Going to the ER when there is not a real emergency is expensive. We have heard that for years, and it’s true. That is why plans limit benefits, charge higher deductibles or refuse coverage if there is no admission. Some patients use the hospital emergency room as a primary care physician even when there may be hours waiting for care.
The cost problem of hospital-based services goes beyond the ER.
… For these and many other services, the higher HOPD payments directly lead to higher out-of-pocket spending for patients and higher health care costs for the system writ large.
Importantly, these site-based incentives also encourage vertical integration – with hospitals purchasing physician practices and converting them to HOPDs to garner higher payments. This consolidation increases the pricing power of large hospital systems, enabling them to demand higher prices in negotiations with commercial insurers.
Moving the commercial market toward site-neutral payment policies would reduce NHE, allowing for lower premiums and cost sharing. With premiums falling, employers would also likely shift a share of worker compensation from non-taxable health care benefits to taxable wages, increasing government revenue.
In full, policies that encourage site-neutral payments in the commercial insurance market could:
Source: Site Neutral Payments
- Reduce total national health expenditures (NHE) by up to $458 billion.
- Reduce commercial premiums by up to $386 billion and patient cost sharing by $73 billion.
- Reduce the federal budget deficit by up to $117 billion.
QUINNSCOMMENTARY 
“With premiums falling, employers would also likely shift a share of worker compensation from non-taxable health care benefits to taxable wages, increasing government revenue.”
The only place employers are going to shift any savings in premiums is to the profit column or inflation will require higher payments in other areas of day to day operations.
I’m not sure any of the savings will ever materialize as inflation drives up cost of medical care, food, housing, utilities, and transportation, there is not much left for any wants.
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I wonder about this study. Doesn’t my HMO already basically do site neutral payments? I needed an EKG for knee surgery two years ago. Of the various imagining centers around me, I had to go to the hospital to get the EKG done. Yet, when I was working, I had a 12 lead EKG done every year at my work site. My HMO usually pays pennies on the dollar billed anyway so does it matter if you are not admitted? I guess that the only other place to get it done in my county is in a cardiologist office. I have had done this years before.
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Content is thought-provoking but I got lost by abbreviations — HOPD (which I was able to guess at) and NHE (which was defined near the bottom).
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