Location, Location, Location: Spending Differences for Physician-Administered Outpatient Medications by Site-of-Treatment

Why does the same specialty medication cost so much more depending on where it’s administered? This study examines reimbursement differences for physician-administered outpatient drugs and finds that hospital outpatient departments are typically paid substantially more than physician offices for the same treatments. Using 2023-2024 commercial claims data, the analysis estimates that reducing these site-of-treatment payment differences could generate billions in savings for employment-based health plans while preserving access to the same clinical care. The findings inform ongoing discussions around specialty drug spending, site-neutral payments, employer health costs, and health care affordability.