Fin In con ally, trast emplo , price dif yers an ferentia d insur ls b ers cou etwee ldn mov HOPDs and e patients fro other sites of m HOPDs to treatmen other t ran sites o ged f treatm widely. ent Prby ice remov s for dru ing g t the ests HOPDs fro were 65 perc m their ent high netwo er at rk HOPDs th . Providers could an at ph respo ysician nd by l offices owerin or stan g the d-alon ir prices so t e lab facilities hat th, f ey may or example return — in to and the th is 1 netwo was thrk e bo . ttom of the range. On the high end of the range, prices for metabolic panels were 531 percent more at HOPDs th an at physican offices or stand-alone lab facilities. April 1, 2021, #393 About the EBRI Center for Research on Health Benefits Innovation Figure 2 Launched in 2010, EBRI's Center for Research on Health Benefits Innovation (CRHBI) focuses on helping Aggregate Savings (in millions) employers assess the impact that various innovations, such as through plan design and other initiatives, have Higher Lab Costs, Equivalent Value: Evaluating the Cost on cost, quality $12,000 , and access to health care. It is a think tank focused on three broad areas of research: behavioral economics, incentives, and consumer-driven health benefits. This understanding, in turn, of Lab Services in Hospital Outpatient Departments, provides a framework for solutions and action items to address the cost and value of providing health $2,246 Physici $10,000 an Offices, and Stand-Alone Lab Facilities benefits and informs policy discussions that can also best help improve outcomes. A new This stu report dy fro wm as con the Emplo ducted th yee Benefit rough the E Research BRI CRH InsBI, wit titute (h EBRI the fu ) fin ndin ds g th suppo at pay rt of th ments fro e fom t llowing hird-party payers $8,000 organizations: Aon Hewitt, Blue Cross Blue Shield Association, ICUBA, JP Morgan Chase, Pfizer, and for lab work are higher when care is provided in hospital outpatient departments (HOPDs) compared with physician PhRMA. offi ces and stand-alone lab facilities. In evaluating prices for five commonly used lab services, EBRI finds they averaged 65 percent to 531 percent higher in HOPDs than in physician offices or stand-alone lab $6,000 facilities. See ht tps://www.ebri.org/health/center-for-research-on-health-benefits-innovation for more information. $9,020 In general, allowed charges are very similar for lab services provided in either physician offices or stand-alone $4,000 The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in labs. As an example, the allowed charge for a metabolic panel was $15 in the PO and $11 in the lab. Drug tests Washington, DC, that focuses on health, savings, retirement, and economic security issues. EBRI does not lobby were the only service in which there was a significant difference in the allowed charge between POs and labs, and does not take policy positions. The work of EBRI is made possible by funding from its members and with lab rates being significantly higher. $2,000 sponsors, which include a broad range of public, private, for-profit and nonprofit organizations. For more information go to www.ebri.org or connect with us on Twitter or LinkedIn. Figure 1 $0 ### Price Differential Between Hospital Outpatient Departments vs. Employer Savings Employee Savings Physician Offices and Stand-Alone Lab Facilities 600% Source: Authors’ analysis of IBM MarketScan administrative 531% enrollment and claims data. 1 To calculate the price differential, a blended price for non-HOPD settings was used. The blended price was weighted by the 500% percentage of services provided in each setting. Had the allowed charge for drug tests in labs been equal to the allowed charge in physician offices, the price differential would have been closer to 200 percent. 402% In the aggregate, across 25 health care services examined in the report, EBRI estimates that employers and 400% workers could collectively save $11.2 billion if price differentials between HOPDs and other sites of treatment 2 See White, C., and C. Whaley. 2019. “Prices Paid to Hospitals by Private Health Plans Are High Relative to Medicare and were eliminated. Employers would save $9 billion or 80 percent of the total, whereas workers and their Vary Widely: Findings from an Employer-Led Transparency Initiative. ” Santa Monica, CA: Rand Corporation. dependents would save $2.2 billion or 20 percent. Workers and their dependents would realize 33 percent of the 300% doi:10.7249/RR3033. 246% savings in labs, 22 percent of the savings in imaging, and 3 percent of the savings in specialty medications. 200% Implications of the Analysis 143% Our findings have implications for both employers and insurers. There are a number of actions these third-party 100% 65% payers can take. First, they can exert pressure on hospitals to shift from discounted charge contracts based on a multiple of Medicare to some other prospective case rate. Employers could also exert such pressure on health 0% plans to do the same with the hospitals in their networks. Drug Test Vitamin D Lipid Panel Blood Count Metabolic Panel Screening In the absence of such market power, employers and insurers can attempt to engage patients through increased price transparency. Sourc Ho e: wever, p Authors’ rice trans analysisparen of IBcy b M Mar y it ke self has b tScan adminis een foun trativ d to e be in enrollment sufficient i and n reducing hospital 2 claims data. prices unless combined with plan design changes intended to steer patients to less costly sites of treatment. For instance, employers and insurers can use a combination of value-based insurance design and reference pricing to vary patient cost sharing based on the choices that they make regarding choice of health care provider. EBRI’s on Twitter! @EBRI or http://twitter.com/EBRI EBRI blog: https://ebriorg.wordpress.com/ E EBRI BRI o on n T Tw wi it tt ter: er: @ @E EBRI BRI o or r h ht tt tp p: :/ // /t tw wi it tt ter er.com .com/ /E EB BRI RI Bl Blo og g: : h ht tt tp ps s: :/ // /e eb br ri io or rg g..w wo or rd dp pres ress s.co .com/ m/ © 2021, Employee Benefit Research Institute, 901 D St. SW, Suite 802, W ashingto n, DC 20024, 202/659-0670 www.ebri.org2 3