Higher priced practices don’t necessarily deliver higher value care

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 - Eric Roberts, PhD
Eric Roberts, PhD

The claims that larger, higher priced providers outperform lower-priced practices on quality and efficiency of care don’t hold up, according to a new study from Harvard Medical School researchers.

Published in the May 2017 issue of Health Affairs, the study from Harvard postdoctoral fellow Eric Roberts, PhD, and his coauthors examined Medicare data from Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey and commercial data from the FAIR Health survey to compare practices within the same geographic area. Their commercial prices for office visits, including payments made by insurers and out-of-pocket expenses for patients, were compared to quality among the fee-for-service Medicare population served by those practices.

The patient population examined was split nearly evenly between higher priced (17,130 patients) and lower priced (14,137) providers. The cost differences were substantial—for an office visit (coded CPT 99213), high-price practices received an average of $84.45, more than 36 percent above the lower-price practice average of $62.06.

But with that higher price came few benefits to patient experience. Of the four domains the study examined (overall ratings of care and physicians, timely access to care, interactions with primary physician, and seeing doctors within 15 minutes of scheduled appointment), the higher priced practices outperformed lower priced counterparts only in the latter category.

For care coordination and management domains, patients from higher priced practices reported only slightly better results.

“Receipt of mammography and preventive and management services for diabetes, acute care use, and total Medicare spending did not differ between patients of high and low-price practices,” Roberts and his coauthors wrote, though noting higher-priced providers had better rates of vaccination.

The results were similar when comparing providers by their size. Larger practices were on average 15 times bigger than providers identified as small (an average of 155 clinicians vs. 11 clinicians) and charged 20 percent more for office visits ($81.09 vs. $67.55). The larger providers did outperform smaller ones on vaccinations, but didn’t differ significantly on receipt of other preventive and diabetes services, use of acute care, and total Medicare spending. Larger practices actually scored worse when it came to overall ratings of care.

The findings suggested “limited gains” for patients using higher-priced practices, with larger practices able to charge more based on their market power without offering markedly better care than their smaller competitors in the same region.

Roberts and his coauthors the weak association between prices and quality goes against the positive relationship found in most other markets. This could have a negative impact on consumers who base decisions on where to receive care on prices.  

“If quality cannot be measured or conveyed as well as prices, for example, consumers may perceive higher prices to be a signal of better quality. In that scenario, our results suggest that transparency initiatives might have the unintended effect of steering patients to high-price providers who are no more efficient or not of higher quality than low-price providers,” they wrote.