By Deb Nalty / For The Herald
As a family physician, I’ve seen firsthand how rising health care costs hurt my patients.
It’s not uncommon for them to delay or skip essential care because they can’t afford it. Even patients with Medicare or private insurance are feeling the pinch. A major, yet largely invisible, driver of these costs is the increasing trend of big hospital systems buying up independent physician practices and charging patients more for the same services.
Here’s how it works: After acquiring an independent practice, hospitals reclassify it as a “hospital outpatient department.” With that simple change, they can charge significantly higher prices for the same services, even when nothing about the care has changed. For instance, Medicare is charged 51 percent more for initial preventive exams in hospital outpatient department settings than freestanding physician offices. Drug administration services cost Medicare and patients who rely on it 129 to 211 percent more in hospital-owned settings than independent offices. These charges add up quickly for patients, many of whom are already struggling to make ends meet.
This isn’t about better care; it’s about profit. Hospitals are exploiting a payment loophole to increase revenue, burdening patients with higher bills. Medicare often pays more for the same health care services performed in hospital outpatient departments than in independent practices. This system incentivizes consolidation, pushing care away from cost-effective settings like physician offices into more expensive hospital-owned facilities.
This problem affects all of us. Higher costs for routine services drive up insurance premiums for everyone and inflate Medicare spending, which taxpayers ultimately fund. Site-neutral payment reforms — policies ensuring equal payments for the same services regardless of where they’re delivered — could save Medicare $153 billion over 10 years. These savings would also reduce out-of-pocket costs for beneficiaries.
Ensuring my patients can afford care is crucial to their health. When a routine scan or treatment goes up in cost, patients are more likely to skip or delay that care. These delays can allow treatable or manageable conditions to worsen, becoming more painful, costly and difficult to treat.
This problem is only worsening as hospitals continue to merge and buy up independent practices. The majority of physicians are now currently employed by hospitals and health systems. This means less competition, and higher costs.
Thankfully, Congress has an opportunity to address this issue through bipartisan site-neutral payment reform. By ensuring that Medicare and private insurers pay the same price for the same service regardless of where it’s delivered, we can eliminate the financial incentive for hospitals to acquire independent practices and raise costs.
Ensuring patients pay the same price for the same service, no matter where they receive it, is a common-sense solution that will save billions of dollars, improve access to care and protect patients from unnecessary financial burdens. Congress must seize this moment to stand up for patients and taxpayers. The health of our communities depends on it.
Let’s put an end to these unjust practices and create a health care system that works for everyone; not just hospital executives. Patients across Washington, and across the country, are counting on it.
Dr. Deb Nalty is a family physician practicing in Monroe.
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