.