Arizona Tribune - New Study: Hospital Affiliation Key Driver of Surging Cost of Outpatient Care

WASHINGTON, DC / ACCESS Newswire / July 24, 2025 / A groundbreaking peer-reviewed study published today in Journal of Market Access & Health Policy reveals that hospital-affiliated physicians across four specialties are far more likely to perform procedures in high-cost hospital outpatient departments than in lower-cost ambulatory surgery centers or medical offices.

The study -- "Physician Practice Affiliation Drives Site of Care Cost Differentials: An Opportunity to Reduce Healthcare Expenditures" -- also details drastic differences in cost between sites of care and thus suggests that hospital-affiliated physicians are the highest-cost providers of outpatient services across those four specialties.

"Our research makes clear that the site of care -- and whether the physician delivering that care is employed by a hospital -- are key drivers of healthcare spending," said Dr. Paul Berggreen, an author of the study and president and board chair of the American Independent Medical Practice Association. "These findings make a powerful case for eliminating payment disparities for the same services delivered in different outpatient settings for the benefit of patients and our healthcare system."

The study analyzed Medicare fee-for-service data and commercial claims for 32 high-volume procedures in cardiology, gastroenterology, orthopedics, and urology. These specialties were selected for three reasons. First, Medicare beneficiaries commonly seek care from specialists in these fields. Second, each specialty comprises physician practice models that are both affiliated and unaffiliated with hospitals. Third, the high-volume procedures examined are routinely performed in multiple settings, including HOPDs, ASCs, and physician offices, according to 2022 commercial claims data.

The study found that Medicare beneficiaries treated by hospital-affiliated physicians had just a 37% chance of receiving care in the lowest-cost setting across the four medical specialties examined.

The cost implications are massive. According to the study, hospital outpatient departments receive reimbursement from Medicare that is up to 861% of the reimbursement that ambulatory surgery centers or physician's offices receive. Commercial insurance pays HOPDs as much as 1,346% of the reimbursement that ASCs or doctor's offices receive.

Hospitals have come to dominate the physician marketplace. Between 2019 and 2024, they acquired 7,600 physician practices. More than half of doctors nationwide are now employed by hospitals or health systems.

"Hospitals' structural payment advantage is driving independent physician practices out of business -- and resulting in higher costs for patients and payers," said Dr. David Eagle, an author of the study and vice president of AIMPA. "I hope our research spurs greater interest among policymakers in site-neutral payment reform and in establishing a more sustainable payment structure to preserve the vitality of independent medical practice -- and the ability of patients to access high-quality, affordable care."

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To read the study -- "Physician Practice Affiliation Drives Site of Care Cost Differentials: An Opportunity to Reduce Healthcare Expenditures" -- please visit the Journal of Market Access & Health Policy's website.

About the American Independent Medical Practice Association
The American Independent Medical Practice Association is a physician-led national advocacy organization representing more than 600 independent medical practices that provide quality, affordable health care for more than 25 million patients each year.

These independent practices are critical access points for health care across the country -- at more than 4,200 medical office locations and over 575 independent ambulatory surgery centers in 45 states and the District of Columbia.

We advocate on behalf of more than 12,000 physicians caring for patients in the fields of Primary Care and Internal Medicine as well as the specialties of Cardiology, Dermatology, Gastroenterology, Hematology/Medical Oncology, Nephrology, Neurosurgery, Ophthalmology, Oral and Maxillofacial Surgery, Orthopedic Surgery, Otolaryngology, Radiation Oncology, Urology, Urgent Care, Vascular Medicine, and Women's Health.

Media Contact
Brigit Wolf
[email protected]
(202) 980-9256

SOURCE: American Independent Medical Practice Association

View the original press release on ACCESS Newswire

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