Negotiated Rates for Surgical Cancer Care in the Era of Price Transparency-Prices Reflect Market Competition.

Rochlin DH, Rizk NM, Matros E, Wagner TH, Sheckter CC. Negotiated Rates for Surgical Cancer Care in the Era of Price Transparency-Prices Reflect Market Competition. Annals of surgery. 2023 Sep 4.

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• RCS 17-154 – Career Scientist Award

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Abstract:

OBJECTIVE: To measure commercial price variation for cancer surgery within and across hospitals. SUMMARY BACKGROUND DATA: Surgical care for solid organ tumors is costly and negotiated commercial rates have been hidden from public view. The Hospital Price Transparency Rule, enacted in 2021, requires all hospitals list their negotiated rates on their website, thus opening the door for an examination of pricing for cancer surgery. METHODS: This was a cross-sectional study using 2021 negotiated price data disclosed US hospitals for the ten most common cancers treated with surgery. Price variation was measured using within- and across-hospital ratios. Commercial rates relative to cancer center designation and the Herfindahl-Hirschman Index at the facility level were evaluated with mixed effects linear regression with random intercepts per procedural code. RESULTS: 495,200 unique commercial rates from 2,232 hospitals resulted for the ten most common solid-organ tumor cancers. Gynecologic cancer operations had the highest median rates at $6,035.8/operation compared to bladder cancer surgery at $3,431.0/operation. Compared to competitive markets, moderately and highly concentrated markets were associated with significantly higher rates (HHI 1501-2500, coefficient $513.6, 95% CI, $295.5 - $731.7; HHI > 2500, coefficient $1,115.5, 95% CI, $913.7-$1,317.2). National Cancer Institute designation was associated with higher rates, coefficient $3,451.9 (95% CI, -$2,853.2-$4,050.7). CONCLUSIONS: Commercial payer-negotiated prices for the surgical management of 10 common, solid-tumor malignancies varied widely both within and across hospitals. Higher rates were observed in less competitive markets. Future efforts should facilitate price competition and limit health market concentration.