Image by Sasin Tipchai from PixabayAmbulatory surgery centers (ASCs) can play an important role in reducing health care spending, with facility-level data showing steep price differences between hospital outpatient departments and surgery centers for the same procedures.
This is according to a new report from Trilliant Health that looked across five common outpatient surgeries and found that ASC rates were consistently lower than those at hospitals. And while ASC rates were lower in aggregate, the analysis found significant variation from facility to facility, even within the same metropolitan area.
The report used the federal Transparency in Coverage (TiC) dataset to compare commercial payer-negotiated rates across more than 3,400 surgery centers and 2,600 hospitals.
“Variation from hospital to hospital and from surgery center to surgery center highlights the need for facility-level data to drive informed health care purchasing decisions, whether by an employer or individual,” researchers noted.
For example, a diagnostic colonoscopy performed at a surgery center averaged $1,179, compared with $3,633 at a hospital outpatient department, a 67.5% savings per procedure.
With nearly 2 million colonoscopies billed annually in the commercial market, the price gap represents more than $4.5 billion in potential savings each year, researchers added.
“Across the five outpatient surgeries that were examined, the national median surgery center rate was always lower than the median rate for hospital outpatient departments,” researchers wrote. “With nearly 2 million colonoscopies billed as CPT 45378 in the commercial population every year, the aggregate absolute price difference likely exceeds $4.5 billion in potential savings for a single procedure in a single year.”
Other procedures showed similar gaps. Median negotiated rates for hernia repair were $3,241 at ASCs compared with $7,414 at hospitals, while knee replacements cost $17,750 at ASCs versus $21,791 in hospital outpatient settings.
Examples from individual markets also illustrated the spread.
In Chicago, colonoscopy rates ranged from $562 at North Shore Endoscopy Center to $9,691 at local hospitals, underscoring the importance of facility-level comparisons. In Portland, Oregon, a knee replacement cost as little as $13,035 at an ASC and as much as $39,852 at a hospital.
Since most Americans get their insurance through work, the study said employers have a duty to make sure they’re getting good value when buying health care.
“Taken as a whole, these results reveal a startling spread in pricing for healthcare services that begs for explanation, not rationalization or justification,” researchers wrote. “If health care value is defined as the relationship between the health outcomes achieved and the cost of delivering those outcomes, then logically the extreme variation in healthcare prices for the same service … is an example of waste.”
The report also found that higher prices do not necessarily mean better outcomes.
“Our analysis reveals that measures of aggregate hospital price and quality are not correlated with one another,” researchers wrote. “More expensive hospitals do not necessarily provide higher quality care.”
