Consumer beware! Medical fees can double at hospital-owned practices

Written by: Dan Kuksa on Thursday, November 06, 2014

This may sound like an odd question, but do you know who owns your doctor’s medical practice? Not all medical practices are independently owned by physicians. It doesn’t sound like a big deal. But it’s a very big deal when it doubles the fees you pay for medical services.

Hospitals have been buying private medical practices as a way to control costs and coordinate health care.  So what? So a recent Stanford University study suggests that these mergers may not be in a patient’s best interest, mainly because they tend to increase prices for medical services.

Hospitals justify raising their fees based on the premise that the practice they purchased is now part of their outpatient facility overhead. In other words, a facility fee is added to the doctor’s fee. Because of the way services are billed to Medicare and private insurers, it could be far less costly for you in out-of-pocket costs if your physician is not part of a large hospital system. 

What’s more, claim costs go down with independently owned physician practices; so insurers also benefit.  This is especially critical for larger employers with self-funded plans, because they’re the ones paying the claims.

You might be uncomfortable telling your doctor you’re shopping price before a service is scheduled. Then again, hearing that your $200 EKG will now cost over $400 might be all the incentive you need to see another doctor for that service. If one car dealer is charging 170% more for the same car as another, don’t you keep shopping?

Until a directory exists that lists services by physician and price, it’s on the consumer to ask in advance what a medical service will cost. The best way is to identify the billing code and check a number of sources. You may not like shopping your doctor’s services, but with potentially dramatic cost savings at stake, it makes no sense not to. 

The conclusion is that consumers should ask in advance what the cost of a service will be, and then have the resources (access to network directories, etc.) to see what that service might cost somewhere else. - most people are not comfortable doing this- but the cost differential on some of these services is so great, that it should make sense – if someone was shopping for a new car, and one dealer charged 170% more for the same car as another dealer…..where would that consumer shop? That’s the issue.

Transparency in physician billing has come very slowly- there’s usually no directory available that lists all physicians and what they charge for different services. For now, at least, the patient needs to take the initiative and ask- find out what the billing code is for a particular service, and then shop around. For those who are willing to take this step, the savings in out of pocket costs could be significant.

Dan Kuksa

1860 W. Winchester Road , Suite 103, Libertyville, IL 60048