Home E-Weekly July 1, 2014

ASCs' Outpatient Services Priced Far Below Those of Hospitals

Published: June 30, 2014

Hospital outpatient departments typically charged much more than ASCs charged for the same services, regardless of whether the patient populations being treated were sicker, finds a recent study published by the National Institute for Health Care Reform.

Researchers examined health plan spending in 2011 by General Motors, Chrysler, Ford and the United Auto Workers in 18 metropolitan areas. They found, for example, that the average price for a basic colonoscopy was $1,383 in hospital outpatient departments, but only $625 in ASCs. For a comprehensive metabolic panel, hospital outpatient departments charged about $37, versus $13 in ASCs and doctors' offices. Hospitals also charged $900 for knee MRIs, while freestanding centers charged about $600.

Additionally, prices charged by hospitals varied widely among competitors in the same cities, challenging the notion that higher prices are simply a result of higher overhead. "We believe that a large part of the difference in the pricing is the fact that the hospitals can get away with charging higher prices," James Reschovsky, PhD, a co-author and a senior fellow with Mathematica Policy Research, told Modern Healthcare.

The authors also note that hospitals have been increasingly acquiring physician practices and ASCs, "resulting in more and more services being paid at higher hospital outpatient rates" and giving hospitals greater market power.

Jim Burger

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