In healthcare, “site of care” refers to the physical or virtual location where a medical service is delivered. It sounds straightforward, but site of care is one of the most consequential variables in the entire system. The same drug infusion, the same imaging scan, even the same minor surgery can carry wildly different price tags, safety profiles, and patient experiences depending on whether it happens in a hospital outpatient department, an independent physician’s office, an ambulatory surgery center, your living room, or a video call. Understanding the landscape of care sites, and why the differences between them matter so much, is useful whether you are a patient choosing where to get treatment or simply trying to make sense of a medical bill.
The Major Sites of Care
Healthcare can be delivered in a surprisingly wide range of settings. The most familiar is the traditional hospital inpatient stay, where you are formally admitted and occupy a bed. But the majority of healthcare encounters today happen outside a hospital bed. Hospital outpatient departments (often called HOPDs) handle procedures, infusions, and visits where you go home the same day but are technically receiving care under the hospital’s umbrella. Independent physician offices and clinics operate outside hospital walls entirely. Ambulatory surgery centers (ASCs) are specialized facilities designed for same-day surgical procedures. Urgent care centers and retail clinics handle lower-acuity walk-in visits. Skilled nursing facilities and home health agencies provide post-acute care after a hospitalization. And increasingly, the patient’s own home serves as a site of care for everything from IV infusions to acute-level medical treatment through “hospital at home” programs. Telehealth, conducted over phone or video, adds a virtual site of care that exploded during the COVID-19 pandemic and has remained a fixture since.
Each of these settings operates under different regulatory frameworks, payment structures, and staffing models. That is where the practical consequences start to multiply.
Why the Same Service Costs More at a Hospital
One of the most striking aspects of site-of-care economics is the price gap between hospital outpatient departments and other settings for identical or near-identical services. When a hospital acquires a physician practice or opens an outpatient clinic, the services provided there often get billed under the hospital’s outpatient fee schedule, which includes a “facility fee” on top of the professional fee for the physician’s work. That facility fee can roughly double the total charge for the same visit.
The gap shows up vividly in cancer drug infusions. An analysis of commercial insurance claims found that if plans had shifted all cancer infusions from hospital clinics to physician offices, they would have saved about $1.28 billion per year, a reduction of roughly 26 percent of total spending on those infusions.1PubMed. Price Differences To Insurers For Infused Cancer Drugs In Hospital Outpatient Departments And Physician Offices The pattern holds in surgery as well. For orthopedic procedures, average total costs at ambulatory surgery centers ran about 26 percent lower than at hospital outpatient departments, with technical fees alone running about a third lower.2PubMed. Ambulatory Surgery Centers Versus Hospital Outpatient Departments for Orthopaedic Surgeries In spine surgery, the savings are even steeper: decompression procedures performed at ASCs cost roughly 45 percent less overall than the same procedures at hospital outpatient departments, with facility fees alone dropping by more than half.3Journal of Neurosurgery: Spine. Medicare procedural costs in ambulatory surgery centers versus hospital outpatient departments for spine surgeries
These differences are not driven by the physician doing the work. Surgeon reimbursement stays the same regardless of setting. The gap comes almost entirely from the facility component, and it flows directly into what patients owe out of pocket through copays and coinsurance.
The Push for Site-Neutral Payment
The persistent price gap has generated a policy push known as “site-neutral payment,” which would align what Medicare or commercial insurers pay for the same service regardless of where it is performed. Congress took a first step in the 2015 Bipartisan Budget Act, which applied site-neutral rates to services at newly acquired off-campus hospital outpatient departments. But the early results were underwhelming: only about 1.5 percent of outpatient department spending fell under those site-neutral rules, and counties affected by the law did not show a meaningful change in hospital-physician integration patterns.4PubMed Central. Site-Neutral Payment Reform: Little Impact On Outpatient Medicare Spending Or Hospital-Physician Integration The exceptions and exemptions baked into the law meant most hospital outpatient spending continued unchecked.
Broader proposals are now on the table. One analysis estimated that capping commercial insurance payments at 150 percent of Medicare non-hospital rates for routine services would save purchasers and patients a combined $10.8 billion, averaging about $72 per commercially insured person per year.5PubMed Central. Site-neutral payment for routine services could save commercial purchasers and patients billions On the Medicare side, depending on which services and hospital types are included, the annual payment reductions from site-neutral reforms could range from about $212 million to $7.36 billion.6PubMed. Medicare Site-Neutral Payment Policies: Effects Of Proposals On Hospitals And Beneficiary Groups
Hospitals argue that these cuts would threaten safety-net institutions and reduce access in underserved areas. Research on which specific hospitals would be most affected confirms that the impacts are uneven, which is why the policy debate keeps circling without resolution. The core tension is real: the same reform that saves billions overall could destabilize specific hospitals that serve vulnerable populations.
How Physician Affiliation Shapes Where You Get Care
An underappreciated driver of site-of-care costs is who employs your doctor. When physicians join hospital systems, the procedures they perform tend to be billed under the hospital’s higher outpatient rate schedule. Research examining multiple high-volume procedures found that hospital-affiliated physicians were the least likely to provide care in lower-cost settings, while physicians affiliated with other models, including private-equity-backed management organizations, were more likely to use lower-cost facilities. For both Medicare and commercial insurance, the site of care contributed meaningfully to the total procedure price, which was consistently higher in hospital-based settings.7PubMed Central. Physician Practice Affiliation Drives Site of Care Cost Differentials: An Opportunity to Reduce Healthcare Expenditures In other words, the trend of physicians moving from independent practice into hospital employment has quietly shifted care into more expensive settings, even when the clinical work itself hasn’t changed.
Urgent Care and Retail Clinics as Lower-Cost Alternatives
For non-emergency conditions like sinus infections, sprains, and urinary tract infections, urgent care centers and retail clinics offer a less expensive alternative to the emergency department. Researchers have estimated that somewhere between 14 and 27 percent of all emergency department visits could reasonably be handled at these alternative sites, with potential annual savings of about $4.4 billion.8PubMed Central. Many emergency department visits could be managed at urgent care centers and retail clinics The substitution effect is measurable: one study found that having an open urgent care center in a ZIP code reduced total ED visits by local residents by about 17 percent, driven largely by drops in less-urgent conditions.9PubMed Central. The impact of urgent care centers on nonemergent emergency department visits After hours, when urgent care centers close, local non-emergent ED visits tick back up among privately insured patients, reinforcing that these centers genuinely absorb demand rather than simply adding utilization.10NBER Working Paper. Urgent Care Centers and the Demand for Non-Emergent Emergency Department Visits
Patients, however, do not always prefer these alternatives. Survey research found that people generally preferred to see a physician over a retail clinic provider and placed a high value on same-day availability. On average, a cost savings of roughly $31 would be needed to persuade someone to choose a retail clinic, and about $82 to accept waiting an extra day for care.11PubMed Central. Physician office vs retail clinic: patient preferences in care seeking for minor illnesses Convenience and trust matter, and simply building cheaper alternatives does not guarantee people will use them.
Home Infusion and Hospital at Home
Moving care into the patient’s home is one of the most active frontiers in site-of-care innovation. Home infusion, where IV medications are administered at home by a nurse or by the patient, has been studied extensively for safety. One comparison of oncology infusions found that reaction rates and acute care visits were similar between home and hospital settings, and home infusions were associated with fewer respiratory infections afterward.12PubMed Central. Infusing Safety: Comparing Oncology Infusion Outcomes at Home Infusion Services vs. Hospital-Based Outpatient Infusion Centers A broader study of home infusion patients found they were no more likely to experience adverse drug events or side effects than patients receiving infusions in medical settings, and for some conditions like hemophilia, home-infused patients had a substantially lower likelihood of hospitalization for complications.13PubMed. Home infusion: Safe, clinically effective, patient preferred, and cost saving
The picture is not perfectly clean, though. A large study of biologic infusions found that home-administered doses were associated with about 25 percent higher odds of an emergency department visit or hospital admission on the same or next day compared with facility-administered infusions. In absolute terms, that translated to roughly 0.9 extra admissions per 100 infusions.14JAMA Network Open. Comparison of Adverse Events Among Home- vs Facility-Administered Biologic Infusions, 2007-2017 The disagreement likely reflects differences in the patient populations studied and the types of drugs involved. For many patients and many drugs, home infusion appears safe. For certain complex biologics or higher-risk patients, the proximity to emergency resources at a facility may still matter.
“Hospital at home” programs take the concept further, delivering acute-level inpatient care in the patient’s residence, with daily physician visits, nursing care, IV medications, and remote monitoring. A large comparative study found that patients treated through hospital-at-home programs had dramatically lower odds of in-hospital mortality and modestly lower emergency department use compared with traditional inpatients, with no significant difference in hospital readmission rates.15JAMA Network Open. Outcomes Associated With Hospital at Home vs Traditional Inpatient Stay Remote patient monitoring technology, including wireless vital-sign devices and continuous heart-rhythm monitors, is expanding which patients can safely receive this kind of care. At Massachusetts General Hospital, for example, continuous single-lead ECG monitoring has helped extend hospital-at-home enrollment to patients with acute heart failure who previously would have required a traditional bed.16PubMed Central. The Next Frontier of Remote Patient Monitoring: Hospital at Home
Choosing a Post-Acute Care Setting
After a hospitalization, the site-of-care decision often comes down to skilled nursing facility versus home with home health services. The intuition for many patients and families is that getting home faster is better, but the evidence is more nuanced than that. When researchers used methods that accounted for the fact that healthier patients are naturally more likely to be sent home, discharge to home with home health care was actually associated with a 5.6-percentage-point higher rate of hospital readmission at 30 days compared with discharge to a skilled nursing facility. There were no significant differences in mortality or functional recovery.17JAMA Internal Medicine. Patient Outcomes After Hospital Discharge to Home With Home Health Care vs to a Skilled Nursing Facility Among skilled nursing facilities themselves, those that specialize more heavily in post-acute rehabilitation tend to produce lower readmission rates and lower mortality, though at somewhat higher cost per episode.18PubMed Central. The health effects of nursing home specialization in post-acute care
The takeaway is not that skilled nursing facilities are always better. It is that the site-of-care decision after a hospitalization involves real clinical tradeoffs, and the right answer depends on how much support a patient will have at home, how medically complex their recovery is, and how much the available nursing facility focuses on rehabilitation versus long-term custodial care.
Telehealth as a Virtual Site of Care
Telehealth introduced a genuinely new site of care that does not map neatly onto the traditional physical categories. A phone or video visit eliminates facility fees entirely and removes transportation barriers, but access is uneven. Research on chronic disease management found that patients in rural areas were about 43 percent less likely to use telehealth compared with urban patients. Medicaid enrollees were less likely to use video visits than Medicare patients, though they were more likely to use audio-only phone visits. Men, older adults, and patients with heart failure or lung disease were all less likely to use telehealth services.19PubMed Central. Telehealth for Chronic Disease Management Among Vulnerable Populations
Licensing rules further complicate access. Physicians are generally licensed by state, and the rapid expansion of telehealth during the pandemic relied on temporary emergency waivers that allowed cross-state practice. As those waivers have expired, patients near state borders, college students away from home, and people with rare diseases who need out-of-state specialists have lost access to providers they were using.20PubMed Central. Reforming Physician Licensure in the United States to Improve Access to Telehealth: State, Regional, and Federal Initiatives Several interstate compacts and federal proposals aim to fix this, but the patchwork of state regulations remains a real barrier to telehealth functioning as a fully accessible site of care.
The Workforce Problem With Shifting Care Home
Every policy conversation about moving care out of hospitals and into lower-cost settings eventually runs into the same wall: the workforce. Home- and community-based services are already the dominant approach for delivering long-term care in the United States, but the supply of workers has not kept up with demand. The home care workforce grew from roughly 840,000 to 1.42 million between 2008 and 2019, but the number of Medicaid home and community-based services participants grew faster, and the ratio of workers to participants dropped by nearly 12 percent between 2013 and 2019, with further declines during the pandemic.21PubMed Central. The Home Care Workforce Has Not Kept Pace With Growth In Home And Community-Based Services For children with complex medical needs, the gap is even more acute: a shortage of home health providers with pediatric training has led families to file legal challenges over nursing shortages.22PubMed. Home Health Care For Children With Medical Complexity: Workforce Gaps, Policy, And Future Directions
This means that the theoretical cost savings from site-of-care shifts can only be realized if the people to deliver that care actually exist and are willing to do it at the wages on offer. Expanding insurance coverage for home services without simultaneously investing in the workforce is a policy that looks great on paper and stalls in practice.
When the Site Itself Drives Health Disparities
Site of care is not just a cost variable; it can be an equity variable. Research on major surgeries, including colectomy, hip replacement, and coronary bypass, found that the hospital where care was received explained a substantial share of racial disparities in readmission rates, independent of patient-level factors. For hip replacement, hospital differences accounted for about 70 percent of the Black-white gap in readmissions.23PubMed. Racial disparities in readmissions and site of care for major surgery The implication is uncomfortable but important: reducing disparities in surgical outcomes requires not just addressing patient-level risk factors but also addressing the quality differences between the institutions that serve different communities.
Fragmentation Between Sites
One of the underappreciated costs of having so many sites of care is what happens at the seams between them. Qualitative research with healthcare professionals has documented how the lack of standardized processes and poor communication across settings leads to chaotic and unsystematic transitions when patients move from hospital to home or to another facility. Providers described feeling constrained by a fragmented system that limited their ability to deliver optimal care, with information falling through cracks at each handoff.24PubMed Central. “Did I do as best as the system would let me?” Healthcare professional views on hospital to home care transitions Hospital-at-home programs and integrated health systems attempt to solve this by keeping the patient within a single organizational umbrella even as the physical location changes, but for most patients moving between independent sites, the transitions remain a vulnerability. Medication errors, missed follow-up appointments, and duplicated tests are common consequences of care crossing organizational boundaries.
Environmental Footprint of Different Care Sites
A less obvious dimension of the site-of-care question is its environmental impact. Acute-care hospitals are among the most energy-intensive buildings in existence, running around the clock with complex HVAC systems, sterilization equipment, and vast quantities of single-use supplies. Hospital-at-home models, by avoiding that infrastructure for patients who do not need it, offer a potential pathway to reduce the carbon footprint of healthcare delivery. By sidestepping energy-intensive hospital buildings, patient travel, and the volume of single-use clinical supplies associated with facility-based care, home-based acute care could contribute to greener healthcare without compromising clinical outcomes for appropriate patients.25PubMed Central. How might Hospital at Home enable a greener and healthier future? The environmental case for site-of-care optimization is still emerging and hard to quantify precisely, but as health systems begin tracking their carbon output more seriously, where care is delivered will become part of the sustainability equation alongside how it is delivered.