The Hidden Cost of Hospital Owned Physician Practices

While I always suspected hospitals' rush to establish or buy out physician practices was simply to make more money, I focused in the past on costs of establishing uncecessary practices for the sole purpose of grabbing market share. (See the series on Adventist Health). Now, I have concrete evidence of how hospital owned practice nearly doubles the costs of health care, just by the way they bill patients for services. I'll write an article for the site later, but my proof is a relative's cardiology services bill that shows doubled cost for every standard procedure that she has, even for the same CPT codes after hospital buy out at the end of last year. Something as simple as a finger prick test to check blood clotting time because of Coumadin (a medication that thins the blood to help prevent stroke) went from $31 to $71. Office visit of moderate severity went from $112 to $274. Lack of transparency and doubling costs of care simply for the sake of more money is one more example of the state of ethics in healthcare today.

Independent practice is disappearing as corporate hospital systems grab up more practices or push established physicians out of practice. In the case of local surgeons, if you divert all the referrals to your own hospital-owned surgical practices, it leaves independent surgeons in the situation of having their revenue and patient numbers slashed while their expenses rise to the point where they will either limp along by cutting back staff, cancelling plans to purchase electronic medical record systems to improve patient care, and other cost-cutting efforts -- or end up essentially forced to join the ranks of hospital owned practices. The hospital swoops in like circling vultures aggressively recruiting those practices promising them relief, electronic records, benefits and profit in these challenging times. They do it not for the benefit of the struggling physician, or the patients, but for the money the hospital will make off those physicians.

It makes me sick. What angers me even more is the way every one turns a blind eye to it which allows the trend to continue growing. There is a reason we have laws like Stark, anti-trust laws, anti-kickback laws to protect patients and the integrity of healthcare. Hospitals have found the ultimate loophole that allows them to essentially practice in ways those laws were designed to prevent.

If you have noticed your doctors' office with a different name on the bill, or some other indication they have been bought out by a larger system (it may not be the name of the hospital system) or see your insurance being billed higher amounts for the same procedures you have had in the past, ask questions. Then, help educate your government representatives about what is happening. Until patients rise up to protest this, it will continue to happen under the radar.