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Study confirms price for services in outpatient setting higher than in physician office

Price differences, shift toward outpatient departments was linked to a 44 percent increase in total spending, authors say.

Susan Morse, Senior Editor

A recent American Journal of Managed Care study has confirmed prices for care in a hospital outpatient department tend to be higher than those for the same service performed in a physician's office.

Across all seven services studied, prices at a hospital outpatient department were statistically higher, ranging from 21 percent more for an office visit to 258 percent more for chest radiography, according to the AJMC study released March 2 by authors Aparna Higgins, MA; German Veselovskiy, MPP; and Jill Schinkel, MS.

The differences in price, combined with a shift in volume in favor of hospital outpatient departments, was associated with a 44 percent increase in total spending between 2008 and 2013, according to the study.

These seven services accounted for $1.9 billion more in healthcare spending in 2013, according to the study. 

[Also: Price estimates for routine medical procedures prove elusive, study finds]

The seven services studied fell into three categories: office visit, imaging or procedure. The office visit was broken down by a 15-minute or 40-minute visit; imaging by CT scan of head, brain without dye, an MRI of the lumbar spine without dye, and a chest radiography; procedures included an upper gastrointestinal endoscopy and colonoscopy.

The magnitude of price differences increased over the five-year study time period between 2008 and 2013, the study said.

Most research to date has focused on geographic variation in prices for specific healthcare services, the authors said. These studies have found wide hospital-level and regional variation in prices for specific healthcare services, such as vaginal births, and knee and hip replacements, they said.

[Also: Huge variation in medical prices as hospital 'monopolies' charge more, report says]

The Medicare Payment Advisory Commission recently analyzed payments for services rendered in hospital outpatient departments compared with payments for the same services performed in independent physician practices. MedPAC found that for patients with similar risks and characteristics, payments in the hospital outpatient department exceeded payments in the physician's office by 19 percent for level II cardiac imaging, and by 141 percent for a level II echocardiogram, according to the AJMC study.

Twitter: @SusanJMorse

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