You have probably received a letter from one of your doctors stating that they “have joined” a larger health organization. They reassure you that this won’t affect you, and that your experience won’t change a bit. If that doctor was an independent neurologist, and is now employed, there will be constraints on your care that you have never experienced before. And that neurologist will be put in a bind he or she did not anticipate. Because that neurologist is no longer free to send you to whomever they wish. And you will likely have to pay additional “facility fees” to see them. This will amount to an average of an 80% increase for an office visit, and the testing done at the hospital will be much more expensive than in a free-standing center.
So the doctor’s “administrative change” affects you in two ways.
- More expensive — Hospitals have used their power to write rules in their favor. They receive around three times as much for outpatient services like MRIs. Since patients generally pay a percentage of the billed cost, you pay more for the same thing.
- Referrals limited to their “in-house” partners — HMO’s got a very bad reputation a few years back because they limited patients’ choice of specialists and service providers, often to a single choice. With hospital-owned “private” practices, it’s the same thing all over again. Even if your insurance lets you see any specialist on a long list, your primary care physician has strong incentives to make sure you see a specialist in their new parent organization.
A new investigation in the Charlotte Observer makes this point very clearly.
- Higher costs impact what’s covered — When Medicare or private insurers see costs go up, their response is always to further limit patients’ coverage. They raise co-pays or make it harder to get services approved.
- Hospitals are gobbling up private practice clinics for business reasons: By trapping patients within their self-referring system, they keep all their medical dollars in their own coffers. This means remaining independent doctors see fewer referrals, making it all the more likely they’ll sell out to a hospital. There is a financial reason for hedge funds buying hospital chains–because they make money hand over fist.
Some say the trend of hospitals buying up independent practices is changing. In Kansas City, about 45% of physicians remain independent, without real restriction in their referral choices.
But large hospital chains are still trying to make incursions into community hospital systems that have taken care of communities for years. And when they do, the door slams shut for patients wanting the best care close to home. When one of those hospital chain acquisitions is made, either of a hospital or a doctor’s practice, the price of health care in that community inevitably goes up.
And the irony is that even as we speak, in a diverse health care market like Kansas City, the “big” are even trying to get bigger, acquiring more turf and control of more patients without any real value added. Even centers that were formerly academically sponsored, and previously dependent on cooperation with the surrounding communities for referrals, are being pulled into the vortex of expansion. This is true even as patients, insurers, and federal programs are beginning to realize that hospital care equates with expensive care. Care we as a population can no longer afford.