In a continued review of the February 25th, 2014 article in the magazine Medical Economics entitled “Monopolizing Medicine”, we will now focus on the higher costs of hospital-owned physician practices.
Below is an excerpt from the above article:
“In May 2013, the Denver Post reported on a patient who received the same cardiac stress test twice from the same cardiologist. The first test, when the physician was independent, cost about $2,100. The second test, performed a year later after the practice was purchased by a local hospital, cost more than $8,000, mostly because of an added facility fee by the hospital, the newspaper reported.
A March 2013 report by the Medicare Payment Advisory Commission, an independent Congressional panel that oversees Medicare, acknowledged that an office visit with a physician in a hospital outpatient department is reimbursed at a rate 80% higher than the same procedure performed in a physician’s office.”
The article goes on to explain that hospitals try to justify these higher costs as “necessary to cover the costs of the services provided (or available) to patients after the medical practice has become part of a hospital system.”
However, these services were available to patients prior to the medical practice becoming part of a hospital. In the above example of a cardiac stress test, if the scan detected a potential heart artery blockage, the patient would be able to have a cardiac catheterization performed at the hospital—no different before or after the practice was a part of the hospital system. In fact, after the hospital buys the practice, it may simply limit the options for the patient. Before, the doctor and the patient could have chosen from 2 or 3 hospitals where the cardiologist admits to, now the patient only has one choice.
What does this mean for employee benefits professionals and healthcare consumers?
- As you plan for ‘trend’ in your medical claims, know that you are doing so on a backdrop of a potential 80% increase in outpatient office visit costs.
- As you budget for your own out-of-pocket costs, ask about potential tests and costs up front and do not accept ‘I don’t know’ as an answer—it may cost you $8,000.