“…Medicare reimbursement rates, which are cost‐based, were (in 2007 dollars) $650 for colonoscopy and $350 for sigmoidoscopy (AHRQ, ). Private insurers pay more, and there are significant profit margins on endoscopy services, especially in outpatient settings (Luchtefeld and Kim ); thus, physician groups have formed to offer these services in competition with hospital outpatient departments (Berenson, Bodenheimer, and Pham ). Sigmoidoscopy was the incumbent endoscopy procedure, whereby the provider inserts a thin, lighted tube into the rectum to examine the lower third of the colon while the more recent colonoscopy procedure involves a longer, flexible tube to examine the entire colon.…”