Corporations see profit in acquiring physician practices

Hospital bills blindside millions of Americans for doctor appointments that do not require setting foot inside a hospital. Research suggests that when hospitals acquire physician practices, professional fees increase. With the addition of facility fees, the total cost of care to the patient also increases.

Economic forces have driven consolidation as hospital systems gobble up physician clinics. According to the Physicians Advocacy Institute, three out of four physicians are now employed by hospitals, health systems, or other corporate entities. And less competition usually leads to higher prices.

One study found that prices for the services physicians provide increase by 14 percent after a hospital acquisition. Another study found that billing for laboratory tests and imaging, such as MRIs or CT scans, rises sharply after practice is acquired.

Patients who get their labs drawn in a hospital outpatient department are charged up to three times what they would pay in an office.

At least eight states agree these charges are questionable. They have implemented limits on facility fees or are moving to clamp down on the charges. Among them are Connecticut, which already limits facility fees, and Colorado, where lawmakers are considering a similar measure. Together, the initiatives could signal a wave of restrictions similar to the movement that led to a federal law to ban surprise bills, which took effect last year.

Generally, patients at independent physician clinics receive a single bill that covers the physician’s fee and overhead costs. But when a hospital owns the clinic, the patient receives separate bills for the physicians and facility fees. In some cases, the hospital sends a single bill covering both fees. Medicare reduces the physician’s payment when a facility fee is charged. But private health plans and hospitals don’t disclose how physician and facility fees are set.

This is just another example of healthcare for profit and shareholders. It won’t stop because there is to much money to be made with an aging population who prefers pills over healthy lifestyles.