Big hospitals buying small doctor's office causing higher costs
According to a recent report, rising costs for basic medical procedures is the result of increased acquisition of small physician practices by large hospital corporations. Hospital conglomerates and private equity groups are buying-up independent practices and billing them as a Hospital Outpatient Department (HOPD), which allows them to charge patients the higher hospital facility fees in a non-hospital setting.
From 2017 to 2022, the study examined services commonly provided in outpatient settings – such as a mammogram, colonoscopy, cataract surgery, ear tympanostomy, and other basic clinic visits. For example, the report found that:
Mammogram – In 2022, mammography HOPD costs were 32% higher than those rendered in an office setting. A typical commercial payment rate for a mammogram performed in a regular physician’s office is $232. If performed at an HOPD, that price jumps to nearly $360 with additional hospital facility and physician fees tacked on.
Colonoscopy – In 2022, costs for a colonoscopy in an HOPD were 58% higher than those in an office setting.
Cataract surgery – In 2022, cataract surgery costs in an HOPD setting were 56% higher than in an office setting.
Ear tympanostomy – In 2022, ear tympanostomy, surgery to replace ear tubes, costs in an HOPD were 52% higher than in an office setting.
Clinic visits (evaluation and management services) – In 2022, clinic visits in an HOPD cost an average of $161 or 31% more than those that occurred in an office setting.
Findings suggest that site-neutral payments – or billing the same amount for the same service regardless of site of care – would create significant savings for employers, employees and patients. Congress is currently considering site-neutral payment legislation including the Facilitating Accountability in Reimbursements Act in the U.S. House and the Site-based Invoicing and Transparency Enhancement Act in the U.S. Senate.
Healthcare costs and consolidation have exacerbated provider shortages, with Nevada being particularly impacted. Nevada’s Congressional Delegation has returned from a summer recess and has committed to addressing accessibility and affordability to medical care.