Cancer medicines cost nearly twice as much in hospital outpatient facilities than in physician offices in the commercial market, according to a new study from the Employee Benefit Research Institute Center for Research on Health Benefits Innovation. These cost differences were not driven by a difference in the severity of illness, but were driven by hospital pricing practices.
The study also found:
- Hospital outpatient facilities charged 1.3 to 4.3 times more than physician offices for cancer medicines.
- Employers and payers could save $9,766 per covered cancer patient in just one year if they paid physician office prices rather than hospital outpatient facilities prices for physician-administered cancer medicines.
- Employers could cut their medicine costs nearly in half without affecting quality of care if patients shifted toward physician offices, since nearly half of oncology therapy takes place in hospital outpatient facilities.
This study underscores just how much hospitals are driving health care spending in the United States by marking up medicines. A recent analysis found hospitals charge, on average, five times their cost for medicines, driving up cost sharing and premiums for patients across the country.
Katie Koziara is a director of public affairs at PhRMA focusing on the organization’s executive visibility work and media relations strategy. She previously ran the social media strategy for a D.C.-based non-profit working on federal management and leadership issues. Katie earned her B.A. in Public Policy from the University of Michigan’s Ford School and is currently earning her M.A. in Fiction Writing from Johns Hopkins University.