Here in Colorado, and across the United States, our health care system faces yet another alarming trend as costs continue to skyrocket: large hospitals are buying small physician practices, then charging patients more to access the exact same care there.
As a nephrologist, who takes care of patients on dialysis and with chronic kidney disease, I am concerned over the outrageous cost of health care preventing my patients from accessing the care they need. I am calling on our leaders in Congress to take action.
The news of one hospital system buying up another over the last few years seems inescapable as health care mergers become even more common. In 2009, 26 Colorado hospitals were part of a larger system. In 2022, that number increased to 46. It’s not just hospitals buying each other though. Small physician practices are being purchased, too. The majority of physicians are employed by large hospital systems now. Care for patients is being shifted from lower-cost options in regular physician offices to small “outpatient departments” of hospitals.
In Denver, most independent physician practices have been purchased or become affiliated with hospital systems. This is true in Colorado Springs as well, where very few independent practices remain. More than 70% of the 1,000 physicians practicing in El Paso County now work for hospitals, UnitedHealth, or a private equity-funded group.
It’s important to note that these mergers and acquisitions haven’t been shown to increase quality of care — just costs for it. This isn’t lost on doctors. We know it’s just a new way for big hospitals to game the system and make more money. But people receiving care — our patients — may not realize the level of impact these acquisitions have.
For example, if a patient needs regular screenings to detect cancer or other conditions for which they’re at risk, they might go to an appointment at their doctor’s office, get the same screening they’ve gotten before, but get a bigger bill because that office had become part of a larger health system, and thus an “outpatient department.” They may not be expecting these higher out-of-pocket costs for the same service. Why would they when they got the exact same thing at the exact same location?
The numbers are shocking. On average, prices go up by 14.1 percent when hospital systems purchase local doctor’s offices. Medicare pays 194 percent more for an echocardiogram in a hospital outpatient department than in a typical independent doctor’s office. For an epidural injection in the lower back, Medicare paid $255.89 when the service was provided in a physician’s office, but $740.88 when it was provided in a hospital “outpatient department.”
It’s not just Medicare patients affected, though, it’s privately insured ones, too. When hospital systems take over physician offices, they often charge privately insured patients an additional “facility fee” to cover non-physician services, such those provided by medical assistants. Such fees can increase the average price for an ultrasound to $339, from $164. They can increase the price of a biopsy from $146 to $791. Thankfully, here in Colorado, lawmakers passed legislation to help curb facility-fee price gouging, but more work needs to be done to protect patients.
That’s because patients are losing billions of dollars to large health care systems via out of pocket costs and higher premiums. As health care costs continue to increase, premiums for everyone increase.
As doctors, we are sadly familiar with how health care prices negatively impact our patients. When patients are afraid they can’t afford their care, they often just skip it. If that patient who got the exact same regular screenings at the exact same location gets a new higher bill, he might decide the screenings aren’t worth it anymore. The issue his doctors were trying to prevent may worsen, causing him more suffering and pain.
But Congress can act to help fix this. Everyone can agree that patients shouldn’t be charged two or three times more for the same health services at the same location, just because it’s under hospital ownership. It’s a bipartisan issue of fairness: patients shouldn’t be charged more for the same care just because of where they receive it.
Let’s call on our leaders to put patients ahead of large hospital profits. By passing common sense solutions such as the Lower Costs, More Transparency Act, Congress can save patients billions of dollars and make our system more fair.
Yolanda Bogaert, M.D., lives in Denver.
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