Cooperating for better care.

Health Care Cost Institute

Tag Archives

Rise in hospital-employed oncologists boosts drug costs



Woman receiving chemotherapy.


For Kaiser Health News

If you have cancer, chances are your outpatient chemotherapy costs are higher if your oncologist works for a healthcare system than if she has her own practice, a recent study found.

The study by researchers at the University of Chicago analyzed private-sector health- insurance claims data from the Health Care Cost Institute, a nonprofit research organization, and national data about consolidation among physicians and hospitals between 2008 and 2013.

It found significant consolidation between outpatient oncology practices and healthcare systems in the decade leading up to 2013. The researchers linked that to a rise in spending on drug-based cancer care. Each 1-percentage-point increase in the proportion of medical providers who were affiliated with a hospital or health system was associated with a 34 percent increase in annual average spending per person on outpatient cancer drug treatment, they reported.

Part of the rise was fueled by the facility fees that hospitals and their outpatient clinics routinely add on to the bill, the researchers said.

“Provider consolidation must be changing the ability of providers in a market to extract higher prices [from insurers] for outpatient cancer therapy,” said Rena Conti, an assistant professor at the University of Chicago and lead author of the study, which was published by the Health Care Cost Institute in February. The study controlled for the volume of patients and the mix of cancers, among other things, she noted.

Spending on chemotherapy drugs has been in the news lately as some cancer specialists and patient-advocacy groups have strenuously objected to a proposal by Medicare to change how it pays for drugs that are covered under Part B, the program’s outpatient benefit.

This study suggests that for patients, it may be more cost-effective to get chemotherapy treatments at a community-based practice rather than a hospital or hospital-affiliated clinic, Conti said.

“Patients are increasingly shifting toward high-deductible health plans, and that suggests they’re paying a higher percentage of the costs for these therapies as the prices are going up,” she said.


A more granular look at local healthcare costs

By JORDAN RAU, for Kaiser Health News

A long-established belief about health costs is that some areas of the country, like McAllen, Texas, are expensive, while others like San Francisco are cheap. But an analysis released Wednesday provides evidence that prices can be exorbitant for some medical services and bargains for others—all in the same place.

The study from the Health Care Cost Institute, a Washington-based nonprofit, found discrepancies within some of the 41 areas of the country it studied using its rare data trove–billing claims from three of the biggest commercial insurers. Together the records show insurance payments for a quarter of the people under 65 who got their coverage through their employers between 2011 and 2013.

The study divided bills into inpatient care — services provided to overnight patients in hospitals and nursing facilities — and outpatient care done in labs, clinics, ambulatory surgery centers and at hospitals for patients who weren’t admitted. The study did not include any professional fees billed independently by doctors.

The researchers found that some areas had both high inpatient and outpatient prices in comparison to the other regions. Those included Bridgeport, Conn.; Boulder, Denver and Fort Collins in Colorado; Dallas and El Paso in Texas; Milwaukee; and Philadelphia. Other places had prices that were low in both inpatient and outpatient settings, including Louisville, Ky.; New Orleans, Peoria, Ill., St. Louis, and Tucson, Ariz.

But elsewhere, it was not so easy to categorize a region as high or low cost with just one composite measure. Inpatient prices were below average while outpatient prices were above average in Corpus Christi, Texas; Green Bay, Wis.; Lakeland and Miami in Florida; and Trenton, N.J.

The reverse was true in Orlando and Jacksonville in Florida.

“To say this area’s really good versus that area’s really bad is a little bit unfair because it ignores the underlying factors,” said Eric Barrette, the institute’s director of research. He said the discrepancies were possible because inpatient and outpatient care can be separate markets that are not competing with each other.

The findings were notable because the study is one of the few using private commercial insurance data. Until recently, most evaluations of spending levels in places were based on Medicare trends, even though Medicare sets consistent prices so the only differences are in the levels of use. This approach led to McAllen’s identification as a high cost area in a much cited New Yorker article, which was influential as the health law was being drafted. (McAllen was not one of the areas in the new study.)

For each of the areas, the institute published a Health Marketplace Index showing prices and the use of medical services for both outpatient and inpatient care. The study found that the level of use and the prices did not correlate, but did not delve into what factors—such as the intensity of hospital competition—might be driving price differences.

The study was funded by the Robert Wood Johnson Foundation, a New Jersey-based philanthropy.

Painful shifting of costs to patients


A Los Angeles Times story notes:

“Though much has been made of a slowdown in the rate at which U.S. healthcare costs have risen in recent years, that trend hasn’t translated into financial relief for patients.

‘”The overall cost to everybody has slowed, but one of the reasons they’ve slowed is that there’s been a shifting of costs to patients,’ says Paul Ginsburg, director of public policy with the University of Southern California’s Schaeffer Center for Health Policy and Economics.”

‘”We’re reaching a backlash, because there is only so much pressure you can put on consumers,’ says David Newman, executive director of the Healthcare Cost Institute, a non-partisan, nonprofit organization in Washington, D.C.”

Contact Info

(617) 230-4965

Wellesley, Mass