To examine the relationship between market dynamics, in the form of commercial prices paid to urologists, and utilization of services, as measured by Medicare spending, in men with newly diagnosed prostate cancer.

We performed a retrospective national cohort study of Medicare beneficiaries with newly diagnosed prostate cancer between 2014 and 2019, with follow-up through 2020. The primary exposure was the commercial price index (ie, the ratio of commercial prices to Medicare prices for a common set of services performed by urologists). The primary outcome was Medicare spending for prostate cancer in the 12-month period after diagnosis.

Across zip codes, commercial prices were, on average, 190% of Medicare prices (range 102%-421%), with mean spending per beneficiary of $16,704. There was an inverse relationship between the price index and Medicare spending for men for prostate cancer. Specifically, standardized Medicare spending was $1485 (95%CI $939 to $2030) higher per beneficiary among those managed in zip codes at the bottom decile for commercial prices compared to the top decile. This effect was similar in the subgroup of men who underwent treatment, where standardized Medicare spending was $1461 (95%CI $848 to $2073) higher per beneficiary among those managed in zip codes in the bottom decile for commercial prices compared to the top decile.

Commercial prices for a set of frequently performed services are substantial higher than those paid by Medicare and vary widely across zip codes. Higher commercial prices were associated with significantly lower utilization, as measured by standardized Medicare spending, in men with newly diagnosed prostate cancer.