Feb. 23 (UPI) -- Commercial health insurers pay less for infused chemotherapy in a physician's office than those administered in a hospital outpatient department, according to a university's findings.
Medical College of Wisconsin researchers studied 283,502 patients nationwide who initiated infused chemotherapy treatments and were continuously enrolled for six months from 2004 to 2014. The findings were published Thursday in the Journal of the American Medical Association's Oncology.
"The impact of price variation because of the site of care -- receiving treatment in a physician office vs. a hospital outpatient department -- is an important driver of health care spending," researchers wrote in the study. "Although patients may receive the same treatment in either setting, insurers typically reimburse payments to [hospital outpatient departments] at a higher rate than to physician offices.
Researchers analyzed the cost of treatment on the day a patient received chemotherapy and six months of treatment episodes. The researchers excluded patients who received chemotherapy in an outpatient hospital setting and physician's office or if the location of treatment was unknown.
"Hospitals justify this payment difference because they incur higher overhead costs and treat more medically complex patient populations," the researchers wrote. "Critics argue that the value of the services provided, rather than overhead expenses, should determine prices."
Patients who received chemotherapy in a physician's office were older and had lower comorbidities.
Here are the price differences:
-- Line-item drug level spending was $1,466 among patients treated in offices compared to $3,799 at the hospital.
-- Day level total spending was $3,502 among patients treated in offices compared to $7,973 among patients treated in outpatient departments.
-- Total reimbursement during the six-month treatment episode was $43,700 among patients treated in offices compared with $84,660 in outpatient departments.
The researchers note that they could not measure quality of care from the data they reviewed.
"Potential targets for reduction of excess spending and creation of a more efficient health care system can come from private insurers following Medicare's lead, which has started to equalize payments across sites of care," the researchers wrote.