Study quantifies cost differential between physician offices and hospital outpatient care

A new study quantifies the significant differences in cost for procedures delivered in a physician's office versus an outpatient department operated by a hospital.

There were wide variations in prices among seven different procedures that can be performed at a doctor's office versus a hospital-operated outpatient center, according to the study, conducted by researchers affiliated with America's Health Insurance Plans and published in the American Journal of Managed Care.

In 2013, a 15-minute office visit costs about 21 percent more at a hospital than a doctor's office; 25 percent more if the visit lasts 40 minutes. A colonoscopy costs about 2.7 times more in a hospital; an upper gastrointestinal endoscopy 3.4 times more; and a chest x-ray costs about 3.6 times more.

The study bears out a rising concern in the healthcare sector regarding the purchases of physician practices by hospitals, which often lead to a rise in prices for the services delivered. Such trends have begun to catch the eye of federal regulators.

For the seven procedures scrutinized, the study concluded that it cost the U.S. healthcare system about $1.9 billion more to have them performed in a hospital setting. However, the percentage of some procedures performed in hospitals, such as colonoscopies, have been declining in recent years, according to the study data.

Nonetheless, the study's authors concluded that "this increase in differential was accompanied by shifts in volume of services from less expensive (doctors' offices) to more expensive (hospital outpatient) settings. The resulting additional spending is non-trivial."

To learn more:
- read the AJMC study (.pdf)

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