News & Updates

February 22, 2021

Employee Benefit Research Institute: Location, Location, Location: Cost Differences in Health Care Services by Site of Treatment — A Closer Look at Lab, Imaging, and Specialty Medications

  • Takeaways: 
    • In the aggregate, employers and workers would collectively save $11.2 billion if price differentials between HOPDs and other sites of treatment were eliminated (Figure 14). Employers would save $9 billion or 80 percent of the total, whereas workers and their dependents would save $2.2 billion or 20 percent. Workers and their dependents would realize 33 percent of the savings in labs, 22 percent of the savings in imaging, and 3 percent of the savings in specialty medications. (Page 14)
      • Employers and workers could reduce their spending on lab services by between 12 percent and 69 percent, depending on the type of lab service, if price differentials between HOPDs and other sites of treatment were eliminated.
      • When it comes to imaging, savings could be as high as 56 percent for chest X-rays, 49 percent for echocardiogram, and 41 percent for DEXA scanning. 
      • For MRI-related imaging, savings amounted to 39 percent for imaging for low-back pain, 34 percent for imaging for uncomplicated headache, 28 percent for MRIs of the spine, and 25 percent for MRIs of upper and lower joints. Savings for mammography would be as high as 17 percent, and for colonoscopy they would be 15 percent.
      • If site-of-treatment price differentials for specialty medications were eliminated, employers and workers would save between 4 percent and 36 percent, depending on the medication
  • In addition would love to include this part somehow: “This analysis is important because care is shifting from POs to more costly hospital outpatient departments (HOPDs). For example, in 2004, approximately 94 percent of chemotherapy infusions were administered in physicians’ offices (POs), but by 2014, that percentage had dropped to 57 percent with a corresponding shift toward HOPDs. Compounding the shift in care from POs to HOPDs is the fact that prices for hospital-based outpatient care are growing faster than physician prices. A recent study found that between 2007 and 2014, prices for hospital-based outpatient care increased 25 percent, while physician prices grew 6 percent. Ultimately, employers and workers bear the brunt of cost differences when HOPDs perform services that can be provided in less costly POs or in stand-alone lab or imaging facilities (page 6).”

Read the Study: Location, Location, Location: Cost Differences in Health Care Services by Site of Treatment — A Closer Look at Lab, Imaging, and Specialty Medications

Research