Opinion: Patients Shouldn’t Be Charged More by Hospital-Owned Practices Than Physician-Owned Practices

Like many other industries, health care is becoming increasingly dominated by fewer, larger corporations. Large hospitals and health systems are merging, and swallowing up smaller physician practices, like your local doctor's clinic. As a physician who is an independent small-business owner of a solo practice, I've watched the corporatization of health care grow over 25 years in Austin. It now predominates, and I'm gravely concerned. This increasing tendency to form monopolies is raising costs for patients in Austin, and across America. Patients are paying the price.

Patient care is being shifted from physician-owned offices to hospital-owned "outpatient departments." They are in office buildings, not a hospital. It may be the same office the patient visited last year. But hospitals charge more than physicians for the same office-based procedures when they own the practice. I've witnessed this with alarming frequency in Austin. My colleagues have been forced to sell their practices to large hospital corporations out of economic necessity. A hospital buys out the physician's practice, puts a new sign on the door, and then starts raising prices.

Our disjointed health care system creates these different paths for reimbursement for hospitals versus independent practices. The system, which is complicated and often nonsensical, means hospitals are paid about 15% more than physicians for the same services, so even with inflation, owning physician practices is very lucrative for them. Unfortunately, patients shoulder the burden of this difference. That's why doctors are speaking out.

The data tells an alarming story. Between July 2012 and July 2016, the number of physician practices acquired by hospitals grew by 36,000, doubling the number of practices owned by hospitals in just four years. When hospitals buy up practices like this, prices for services at these locations go up an average of 14%.

On top of these increases, hospitals acquiring physician-owned practices can also start charging what are called "facility fees." These are extra charges that hospitals are allowed to tack on to patient charges for services rendered at what are now their facilities – even though those same facilities didn't tack on those fees when they were owned independently. These fees can add up to hundreds, even thousands of dollars, amounts that patients often aren't prepared to pay.

These price jumps don't just hurt my patients' bank accounts. They also make them less likely to get the care I advise. A patient who routinely visits a physician-owned practice for an ultrasound or MRI, when learning that these visits now cost much more due to an ownership change, may decide that she can't get that procedure because she can't afford it. I can't even count the number of times that a breast MRI was not performed because the patient's portion was unaffordable to her. These women have an increased risk of breast cancer, are advised by me to have an MRI, and they can't afford it. They have insurance but it's still thousands of dollars. All too frequently the MRI is not done.

Stories like this are why physicians are calling on our federal representatives and senators to act. We are worried about our patients. It is clear that large hospital-owned health systems are gaming the system at patients' expense. It's simply not right that hospitals charge patients more for the exact same services, just because of new practice ownership. Our patients are also voters, and this is an issue we can all embrace.

By asking our leaders in Washington, D.C., to pass site-neutral payment policies, we can ensure that patients receive the same service at the same price regardless of who owns the practice. This would save Americans billions of dollars. We must take action on this critical issue without delay. Our health depends on it.

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Nancy Binford, M.D., lives in Austin and is a fellow of the American College of Obstetricians and Gynecologists.