Costs for common healthcare procedures higher in hospital outpatient departments

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When common medical procedures are performed in a hospital outpatient department (HOPD) rather than a doctor's office, costs are substantially higher, according to a national analysis of tens of millions of claims. 

The analysis, released by the Blue Cross Blue Shield Association, shows the costs for prevalent procedures like mammograms or colonoscopies were consistently higher – as much as 58% more expensive – when performed in HOPD settings. These higher hospital prices mean higher costs to consumers.

To examine the cost disparities at different healthcare locations, BCBSA analyzed de-identified claims data for six common, everyday outpatient procedures, covering 133 million Blue Cross and Blue Shield members from 2017 through 2022.

Findings show that not only were HOPDs charging more for the exact same service, but prices also increased faster each year compared to charges at physician offices and ambulatory surgery centers (ASCs), where patients receive outpatient diagnostic procedures, as well as outpatient surgical care.

A number of significant price differences were uncovered. Mammograms cost 32% more in an HOPD than in a doctor's office, for instance. Colonoscopy screenings cost 32% more in an HOPD than in an ASC and double the cost compared to when performed in a doctor's office, while diagnostic colonoscopies cost 58% more in an HOPD than in an ASC and more than double the cost when performed in a doctor's office.

Cataract surgery costs 56% more in an HOPD than in an ASC. Ear tympanostomies cost 52% more in an HOPD than when performed in an ASC, and clinical visits cost 31% more in an HOPD setting than in a doctor's office.

WHAT'S THE IMPACT?

With roughly 40 million mammograms and more than 15 million colonoscopy screenings performed in 2022, implementing site-neutral payment policies would lead to significant savings, the analysis found.

This data is consistent with previous research. A study by University of California-Berkeley found that the prices paid in 2019 by Blue Cross Blue Shield Plans in HOPDs were double those paid in doctors' offices for biologics, chemotherapies and other infused cancer drugs – 99% to 104% higher – and 68% higher for infused hormonal therapies.

And a 2016 study in the American Journal of Managed Care showed prices for seven common services were significantly higher at an HOPD than in a physician's office, ranging from 21% more for an office visit to 258% more for a chest radiography.

The BCBSA analysis shows site-neutral legislation could save patients, businesses and taxpayers roughly $500 billion over 10 years.

One key driver of these cost differences is the acquisition of physician practices by corporate health systems over the past 20 years, which has resulted in those physician practices being converted into HOPDs, thereby generating additional facility fees and higher prices overall, BCBSA found. 

On top of that, Medicare pays more for services provided in HOPDs than it does when the same services are provided in other care settings outside of the hospital, which BCBSA said costs patients and Medicare hundreds of billions of dollars.

THE LARGER TREND

BCBSA came out in support of bipartisan legislation in the U.S. House of Representatives and the U.S. Senate to enact fair hospital billing policies, from Reps. Kevin Hern (R-Okla.) and Annie Kuster's (D-N.H.) in the FAIR Act and from Senators Maggie Hassan (D-N.H.) and Mike Braun's (R-Ind.) in the SITE Act.

Also, earlier this year, BCBSA released Affordability Solutions for the Health of America, a set of proposals it said could reduce healthcare costs for patients, consumers and taxpayers by $767 billion over 10 years. This, the organization said, can be achieved by expanding site-neutral payments for outpatient services, improving competition, increasing access to lower-cost prescription drugs and ensuring patients receive high-quality care.

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com