Treatment at a cancer center or community hospital: Which costs private insurers more?

Patients with private insurance undergoing surgery for breast, colon, or lung cancer at National Cancer Institute (NCI) centers were associated with higher insurer spending and higher 90-day post-discharge payments compared with community hospitals — and without differences in care utilization.

Researchers at the University of Pennsylvania’s Perelman School of Medicine, Abramson Cancer Center, and Leonard Davis Institute of Health Economics, as well as the Corporal Michael J. Crescenz VA Medical Center in Philadelphia, studied nearly 67,000 patients ages 65 and older who underwent common cancer surgery at an NCI center or a community hospital between 2011 and 2014. More than 75% of the patients were women, and more than 75% of all patients had their surgeries at community hospitals, 16% had their surgeries at non-NCI academic hospitals, and 8% underwent surgery at NCI centers.

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According to their findings, treatment at NCI centers was associated with higher average surgery-specific insurer prices paid compared with community hospitals ($18,526 vs. $14,772) and 90-day post-discharge payments ($47,035 vs. $41,291).

“With rising expenditures on cancer care outpacing other sectors of the U.S. health system, national attention has focused on insurer spending, particularly for patients with private insurance, for whom price transparency has historically been lacking,” researchers wrote in their report, titled “Differences in Cancer Care Expenditures and Utilization for Surgery by Hospital Type Among Patients With Private Insurance” and published Aug. 3 on JAMA Network Open. “The type of hospital at which cancer care is delivered may be an important factor associated with insurer spending for patients with private insurance.”

The study is believed to be the first to report on variations in insurer prices paid and episode spending by hospital type for privately insured patients undergoing common cancer surgery.

“Facility rather than physician payments accounted for most of the differences in spending outcomes, consistent with national trends showing that hospital payments occupy a disproportionate and growing share of overall health care spending,” researchers wrote. “These results support our hypothesis that insurer spending would be higher at NCI centers than community hospitals, possibly due to their size, market share, and prestige, affording leverage in negotiations with private payers. However, contrary to our hypothesis, there were comparable rates of post-discharge acute care utilization across hospital types, suggesting that negotiated transaction prices rather than utilization may be driving site-level differences in spending.”

A better understanding of the factors associated with prices and spending at NCI cancer centers is needed, researchers concluded.

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