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Insurers’ cost for chemotherapy varies across delivery location
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Delivering infused chemotherapy in a physician’s office cost commercial health insurers less than chemotherapy administered in a hospital outpatient setting, according to results published in JAMA 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. [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,” Aaron N. Winn, PhD, assistant professor of pharmacy administration in the department of clinical sciences at the Medical College of Wisconsin, and colleagues wrote.
“Hospitals justify this payment difference because they incur higher overhead costs and treat more medically complex patient populations.”
However, critics argue value of care should determine reimbursement not overhead expenses.
Winn and colleagues studied 283,502 patients who initiated infused chemotherapy treatments and were continuously enrolled for 6 months from 2004 to 2014.
Researchers analyzed costs across three levels:
- Line item drug level;
- Day level (sum of all expenditures on the day that a patient received chemotherapy; and
- 6-months treatment-episode level (sum of reimbursements for all services received within 6 months after treatment initiation).
Researchers categorized patients as receiving treatment at a physician’s office, hospital outpatient department or other location. Patients were excluded if they received chemotherapy in both an outpatient hospital setting and physician’s office or if the location of treatment was unknown.
Patients who received chemotherapy in a physician’s office were older (mean age, 54 years vs. 51 years; P < .001) and had statistically lower comorbidities (comorbidity score of 0, 95% vs. 94%, P < .001).
The rate of private insurance patients who received infused chemotherapy in hospital outpatient departments increased from 6% of infusions in 2004 to 43% in 2014.
Across all levels of measured spending, patients treated in hospital outpatient departments had increased spending by insurers:
- Drug level spending was $1,466 (95% CI, $1,457-$1,474) among patients treated in offices compared with $3,799 (95% CI, $3,761-$3,836) among patients treated in outpatient departments;
- Day level spending was $3,502 (95% CI, $3,490-$3,515) among patients treated in offices compared with $7,973 (95% CI, $7,927-$8,019) among patients treated in outpatient departments; and
- Total reimbursement during the 6-month treatment-episode was $43,700 (95% CI, $42,885-$44,517) among patients treated in offices compared with $84,660 (95% CI, $82,969-$86,352) among patients treated in outpatient departments.
A sensitivity analysis of patients with breast cancer found similar results.
The main limitation of the study was the inability to identify if facility fees influenced cost differences. Other limitations included lack of data on stage of cancer and quality of care and variations between sites of therapy.
“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. – by Cassie Homer
Disclosures: The authors report no relevant financial disclosures.
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