National estimates of price variation by site of care

Recently, researchers and policy makers have demonstrated growing interest in differences in payments across sites of care for the same healthcare service, such as in a hospital outpatient department (HOPD) versus a physician office (PO). Our objective was to examine the price differential for individuals with employer-sponsored insurance by site of care for 7 commonly performed services at the national and regional level.

We analyzed 2008 to 2013 claims data from Truven Health MarketScan Commercial Claims and Encounters Database, containing administrative data for 44 to 53 million individuals covered by employer-sponsored health insurance.

We selected 7 services based on total payments from different clinical categories-categories in which differences in clinical quality and patient morbidity are less likely to be sources of the price differential. We calculated payment amounts at the visit level for each healthcare service by site of care, then calculated the price differential by site of care as a ratio of average HOPD price to the average PO price or average ambulatory surgery center price for the same service.

Across all 7 services, prices at a HOPD were statistically significantly higher than payments to a PO, ranging in 2013 from 21% more for an office visit to 258% more for chest radiography. The increase in the price differentials, combined with a shift in volume in favor of hospital outpatient departments, was associated with a 44% increase in total spending between 2008 and 2013.

Our study shows that price differentials by site of care exist at a national level, and that they are increasing over time.