Dive Brief:
- Medical services provided in outpatient settings are notably pricier when delivered in hospital-owned departments compared with ambulatory surgery centers or physicians’ offices, according to a new analysis from a Blue Cross Blue Shield Association subsidiary.
- The report, based on data for 133 million Blues members found from 2017 to 2022, also found prices generally grew more rapidly at hospital outpatient departments than at non-hospital outpatient settings.
- Researchers said their data supports site-neutral proposals to make care costs the same regardless of where it’s provided. Momentum is building in Congress around the policies, but they face fierce opposition from hospital groups.
Dive Insight:
The Blue Health Intelligence report is the latest to find wide discrepancies in prices between different medical settings. Lawmakers and watchdogs have flagged the unequal payments as a key driver of expense growth for the Medicare program and for patients through higher cost sharing.
Policy experts also say unequal payments between sites creates adverse incentives for consolidation, as hospitals acquire physician offices, change their designation and bring in more revenue for providing the same care.
According to the new BSBCA data, the average cost for a routine colonoscopy screening was $1,224 in hospital outpatient departments last year — 32% higher than $925 in ambulatory surgery centers and double the $611 price tag in doctors’ offices.
Cataract surgery cost an average of $3,499 in hospital-owned settings last year, 56% higher than the $2,304 allowed in an ambulatory surgery center and more than ten times the $329 in a doctor’s office.
Prices also generally rose faster in hospital outpatient departments than other settings over the study period, according to the report.
Between 2017 and 2022, allowed costs increased by 18% for colonoscopy screenings in an hospital outpatient setting, and only by 8% an ambulatory surgery centers during the same timeframe.
For diagnostic colonoscopies, which involve a biopsy or other procedure in addition to the colonoscopy, hospital costs rose 17% between 2017 and 2022. Costs in an ambulatory surgery center increased 10% in that time, the report found.
Hospitals say their higher prices are necessary because they tend to see sicker patients and must comply with more onerous regulations, including 24/7 standby capacity for emergencies.
Meanwhile, Congress is taking an increasingly closer look at standardizing payments across sites to save the government money and tamp down on provider consolidation.
In June, a bipartisan group of senators introduced the Site-based Invoicing and Transparency Enhancement Act, which would standardize payments to hospital-owned outpatient sites and physician offices for the same services.
Advocates of the bill say it would save taxpayers up to $40 billion over a decade.
