A new price comparison study finds over 50% higher facility fees for commercially insured colonoscopies performed in hospitals rather than ambulatory surgery centers (ASCs), suggesting that “money has apparently been left on the table” for employers and consumers.
Published Friday in JAMA Health Forum, the analysis reviewed data on 13,287 facility fees charged by roughly 3,600 hospitals and 17,000 ASCs across the country. The data were made available last year under price transparency requirements for payers and compiled by pricing data comparison platform Turquoise Health.
Among these, the study’s researchers found that hospitals charged average facility fees of $1,530 for a colonoscopy, $1,760 for a colonoscopy plus a biopsy and $1,761 for a colonoscopy with the removal of polyps, as of May. At an ASC, the same three items were $989, $1,034 and $1,030 respectively.
Controlling for insurer, negotiated type and county fixed events revealed hospitals’ facility fees to be 54%, 56% and 61% higher across the three codes.
The wide price difference between hospitals and ASCs represents a great saving opportunity for many patients and employers, Ge Bai, professor in the Johns Hopkins Bloomberg School of Public Health’s Department of Health Policy and Management, as well as the study’s senior author, told Fierce Healthcare. “Money has apparently been left on the table.”
Bai said that the significant price differences “seem hard to justify” and often translate to higher payments for commercial beneficiaries and their sponsors (the patients and the employers) alike.
While hospitals and payers have both been required by the government to make their pricing available for some time now, the information has been difficult for patients and others to use due to limited or unclear formatting requirements, according to price transparency researchers and advocacy organizations. The government has taken notice, with the Biden administration and lawmakers alike taking recent steps to increase access.
Should the industry reach that point, stark differences in cost such as those highlighted in the study will begin driving changes in consumer behaviors, Bai said.
“Patients pay to obtain medical services. If the service is identical, many patients probably aren’t willing to pay more just because it is offered in a hospital,” she said. “Once patients are allowed to personally [and] directly benefit from using low-cost options, many patients will do so.”
Bai and colleagues’ sample includes the fees disclosed by four of the country’s largest health insurers (Anthem, Cigna, Healthcare Service Corporation and UnitedHealthcare) and cover three common codes for colonoscopy, a procedure the researchers chose because it is “shoppable, largely homogeneous and commonly performed in both [hospital and ASC] settings.”
“Due to data limitations, we did not adjust for variation on system affiliation, case mix, utilization or quality of care across hospitals or ASCs,” they wrote. “Nevertheless, the results suggest that a site-neutral payment policy for a largely homogeneous and shoppable service may generate savings for commercial plan sponsors and beneficiaries.”
Though this study held its analysis to commercially insured patients, the location-specific differences in payment invoke the heated lobbying battle over site-neutral Medicare payments.
Hospitals contend that higher payments they receive for services that can be delivered in other settings are needed to support the broader array of care capabilities offered in their facilities. Advisory group recommendations and the recent passage of a bill containing site-neutral payment provisions for Medicare Part B drugs through the House, however, suggest that momentum is turning against hospitals on the issue.