Study: Medical prices higher in areas with more large doctor groups

Prices for many common medical procedures are higher in areas where physicians are concentrated into larger practice groups, according to a new study (Source: “Medical Prices Higher In Areas Where Large Doctor Groups Dominate, Study Finds,” Kaiser Health News, Oct. 9, 2015). 

The October Health Affairs study examined the average county prices paid by preferred provider insurance organizations in 2010. Researchers found that for12 of the 15 procedures studied, prices were 8 to 26 percent higher in counties with the highest average physician concentration compared to counties with the lowest average concentration.

Although larger practices may have the resources to provide benefits to patients through better care coordination or access to new technologies, among other things, these practices’ greater market power may enable them to charge higher prices than smaller practices, the study authors said.

The study focused on 15 high-volume, high-cost medical procedures across a variety of specialties, including vasectomy, laparoscopic appendectomy, colonoscopy with lesion removal, nasal septum repair, cataract removal and knee replacement. The prices studied reflected the negotiated prices between the PPOs and the physician groups, including payments made by both the plan and the patient.