Prices for many common medical procedures are higher in areas where physicians are concentrated into larger practice groups, according to a new study.
The October 聽examined the average county prices paid by preferred provider insurance organizations in 2010. It focused on聽 15 high-volume, high-cost medical procedures across a variety of specialties, including vasectomy, laparoscopic appendectomy, colonoscopy with lesion removal,聽nasal septum repair, cataract removal and knee replacement. The prices studied reflected the negotiated prices between the PPOs and the聽physician groups, including payments made by聽both the plan and the patient. The average price聽ranged from聽$2,301聽for a total knee replacement聽to $576聽for a vasectomy.
The researchers also used an index to measure competition among physician practices at the county level that is based on the number and size of practices. They then examined the association between procedure prices and the concentration of physicians in larger practices.
In 12 of the 15 procedures, prices were 8 to 26 percent higher in counties with the highest average physician concentration compared to counties with the lowest average concentration, the study found. The three procedures where there was no significant relationship between physician competition and price were intensity-modulated radiation therapy, shoulder arthroscopy and kidney stone fragmentation.
Although larger practices may have the resources to provide benefits to patients through better care coordination or access to new technologies, among other things, these practices鈥 greater market power may enable them to charge higher prices than smaller practices, the study authors said.
This study adds to the growing body of research that demonstrates for the same procedure or test based on a number of factors, including where a procedure is performed and who performs it.
For consumers, who increasingly face medical deductibles of $1,000 or more — in addition to copayments and coinsurance —聽the price of a procedure may be聽important聽in determining where to have it performed, says Laurence Baker, chair of the department of health research and policy at Stanford University and co-author of the study.
鈥淧rices for procedures that people commonly get vary a lot,鈥 he says. 鈥淭o the extent you have time, there are plenty of cases where you can save thousands of dollars鈥 by shopping around.
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