Chet Cedars
Across the country and here in Colorado, hospitals are buying independent physician practices, driving up prices and insurance costs. As a physician, this trend troubles me, and it’s only going to get worse without action. That’s why, as Congress aims to enact health care reforms as well as pass government funding bills in the next few weeks, they should include measures to ensure patients pay the same price for the same health care services.
Hospital consolidation is happening everywhere we look these days. Between 1998 and 2022, there were more than 1,800 hospital mergers in the U.S. In 2022, Colorado-based SCL Health merged with Intermountain Health, and CommonSpirit Health acquired Fort Morgan’s St. Elizabeth Hospital. Just last month, UCHealth merged with Parkview Health System.
But hospitals aren’t just buying other hospitals, they’re also buying up independent physicians’ offices and clinics. In fact, over half of physicians are now currently employed by hospitals and health systems.
Surveys show that most doctors are “very concerned” about the rise in hospital and practice consolidation. The main reason for my concern is the increased cost to patients and taxpayers: Costs increase by an average of 14.1% when a physician’s office is acquired by a hospital system.
Why does this happen?
When hospital systems buy independent offices, they can label that office a hospital “outpatient department.” They can offer the exact same health care services, even continue employing the exact same physicians, but now the hospital-owned office charges a higher price just because of the “hospital” label on the door. The facility may be nowhere near the hospital complex. It’s just owned by it.
Let’s be very clear: The quality of care doesn’t necessarily go up in these cases. But the cost does. In the short term, patients may receive higher-than-expected bills for their services. These increased fees are especially surprising when patients receive routine care at the same location they’ve been going to, but after the location has been acquired by a large health system. In the long term, as these additional fees are added to our already astronomical health care costs, we all end up paying more for insurance premiums. And because Medicare is charged more for care administered in “hospital” settings, taxpayers have to foot higher bills too.
Of course, beyond the unfairness and the financial concern is the fear, from a physician’s perspective, that these trends are preventing patients from seeking the care they need. When a patient gets a higher bill than expected for routine care, they may determine that they can no longer afford to receive that care. Their manageable health condition may get worse, more painful, and more difficult to care for later.
In 2022, 38% of Americans reported that they or a family member postponed treatment due to cost, a record since the survey started in 2001. Nobody should have to forgo life-saving or life-improving medical care due to cost.
Thankfully, there are commonsense, bipartisan solutions to this issue. “Site-neutral payments” is the notion that patients shouldn’t be charged more for the same health care service just because they receive it at a setting labeled as a hospital. Simply put, patients should receive the same service for the same price.
In December, the U.S. House of Representatives passed the Lower Costs, More Transparency Act to address site-neutral payments and increase hospital price transparency. This legislation passed with overwhelming bipartisan support, but has not yet been passed in the Senate. So, as Congress continues to debate health care and government funding priorities before the March 8 deadline, physicians like me hope they include policies that resemble the key provisions of the Lower Costs, More Transparency Act.
In the coming month, Congress has a key opportunity to support site-neutral payments. Patients should be assured that they’ll receive the same health care services for the same prices.
Dr. Chet Cedars is a retired family physician in Lone Tree. This
commentary is republished from Colorado Newsline under a Creative Commons license.
