Hospital Outpatient Prices Much Higher Than Independent Physicians' For Identical Services

A recent study published by the National Institute for Health Care Reform has found hospital outpatient prices for many services were dramatically higher than prices charged by independent physicians and ambulatory clinics.

The study was based on 2011 private insurance claims data from General Motors, United Auto Workers, Ford Motor Company and Chrysler. The data examined contained claims information for approximately 590,000 active and retired nonelderly workers and their dependents.

The study made the following findings.

  • The average price for an MRI of a knee was about $900 in hospital outpatient departments compared to about $600 in physician offices or freestanding imaging centers, referred to as community settings.
  • A basic colonoscopy cost on average $1,383 in hospital outpatient departments compared to $625 in community settings.
  • For a comprehensive metabolic panel — a common blood test — the average price in hospital outpatient departments was $37, which was triple the price of community settings.

 Hospitals cite their higher overhead costs and additional regulatory requirements, such as the obligation to screen and stabilize all patients, as justifications for their higher prices, according to the study.

The study noted the higher prices charged by hospital outpatient facilities has likely accelerated the trend of hospital acquisition of physicians practices, which is contributing to growing provider market power.

More Articles on Healthcare Spending:

The Healthcare Spending Slowdown in the U.S. and Globally: 5 Things to Know
AHA: 5 Key Strategies for Hospitals to Succeed in the New Healthcare Marketplace
Healthcare Spending Decreased in Q1, Bureau of Economic Analysis Finds

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