News: Negotiated and cash prices lower at physician-owned hospitals, new study shows

Median commercial negotiated prices were 33.7% lower at physician-owned hospitals (POH) in comparison with non-physician-owned hospitals, according to a new study published in JAMA Network Open. Likewise, cash prices were 32.7% lower. In general, POH status was associated with 17.5% lower negotiated prices and 46.7% lower cash prices, HealthLeaders reported.

Researchers used data from 156 POHs and 1,115 non-POHs located in 78 hospital referral regions, expecting to find that POHs would have higher prices than their competitors. They examined the following eight CMS-designated shoppable services at each facility:

• Spinal injection
• Physical therapy–therapeutic exercise
• MRI scan of lower spinal canal
• CT scan of abdomen and pelvis
• Comprehensive metabolic panel
• Blood test-clotting time
• Emergency department visit level 3
• Emergency department visit level 4

The study shows the biggest cost differences in commercial negotiated prices between POHs and non-POHs were found in MRI services (33% less at POHs) and physical therapy services (30% less at POHs). For cash prices, CT services cost 36% less and MRI services cost 35% less at POHs.

Researchers noted that POHs might be able to accept lower commercial prices because they have fewer Medicaid patients and provide less charity care. The data showed 3% of patients were Medicaid patients at POHs in comparison to 7.1% of non-POH patients, and less charity care at 1.3% versus 3.2%, respectively.

Editor’s note: To read HealthLeaders’ coverage of this story, click here. To read the JAMA study, click here.