The Economics of Everyday Things - 40. Prosthetic Limbs

Episode Date: March 18, 2024

More and more Americans rely on prostheses. They’re custom-fitted, highly personal, and extremely expensive. Zachary Crockett investigates. SOURCES:Jordan Beckwith, YouTuber and advocate.Eric Neufeld, owner and medical director of Agile Orthopedics. RESOURCES:"Medicare Coverage of Durable Medical Equipment & Other Devices," by Medicare (2024)."Limb Loss in the U.S.," infographic by the Amputee Coalition (2022)."A Robot Hand Helps Amputees 'Feel' Again," by Jeffery Delviscio (Scientific American, 2019)."Differences in Myoelectric and Body-Powered Upper-Limb Prostheses: Systematic Literature Review," by Stephanie L. Carey, Derek J. Lura, and Jason Highsmith (Journal of Rehabilitation Research and Development, 2015)."Local Coverage Determination: Lower Limb Prostheses," from the Medicare Coverage Database (effective 2015)."Variation in the Care of Surgical Conditions: Diabetes and Peripheral Arterial Disease," by Philip P. Goodney, Nino Dzebisashvili, David C. Goodman, and Kristen K. Bronner (Dartmouth Atlas of Health Care Series, 2014)."Estimating the Prevalence of Limb Loss in the United States: 2005 to 2050," by Kathryn Ziegler-Graham, Ellen J. MacKenzie, Patti L. Ephraim, Thomas G. Travison, and Ron Brookmeyer (Archives of Physical Medicine and Rehabilitation, 2008).

Jordan Beckwith is in her early 30s. She lives on her own, just outside of Denver, Colorado. She's got an apartment, a car, two big dogs named Sophie and Leo, and a YouTube channel with a million subscribers. My name is Jordan Beckwith, but online, my handle is Footless Joe. Footless Joe's origin story goes like this. When I was 13, I took a very bad fall off of a horse, shattered my ankle, my tibia broke

off and then was shoved up into my legs. It was really bad break, caused a lot of complications and healing. It was about 14 years of surgeries and trying to walk, trying to be active and be a kid. By the time I was 27 and still dealing with all of that, I knew that I was at the point to make the right decision. And five years ago in 2018, I had my below-the-knee amputation. From the time that I sent the email in being like, yes, let's go ahead and do this, I think it was three

weeks from then. And it's funny. I mean, the process is like minor knee surgery or wrist surgery. It's all the same. When they're also removing a limb, they come in smiling. They're like, this is the one we're taking off today, right? As soon as pain was under control,

they keep you there for like three days and then they send you home. What came next was an intense, expensive and important relationship with her new leg. In general, they try to get you up and beginning to use a prosthetic within like six to eight weeks, which sounds very soon. Right. Like you just cut off my leg and I'm supposed to start walking on that. For the Freakonomics Radio Network, this is the economics of everyday things. I'm Zachary Crockett. Today, prosthetic limbs. In the U.S., about 2,000 babies a year are born missing some portion of a limb. Far more

people lose arms or legs later in life as a result of vascular disease or an injury. Altogether, more than 2 million Americans today are living with the absence of a limb. Some amputees don't seek out a replacement for their lost limb. But many patients, especially those with leg loss, use a prosthesis. And for them, the first step is finding a good prosthetist. Jo Beckwith loves hers. He's fantastic. He's goofy. And he does a great job making legs.

Right now he works with Hanger Prosthetics. Hanger has about 900 clinics nationwide. It provides prosthetics, which are devices meant to replace limbs, and orthotics, things like knee braces and shoe inserts that support an existing body part from the outside. Hanger does brisk business. Before it was taken private in 2022, it reported annual net revenues of over a billion dollars. They are the biggest. I had a lot of hesitations about Hanger kind of just being like big box prosthetics, but I've had a great experience there actually. How did you know you had found the right person?

There's a lot of time that you spend with them. A lot of like, all right, let's try this and see how it works. The relationship that you have with your prosthetist as an amputee is really important. There's a lot of trust that's placed in them. Yeah, it's a very intimate relationship. That's Eric Neufeld. He's the owner and medical director of Agile Orthopedics, which is also in Colorado. We're among the smaller size in our industry. We see about 200, 225 prosthetic patients a year.

What would you major in if you wanted to do this? Well, a variety of things. People major in engineering and then go for this master's program. It's called an MPO, which is a Master's of Prosthetics and Orthotics. You need to go through a formal certification process, taking a series of exams to go through a formal certification process, taking a series of

exams and going through a residency program. At the end of it, then you are certified, and that's your badge. What was it about it that really hooked you? I think it was just the ability to make stuff and solve problems, but with a real purpose. You know, when we meet somebody, that's the line of questions that we go through. What's important to you? What do you like to do? What do you need to do? What's your job? It's in most cases, ideally, a lifelong relationship.

Periodically, maintaining the device, replacing parts, keeping in touch with the patients. And your limbs change over a lifetime too. You gain and lose weight, you gain and lose muscle, things happen. We've got to keep up with that with their devices. So these are people we get to know very, very well. But unlike a doctor or a physical therapist, Neufeld is not paid by appointment. doctor or a physical therapist, Neufeld is not paid by appointment. We get reimbursed by insurance companies or Medicare or Medicaid when the device is delivered,

not from the hours and hours of services provided leading up to that or even after that. It's a real nuance, but prosthetics and orthotics as a combined field is looped into durable medical equipment. So DME, picture wheelchairs, crutches, beds, oxygen, things like that. Whether it's, you know, one of those walking boots you get after you fracture your ankle, or a very complex above-knee prosthesis, it's all considered the same financial model that's based on a single item, and all the services associated with it is tied into that payment for that device. It takes a lot of

consultation and time to get these highly customized products right, especially the socket where the prosthesis will connect to its future owner. That's the cup that the residual limb goes into. Custom unique to that person. On the socket is an attachment point at the bottom of it, where you put on the componentry. And those components could be the knee, the shin section, the ankle portion, and then the foot and any other features that we're adding to it for, you know, suspension methods. Then a dynamic alignment is performed. So each person walks just a little differently based on their strength, based on compensatory mechanisms they're using because of the weakness or the loss of that limb.

And so it's aligned through some adjustability that's built into the components until it feels safe and performs. All that work means that prosthetics are not cheap. Prosthetic limbs, the cost for a below knee prosthesis, it's around 15 to $20,000. My first ankle was an Osir ankle that was the brand. I believe when I got the bill for it, not the socket, just the ankle itself, was about $16,000. Looking through the manufacturer's catalogs, you can see which ankles are rated higher

for shock absorption or are waterproof. But it's hard to find prices on these individual components. They're not generally published online. So before a prosthetist can buy a particular model to use in a patient's device, their clinic needs to negotiate a rate with the distributor or with the manufacturer themselves. Either way, you tie that together with the sockets. That whole process was right around $30,000. You're talking large dollar signs when it comes to anything prosthetics related.

That's just for standard mechanical devices, which Beckwith uses. None of them have to be charged. There's no computerized parts or pieces. You're controlling it just by your body movement and your muscle activity. But there are also knees and ankles that are controlled by microprocessors and powered by hydraulics and rechargeable batteries. These components offer a responsive range of stability and support, whether you're standing still or playing basketball. The software in these devices has to learn how their owner moves over time. The microprocessor controlled knee, for instance, is reading your speed, your slope, how you're

walking, if there's been an interruption and you're about to stumble. It knows that because it's taking these readings however many times per second. Above knee with the use of microprocessor componentry can get into the 70, $80,000 range. And then similarly, if somebody is missing above the elbow and you're using myoelectrics and externally powered devices, that can actually cross the $100,000 threshold. Myoelectric devices use signals from the arms remaining muscles actually cross the $100,000 threshold. Myoelectric devices use signals from the arms remaining muscles to help direct the movements of a prosthetic elbow, wrist, or hand.

The most deluxe models can even provide the sensation of touch. Think of reaching into your back pocket for your ID. The way we use our hands depends heavily on the information we receive from the nerves in our skin. But there's also the challenge of proprioception, which is the body's sense of where all its parts are, in balance, in motion, and in relation to one another. It's a vital part of our neural system when it comes to motor control, and engineers in the field called biomechatronics are making headway. But more bells and whistles make a device more expensive and harder to learn. So sometimes simpler is better.

Somebody who had lost her arm above the elbow, you know, we had gone through all these different iterations with complex arms to achieve a variety of things, but ultimately all she wanted to do was hold a carrot on a cutting board. That was it. And so she helped design something called the carrot arm, which was a very simple socket with a fork just coming out of the end of it. No wrist, no hand, no elbow, nothing. This became more functional to her. Basic or advanced prosthetics still remain out of reach for some patients. I've certainly talked to people in some pretty rough situations where getting a prosthetic

is not possible for them for one of many reasons. That's coming up. If you need a prosthetic and you want your insurance to pay for it, it'll have to be approved as medically necessary. Providers' coverage guidelines often refer to a patient's function level and their potential for rehabilitation. A patient's physician and prosthetist have to make a case involving their physical ability,

their life expectancy, their home and work environment, even their grit. Eric Neufeld of Agile Orthopedics says it can be an ordeal. Quite a bit of documentation is required both from the prosthetist and the physician who's collaborating and prescribing the device. We have a staff of administrative people fighting with insurance companies, chasing down documentation, you know, the billing, collecting, all that stuff. If the request gets approved, then Medicare and many private insurance plans will cover 80% of the cost of a new prosthetic device.

But then there are pieces that wear out before they're going to be covered. Again, that's Jordan Beckwith, aka Footless Joe. So that's an out-of-pocket expense that either I have to pay myself or I have to deal with a part of my leg not working. Generally speaking, every three years, insurance will consider covering a new ankle. A lot of the components can wear out much faster. There's a liner, which is the thing that's directly in contact with your skin. It's $1,000 each. I can make it last for six months, but that is a stretch. There's something called a sleeve, which is if you're using

a section-based form of a prosthetic, which a lot of people do. Those things wear out after like two months. If you're an active person, those are like $300 to $400 each. I couldn't really walk without it. Then there's the foot shell, which is the thing that looks like a foot that actually goes into the shoe. I was walking on one that had a lot of holes in it for a long time.

So there's a rationing that comes along with being an amputee for all the additional parts and pieces. Eric Neufeld has spent time distributing prosthetics in parts of Central and South America, where many people can't afford professionally made limbs at all. People get very innovative, very creative. We've seen all kinds of stuff. People using upside down soda bottles that are reinforced in a way to become a socket,

and then attached to just wood, just scrap wood, and twine, tying everything together, and people pretty functional on some of these really cleverly designed and cobbled together devices. I've really come to appreciate that kind of innovation that people just from the materials around them have been able to figure something out. Researchers at Johns Hopkins have suggested that the number of amputees in the US is poised to double between 2005 and 2050.

That's mostly due to the rising rates of diabetes and peripheral arterial disease. These often go untreated in low-income and under-insured communities. One development that could make some prosthetics more affordable is the rise of 3D printing. As we get better and better at creating algorithms and certain ways to process scans to create the sockets through 3D printing, I do think it could drive down costs and create scalability. You know, for instance, a scan could be taken in Ecuador, and I could print a socket in Denver that night from that scan.

So it allows us to work together in ways that we were never able to before. 3D printing is an efficient way to get through the many iterations that it takes to get a socket right. There have been significant advances in 3D printed hands, arms, and even feet, though certain parts are still a challenge. Legs, for instance, generally have to be made from carbon fiber materials, strong enough to bear a person's weight.

And that material can't be 3D printed. Another solution to the cost and accessibility issue is to reuse prosthetic parts. Eric Neufeld founded an organization that helps prevent expensive parts from going to waste. To just throw it away is heartbreaking. So we do accept a ton of used prosthetics from all over the country. The sockets are not really reusable. You can't refit a socket on someone else. So, you know, the recycling effort is in the componentry and we have a process to control quality and inspection and things like that and we're able to distribute them to

manufacturing facilities and labs that are providing custom sockets on site in Guatemala and Ecuador. They use the recycled componentry from donations that are happening here in the United States. It's going to really help someone else and change someone else's life. It's a huge win-win. For her part, Jo Beckwith will continue sharing her triumphs and her challenges with her subscribers on YouTube. I think it's really about figuring out what you want your life to look like and how you want to adjust to that. I consider myself extraordinarily lucky with the people that I've been able to meet, with the community that I have,

and a prosthetist who fights on my behalf. Like, amazing. For the economics of everyday things, I'm Zachary Crockett. This episode was produced by Sarah Lilly and mixed by Jeremy Johnston. We had help from Daniel Moritz-Rapson. [♪ music playing, sound effects of radio radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing, radio playing The Freakonomics Radio Network. The hidden side of everything.