Determinants of Commercial Prices for Common Radiation Therapy Procedures

Purpose: Using hospital-reported price data, we analyzed whether various market factors including radiation oncology practice consolidation were associated with higher commercial prices for radiation therapy (RT).

Methods and materials: We evaluated commercial prices paid by private insurers for 4 common RT procedures-intensity modulated RT (IMRT) planning, IMRT delivery, 3-dimensional RT (3D-RT) planning, and 3D-RT delivery-reported among the 2096 hospitals in the United States that deliver RT according to the Medicare Provider of Service file. To assess price variation within hospitals, we evaluated the ratio of the 90th percentile price to the 10th percentile price among different private insurers. To assess regional variation, we similarly compared median commercial prices at the 90th and 10th percentile hospitals in each Hospital Referral Region. We generated multivariable models to test the association of various hospital, health system, regional, and market factors on median hospital commercial prices.

Results: A total of 1004 hospitals (47.9%) reported at least 1 commercial price for any of the 4 RT procedures considered in this study. National median commercial prices for IMRT planning and IMRT delivery were $4073 (interquartile ratio [IQR], $2242-$6305) and $1666 (IQR, $1014-$2619), respectively. Prices for 3D-RT planning and 3D-RT delivery were $2824 (IQR, $1339-$4738) and $616 (IQR, $419-877), respectively. Within hospitals, the 90th percentile price paid by a private insurer was 2.3 to 2.5 times higher on average than the 10th percentile price, depending on the procedure. Within each Hospital Referral Region, the median price at the 90th percentile hospital was between 2.4 and 3.2 times higher than at the 10th percentile hospital. On multivariable analysis, higher prices were generally observed at hospitals with for-profit ownership, teaching status, and affiliation with large health systems. Levels of radiation oncology practice consolidation were not significantly associated with any prices.

Conclusions: Commercial prices for common RT procedures vary by more than a factor of 2 depending on a patient's private insurer and hospital of choice. Higher prices were more likely to be found at for-profit hospitals, teaching hospitals, and hospitals affiliated with large health systems.