Physician Prices And The Cost And Quality Of Care For Commercially Insured Patients

We analyzed the relationship between prices paid to 30,549 general internal medicine physicians and the cost and quality of care for 769,281 commercially insured adults. The highest-price physicians were paid more than twice as much per service, on average, as the lowest-price physicians were. Total annual costs for patients of the highest-price physicians were $996 (20 percent) higher than costs for patients of the lowest-price physicians were, and this variation was not explained by differences in use. Physician prices were not associated with quality: Among physicians in the same hospital referral region, we did not find significant differences between patients of the highest-price physicians and patients of lowest-price physicians in the likelihood of experiencing an ambulatory care-sensitive hospitalization or being readmitted within thirty days of hospital discharge. There were also no differences between the highest- and lowest-price physicians for these quality outcomes for high-need patients. Policy makers need more information on the causes and consequences of the large disparities in prices paid to physicians.