One of the strongest and least visible drivers of healthcare costs is where care is delivered. Patients often assume that the price of a test or procedure is tied to the service they receive. In reality, the same service can cost dramatically more depending on the setting, even when the experience and clinical outcome are otherwise indistinguishable.
Why care setting matters
Most routine care is delivered in one of three settings:
- Doctor’s office: A physician-owned or independent clinic that provides outpatient care without hospital facility fees
- Ambulatory Surgery Center (ASC): A freestanding facility focused on same-day procedures, typically lower cost and more standardized
- Hospital Outpatient Department (HOPD): A clinic or surgical site that is owned by or affiliated with a hospital system. These settings can bill additional hospital facility fees
From a patient perspective, it can be difficult or impossible to tell the difference between an ASC, an office, and an HOPD. The building, staff, equipment, and even the physician may be the same. The price, however, often is not.
What the data show
A national analysis of more than 100 million claims demonstrates a consistent pattern: when routine procedures move from a doctor’s office or ASC into an HOPD, costs rise substantially, even though the service itself does not change.
According to the study of 133 million commercially insured members from 2017 to 2022, HOPDs charged more, and increased prices faster, than other outpatient settings. In 2022 alone, average prices were higher in HOPDs for common services. Examples include:
- Mammograms cost 32% more in an HOPD than in a doctor’s office.
- Colonoscopy screenings cost 32% more in an HOPD than in an ASC and double the cost compared to when performed in a doctor’s office
- Diagnostic colonoscopies cost 58% more in an HOPD than in an ASC and more than double the cost compared to when performed in a doctor’s office
- Cataract surgery costs 56% more in an HOPD than in an ASC
- Ear tympanostomies (ear tubes) cost 52% more in an HOPD than when performed in an ASC
- Clinical visits cost 31% more in an HOPD setting than in a doctor’s office
These differences matter at scale. Each year, roughly 40 million mammograms and 15 million colonoscopies are performed in the U.S. Even modest per procedure price gaps translate into billions of dollars in avoidable spending for patients, employers, and public programs.
How Premera is responding:
Premera is focused on helping members and employers navigate these differences and avoid unnecessary costs by:
- Educating members about care setting options so they can choose high-quality, lower-cost clinics and centers when appropriate
- Advocating for transparency and payment reform that reduces unwarranted price variation across the healthcare system
- Improving cost and quality visibility in the provider directory so members can better understand expected procedure costs and provider performance before receiving care
