Surgeries cost more at in-network hospitals than at independent facilities
The median price for shoulder arthroscopy was 1.68 times higher at facilities within networks compared with independent hospitals.
Photo: Nicole Hill/Getty Images
Surgical procedures at in-network hospitals carry a far higher cost than at independent hospitals, a trend that held true for 15 of 16 surgical procedures analyzed in a new study published in JAMA Network Open.
The surgeries found to have higher associated costs included shoulder arthroscopy with cartilage removal, diagnostic colonoscopy and prostatectomy. For example, the median price for shoulder arthroscopy was 1.68 times higher at facilities within networks compared with independent hospitals ($4,432 vs. $2,643).
There was also a high amount of variation in negotiated prices for the procedures, with the median prostatectomy price reaching $9,567 at hospitals in networks, compared to $8,601 at independent facilities.
The metrics were gleaned from 3,195 hospitals' negotiated prices through the Turquoise Health Database, which aggregates price data published by hospitals, per the price transparency rule.
WHAT'S THE IMPACT?
The Centers for Medicare and Medicaid Services enacted the Hospital Price Transparency Rule in 2021 with the idea of improving price transparency and making healthcare services more shoppable. The policy requires hospitals receiving federal funding to release prices for numerous healthcare services, including the 16 surgical procedures outlined in JAMA.
These prices have drawn increased attention by federal regulators, who are evaluating the trade-offs of hospital mergers and consolidations, the authors said.
Whether negotiated rates differ across independent vs. network hospitals remains unknown, they said. On one hand, facilities within hospital networks may have greater market share, which allows them to negotiate higher rates with payers. On the other hand, being part of a network may allow for economies of scale in which large networks provide services at lower prices.
THE LARGER TREND
Authors posited that in some instances there may be appropriate reasons as for why prices of these procedures vary across hospitals, and for why they couldn't be identified with raw price data. They attempted to mitigate these differences by applying the CMS area wage index to account for factors that help determine appropriate pricing for healthcare services.
"As more hospitals become compliant with this policy," they wrote, "it will be important to better understand the mechanisms behind these significant variations in negotiated prices for surgical care to identify areas of unwarranted variation that may be mitigated."
Ambulatory surgical centers are gaining traction, and offer a less expensive alternative, American Surgery Center board chairman Kemal Erkan said in August. An average gallbladder surgery costs $12,000 when done at a hospital, while the same procedure costs $2,200 at the surgery center, according to Erkan.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
