Hospitals Doubling the Cost for Patients

It's true that hospital acquisitions of private practices will lead to more efficient health care; but it also means higher prices in some cases.

It’s true that hospital acquisitions of private practices will lead to more efficient health care; but it also means higher prices in some cases.

The health care industry is going through a major overhaul. The number of solo practitioners is dwindling as physicians decide they can no longer cut it alone, or simply don’t want to bother trying any more.

The changes driving physicians to hospital employment, remain declining reimbursements, less stress and investments like electronic medical records and other new technology.

What the Wall Street Journal uncovered is that as physicians are brought into hospital systems, patients can find the price of services jump. When services are billed as hospital outpatient procedures, the cost can sometimes double.

The Journal writes:

“The result is that the same service, even sometimes provided in the same location, can cost more once a practice signs on with a hospital.”

Hospital systems can negotiate higher rates with private insurers for physician services than an independent doctor would be able to. According to the Journal, the difference can vary from 5% or less to between 30% to 40%.

In California, the rates for services for one group of physicians that came under the umbrella of Sutter Health system skyrocketed, increasing by 140%.

The price increases don’t end with just the health insurers: acquisitions tying a doctor to a hospital system likely result in higher Medicare spending. The program pays more for some services that are performed in a hospital facility.

“Medicare pays substantially more for certain services if they are performed at hospital facilities. A 15-minute doctor visit, for instance, cost the program about $70 last year at a free-standing practice, but the same visit ran about $124 if it was billed as hospital-outpatient, according to the Medicare Payment Advisory Commission. That difference can bump up reimbursements after an acquisition, if a hospital system upgrades a clinic to become an outpatient facility, or moves services into a hospital site.”

Read more:

Same Doctor Visit, Double the Cost