Hospital Outpatient Department Costs Consistently Outpace Offices, ASCs

Given the significant difference between cost of care in hospital outpatient department settings compared to other settings for the same services, site-neutral payments could reduce healthcare spending, an analysis from Blue Cross Blue Shield Association (BCBSA) found.

The researchers from Blue Health Intelligence, BCBSA’s data analytics and software-as-a-service company, assessed data from 133 million commercially-insured lives. The data spanned 2017 to 2022, except for office visit data which came from 2014 to 2022. The researchers excluded Medicaid and Medicare Advantage beneficiaries.

More specifically, they assessed the change in price over time for six service categories and tracked the cost in the hospital outpatient department (HOPD) setting compared to the cost in an ambulatory surgery center (ASC) or a provider’s office. The six categories were: mammography, colonoscopy screening, diagnostic colonoscopy, cataract surgery, ear tympanostomy, and clinic visit.

The results were revealing: across all six categories, HOPD care cost significantly more than care delivered in an ASC or provider office setting.

“The cost of a procedure shouldn’t be determined by the setting where the care is delivered,” David Merritt, senior vice president of policy and advocacy at BCBSA, said in the press release.

“Lowering the cost of care, regardless of the site, is common sense. Our analysis shows site-neutral legislation could save our patients, businesses and taxpayers nearly $500 billion over 10 years. We look forward to continuing our work with Congress to protect patients from these higher costs.” 

In 2017, the allowed cost of mammograms offered in the provider office setting was $196, but in the HOPD setting it was $246. By 2022, these figures had changed to $217 and $287, respectively.

The difference between HOPD costs and other settings’ costs grew only more disparate in other service categories.

In 2022, allowed costs for colonoscopy screenings were $611 in the provider office, $925 in the ASC setting, and $1,224 in the HOPD setting. Diagnostic colonoscopies had allowed costs of $785 in the provider office, $1,040 in the ASC setting, and $1,646 in the HOPD setting.

For clinical visits, the researchers noted that the trend remained the same. HOPD costs were 31 percent higher than in the office setting. However, this was the only category in which the growth in office setting costs outpaced HOPD cost growth.

Unbundling HOPD prices may result in lower costs in some service categories. For colonoscopies, facility fees boosted the HOPD allowed cost by 47 percent because providers billed technical services separately.

Based on these results, BCBSA supported implementing site-neutral payments and fair hospital pricing policies. Specifically, the payer organization advocated for the bipartisan SITE Act in the Senate and the bipartisan FAIR Act. BCBSA included site-neutral payments in its recommended policy solutions at the beginning of 2023.

“The Blue Cross Blue Shield Association is committed to building a more affordable, equitable, better system of health. These commonsense solutions address the root causes of rising health care costs and prioritize the needs of patients,” Merritt added.

The results align with previous studies including UnitedHealth Group’s analysis of the benefits of ambulatory surgery centers.