Hospitals absorb medical practices, raise prices
By David Wenner, The Patriot-News, Harrisburg, Pa. | |
McClatchy-Tribune Information Services |
It was an easy thing to miss. But if you use or pay for health care -- that means everyone -- it will affect you.
Many of these family practices, cardiology groups, imaging centers, etc. were once independent. They provided choice and at least potential for competition.
Now they are part of hospital systems.
PinnacleHealth System, for example, absorbed the 12 offices and 65 doctors of the former Heritage Medical Group. It absorbed entities including
Hospitals argue that such consolidation can provide a remedy for the many different "silos" which long characterized the U.S. health care system, and resulted in many mistakes and inefficiencies.
Still, there's the disturbing fact that costs of services often rise after a hospital acquires a medical practice -- even if the only obvious change is the name on the building. Additionally, there are economic incentives to refer patients to other doctors or services within the system -- even if those services cost more or aren't as good as those available from other health care providers.
It's part of a wave of consolidation happening all over the country. There's much optimism it will lead to better health care at a lower cost.
Yet history has shown that costs often go up when doctors join with hospitals.
It's being driven by forces including the Affordable Care Act, or Obamacare, which are transforming the payment system so that health care providers are rewarded for taking good care of people rather than for volume. At the same time, government and private insurance company efforts to cut costs, and the lingering effects of the economic downturn, have cut into health care spending, creating a historic level of pressure on hospitals and doctors to operate more efficiently.
These have encouraged hospital systems to offer the full range of health care services -- from the intensive care unit to the family doctor to the blood lab.
PinnacleHealth, for example, wants a PinnacleHealth family doctor within ten minutes of everyone in the region, PinnacleHealth specialists and services such as blood labs within 20 minutes, and a PinnacleHealth hospital within 30 minutes.
That's why the
One historic aspect of the landscape shift is the flow of doctors into employment by hospitals and hospital systems.
Traditionally, most doctors worked in privately-owned solo or group practices. They had privileges at one or more hospitals, but didn't work for the hospital. The main exceptions were academic medical centers such as
Five years ago, about 75 percent of
"A lot of people don't realize how many physicians are now employed by these systems," says
Multiple forces are pushing doctors to health systems. Many younger doctors prefer a regular schedule and relief from on-call demands of a smaller practice. More than half of new doctors are women, who place high value on work-life balance and family life. Medical malpractice insurance costs are a factor.
So is the new emphasis on concepts such as "medical homes" and "accountable care" organizations. These are being pushed by the Affordable Care Act,
It's not impossible for independent practices to be involved. But it can require outside expertise, more staff and expensive technology, which can be difficult for smaller entities to afford.
For patients, a potential downside is they might not be able to consistently see the same doctor, or the doctor of their choice. Moreover, some doctors worry about being pressured to see more and more patients, or being forced to practice medicine according to corporate dictates.
Health systems argue such integration has many advantages over the old, fragmented system.
PinnacleHealth spokeswoman
A burst of hospital-doctor integration took place during the 1990s. Various studies have looked at the results.
A widely-cited study by the
When a hospital system affixes its name, charges can rise
As hospital systems acquire practices, they can label it an "outpatient" department of the hospital and charge the hospital price.
For example,
Insurers say this causes health insurance premiums to rise. "The cost of those procedures can go up 50 percent, 200 percent, and that absolutely does happen," says
Some hospitals systems add extra charges in the form of a "facility fee."
State Rep.
Four central
Johnson explained that different, more expensive regulations pertain to hospitals and hospital-owned entities. In addition, hospital facilities often deal with sicker patients and thus need emergency response capacity. When a hospital acquires a practice, it often makes significant investments to electronically connect it to the hospital, to satisfy regulations, and to improve the level of service to patients.
"Essentially, it costs the hospital more to open up a department of the hospital than it would if the physician just did it on their own," Johnson says.
A spokesman said the extra charge is needed to "recover a greater percentage of our costs from
Still, a commission that advises
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