John R. Graham

By Filed under Health Care Costs on June 27, 2014

Have you ever wondered why hospitals are buying up physician practices?

Behind all the chatter about Accountable Care Organizations (ACOs) and Value-Based Purchasing (VBP) and who knows how many other TLAs (three-letter acronyms) lies something much more elementary: Arbitraging the price differences between doing a procedure in a physician’s office versus in a hospital. New research has quantified the differences:

Average hospital outpatient department prices for common imaging, colonoscopy and laboratory services can be double the price or more for identical services provided in a physician’s office or other community-based setting, according to a study from the nonpartisan, nonprofit National Institute for Health Care Reform (NIHCR).

The average hospital outpatient department price for a basic colonoscopy, for example, was $1,383 compared to $625 in community settings, according to the study. For a routine blood test — a comprehensive metabolic panel — the average price in hospital outpatient departments was triple the price — about $37 compared to $13 in community settings.

(National Institute for Health Care Reform)

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