---
title: "Dear Chicagoland: Stop Paying Hospital Prices for Routine Care"
description: Chicago employers are overpaying for routine care. Learn how shifting site of service and building physician-led networks can cut costs and improve outcomes.
image: https://blog.dspins.com/hubfs/AdobeStock_83197330.jpeg
---
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[Blake Erickson](https://blog.dspins.com/author/blake-erickson) [Employee Benefits](https://blog.dspins.com/tag/employee-benefits)
3 Minutes
## Dear Chicagoland: Stop Paying Hospital Prices for Routine Care
Dear Chicagoland: Stop Paying Hospital Prices for Routine Care
6:27
If you run payroll anywhere from The Loop to Lake County, you’re paying too much for the same care your people could get safely, often better, outside the hospital campus. Not because you’re careless. Because our market is wired to push routine services into the most expensive settings and then send the bill to employers.
Here’s the blunt version: consolidation plus misaligned incentives = inflated unit prices and the wrong site of care. And it’s costing your plan millions that should be going to wages, growth, and retirement matches...not “facility fees” and parking garages.
# What the data show (Chicago is its own case study)
A new analysis of the Chicago market lays it out clearly. Compared with the national picture, a bigger share of our specialists are tied to hospital systems—58% here versus 45% nationally (for GI, it’s 65% in Chicago vs. 32% nationwide). Pair that with a dominant commercial payer footprint (HCSC with ~75% of the individual market and 80% of the group market), and you get a recipe for higher prices and fewer community options.
When you anchor care with scaled, non‑hospital physician groups, outcomes and spend look very different. In Medicare, patients attributed to Duly Health and Care physicians had, on average, 24.8% lower total risk‑adjusted annual expenditures (about $7,777 less per patient), with fewer inpatient days and ED visits, and more timely follow‑up after discharge.
On the commercial side, it gets even more obvious. In Chicago, colonoscopies were about 20% more likely to be performed in hospital settings than the national average, even though a hospital outpatient colonoscopy averaged ~$2,159 versus ~$577 in an office and ~$1,345 in an ASC. Same CPT code. Same procedure. wildly different prices.
Imaging tells the same story: more than 70% of these services occur in hospitals locally, despite the office being cheaper (e.g., bilateral screening mammogram ~$343 in HOPD vs. ~$222 in the office).
The punchline from the [paper](https://advisory.avalerehealth.com/insights/white-paper-health-system-consolidation-and-employer-payer-considerations): non‑hospital, multispecialty groups can deliver coordinated care at lower overall cost, but the system we’ve built nudges people to costly hospital sites. That’s fixable with employer action.
(Transparency note: the analysis was funded by Duly Health and Care; Avalere retained full editorial control. )
# Why this is absurd (and solvable)
Hospitals are indispensable for trauma, ICU, and complex surgery. They are not the right default for a diagnostic scope or an MRI. Yet our plans, networks, and navigation tools, often designed to be “carrier and patient friendly,” not “employer‑efficient"; still funnel routine volume into hospital outpatient departments.
We then act surprised when renewals go up 15% and employees delay care because deductibles keep rising. That’s not a healthcare problem; it’s a purchasing problem.
# A 12‑month employer playbook to flip the default
You don’t need a moonshot. You need an operating plan:
1. **Make site‑of‑care the default.** Waive cost share for office/ASC imaging, GI, and MSK where quality is equivalent. Pre‑certs should route *to* community sites, not just “approve everything.” (Your TPA and nurse line should book the appointment, not hand out phone numbers.)
2. **Build a physician‑led core network.** Anchor primary and specialty care with a scaled, non‑hospital multispecialty group. Tie navigation and scheduling to that core so members don’t bounce into hospital outpatient by accident. The Medicare data show the coordinated model pays off.
3. **Direct‑contract the high‑volume shoppables.** Colonoscopy, advanced imaging, joint bundles. You know the codes; set the rates; publish them. Close the loop with real appointment access, not just a PDF of “centers of excellence.”
4. **Rewrite incentives.** Member incentives (zero‑dollar copays in preferred settings), clinician incentives (follow‑up inside 14 days post‑discharge), and vendor incentives (fees tied to steerage and total cost, not call volume).
5. **Measure leakage like it’s money—because it is.** Monthly scorecards on: percent of imaging/GI/MSK done in office/ASC; hospital outpatient share by CPT; avoidable ED; post‑discharge follow‑ups. If it moves, keep it. If it leaks, fix it.
# A local blueprint (Chicago‑ready)
- **Core care:** a physician‑led, non‑hospital group with aligned primary and specialty access, convenient outpatient procedural capability, and same‑week imaging.
- **Network design:** broad for protection, narrow for *navigation*. Members experience a curated front door, not a scavenger hunt.
- **Benefit design:** zero‑copay preferred sites; nominal copays elsewhere; explicit exclusions for facility‑fee add‑ons when a lower‑cost site is appropriate.
- **Administration:** a TPA and care navigation partner willing to direct‑schedule into the preferred options and report savings transparently.
- **Governance:** quarterly employer‑clinician reviews to track outcomes, member experience, and cost per episode.
# What this is not
This isn’t anti‑hospital. It’s pro‑fit‑for‑purpose. Use hospitals for what hospitals are built to do. Use community medicine for everything else. The data say we can do that here and save real money without sacrificing quality.
# Call to action
If you’re a Chicagoland CFO or HR leader, take one concrete step this quarter:
- Pull 12 months of your imaging, GI, and MSK claims.
- Sort by site of service.
- Price out what those same episodes would have cost in an office/ASC with a physician‑led core network and direct scheduling.
If the gap doesn’t startle you, call me and I’ll buy the coffee. If it does, let’s re‑platform your plan and return those dollars to your people and your P&L.
—
*Blake Erickson*
Concerned Benefits Advisor | DSP Insurance Services
*Sources: Avalere Health Advisory, “Chicago Provider Market Trends: Considerations for Employers,” June 2025 (funded by Duly Health and Care; Avalere retained editorial control). Key Chicago findings on consolidation, payer concentration, cost/utilization differences for Duly‑attributed patients, and site‑of‑care price differentials in GI and imaging are cited above.*
Link to referenced report: [https://advisory.avalerehealth.com/insights/white-paper-health-system-consolidation-and-employer-payer-considerations](https://advisory.avalerehealth.com/insights/white-paper-health-system-consolidation-and-employer-payer-considerations)
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