Medical Student Vanderbilt University School of Medicine Vanderbilt Medical School Nashville, TN, US
Introduction: The Centers for Medicare and Medicaid Services issued the Transparency in Coverage Final Rule to enhance price transparency for patients seeking common medical and surgical services, including lumbar decompression procedures like single-level laminectomy. Our objective was to investigate the potential impact of price transparency and hospital competition on laminectomy prices using a novel combination of datasets.
Methods: A cross-sectional analysis examined hospital pricing data for laminectomy procedures (CPT 63005) utilizing the Turquoise Health database, encompassing commercial, government-sponsored, and cash rates. We selected hospitals reporting both commercial and self-pay prices, correlating this information with hospital competition metrics from the Healthy Marketplace Index. To account for regional variations, prices were normalized using the 2023 Practice Expense Geographic Practice Cost Index. To rule out hospitals publishing charges instead of cash discounts, we conducted an additional analysis focusing on hospitals with a cash-to-commercial ratio < 2 (CCR < 2).
Results: Of 887 hospitals reporting laminectomy costs, 250 (28.2%) provided both commercial and cash prices (full cohort). Within this group, 69 (27.6%) had a CCR < 2. The full cohort's median commercial price was $10,039 (IQR:5,369-15,122) vs. $18,390 (IQR:10,807-22,314) for CCR < 2 hospitals (p <.001). Median cash prices were $8,268 (IQR:4,281-12,295) for the full cohort and $5,966 (IQR:3,943-10,442) for CCR < 2 (p <.001) (Table 1). In the CCR < 2 subgroup, all hospitals offered cash discounts relative to median negotiated commercial rates (Figure 1). Less concentrated hospital markets showed higher median commercial and cash prices compared to more concentrated markets (Figure 2).
Conclusion : Only 28% of U.S. hospitals performing laminectomies offered comprehensive pricing transparency. Among these, competitive markets demonstrated reimbursement rates closer to Medicare levels, suggesting that competition can effectively lower elective spine surgery prices. The observed median cash prices below commercial rates indicate potential cost-saving opportunities for payers by offering lower prices and for providers by potentially streamlining the billing process for hospitals and insurers.