Across the country and in Colorado, hospitals are buying up independent physician practices, driving up prices and insurance costs. As a physician, this trend troubles me and will only get worse if no action is taken. That’s why, as Congress plans to enact health care reform and pass government funding bills in the coming weeks, they should take steps to ensure patients pay the same price for the same health care services.
Hospital consolidation is everywhere these days. Between 1998 and 2022, more than 1,800 hospital mergers occurred in the United States. In 2022, Colorado-based SCL Health merged with Intermountain Health and CommonSpirit Health acquired St. Elizabeth Hospital in Fort Morgan. Just last month, UCHealth merged with Parkview Health System.
But hospitals aren’t just acquiring other hospitals, they’re also acquiring independent doctors’ offices and clinics. In fact, more than half of all physicians are currently employed by hospitals and health systems.
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A majority of doctors are “very concerned” about increased hospital and clinic consolidation, the survey shows. The main reason I’m concerned is the increased costs for patients and taxpayers: When physician offices are acquired by hospital systems, costs increase by an average of 14.1%.
Why does this happen?
When a hospital system purchases a free-standing office, they can label the office as an “outpatient department” of the hospital. They can provide the exact same health care services and even continue to employ the exact same doctors, but now the hospital-owned offices are charging higher prices just because they have a “hospital” sticker on the door. The facility may be located far from the hospital building. It’s just owned by it.
In the short term, patients may receive higher than expected bills for services…and in the long term, we all end up paying more in insurance premiums as these additional charges are added to our already astronomical health care costs.
Let’s be clear: Quality of care does not necessarily improve in these cases. But the cost does. In the short term, patients may receive higher than expected bills for services. These increased costs are especially surprising when patients receive their usual care at the same location they would go to, but that location has been acquired by a large health system. In the long run, we all end up paying more for insurance as these additional costs are added to our already astronomical health care costs. Because Medicare charges more for care in a “hospital” setting, taxpayers must pay more as well.
Of course, from a physician’s perspective, beyond inequity and financial concerns, there are concerns that these trends are preventing patients from seeking the care they need. When patients receive higher-than-expected payments for routine care, they may determine that they can no longer afford to receive that care. Health conditions they had control over may become worse, more painful, and more difficult to care for later on.
In 2022, 38% of Americans said they or a family member had delayed treatment because of cost, the highest rate since the survey began in 2001. No one should forgo life-saving or life-enhancing medical care because of cost.
Thankfully, there are common-sense, bipartisan solutions to this problem. The concept of “site-neutral payment” is that patients should not pay more simply because they receive the same health care services in a setting labeled as a hospital. Simply put, patients should receive the same services at the same price.
In December, the U.S. House of Representatives passed the Lower Costs, Improved Transparency Act to address site-neutral payments and increase hospital price transparency. The legislation has overwhelming bipartisan support but has yet to pass the Senate. So as Congress continues to debate health care and government funding priorities ahead of the March 8 deadline, doctors like me hope they can enact policies similar to key provisions of the Cost Lower Transparency Act.
Over the next month, Congress has a critical opportunity to support site-neutral payments. Patients should have peace of mind that they will receive the same health care at the same price.