When hospitals buy doctor’s offices, prices go up

A medical worker walks by the entrance to Elmhurst Hospital Center on May 11, 2023 in the Queens borough of New York. (Photo: Spencer Platt/Getty Images)

A up-to-date study finds that as more hospitals gobble up private practices, the costs of deliveries and other services have risen.

From the beginning of its existence in the USA, the percentage of doctors working in hospitals almost doubledaccording to test published by the National Bureau of Economic Research, a non-profit research organization.

The study authors found that as fewer doctors work in medical offices, patients or their insurers end up paying more.

For example: Two years after a hospital purchases an obstetrics office, labor and delivery prices augment by an average of $475 and Physician prices augment by $502according to the study. Scientists focused during childbirth, which is the most common cause of hospitalization among people with private insurance.

This rapid takeover by hospitals is reshaping an American industry once dominated by tens of thousands of compact physician-run practices.

According to the latest data, only about 42% of doctors in the US work in private medical offices survey data from the American Medical Association. Nearly 47% work in hospitals, a pointed augment over the past few years. Most emergency room doctors are like this now employed by hospital systems or by privately owned employee groups.

The up-to-date study provides further evidence that hospitals taking over private practices “may result in anticompetitive price increases,” Matthew Grennan, one of the study’s authors and an associate professor of economics at Emory University, said in a press release.

“As a result, I think economists and others in the antitrust community will likely consider these potential sources of harm more carefully,” he said.

Medical debt is there main cause of bankruptcy in the United States, with approximately 14 million Americans in debt medical debt exceeding $1,000– according to the non-profit KFF study.

Grennan and his colleagues found that post-merger price increases result from reduced competition. However, federal and state regulators have made little effort to stop hospital mergers that could lead to higher prices for consumers.

You covered your co-payment; now get ready for the “facility fee”

However, in recent years, states have taken some steps to lower medical costs.

Bipartisan groups of lawmakers in a dozen states addressed so-called ‘facility fees’, which are fees charged by some hospitals for patient visits to hospital-owned doctor’s offices.

This year in Oklahoma, Republican lawmakers passed a bill Bill requiring hospitals to make the costs of many services more lucid for patients to be aware of these costs. Suppliers may be subject to penalties for non-compliance. Just please sir authored by Democrats and passed last year, it requires debt collectors to submit evidence of a hospital’s compliance with price transparency rules before applying to collect medical debts from patients.

Some states have confined the rates that hospitals or doctors can charge. Colorado sets rates for providers and hospitals based on a specific formula if insurance plans are unable to reduce premiums to a specified level, while Montana AND Oregon a confined amount that hospitals and other health care providers can charge for their state employee health plan.

Stateline reporter Anna Claire Vollers can be reached at avollers@stateline.org.

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