In the News: Hospital-Owned Physician Practices; Clinically Relevant Research Findings

August 29, 2012 | Strategic Insights for Health System


As hospitals are acquiring physician practices to increase efficiency, some patients are experiencing an increase in costs, reports an August 27, 2012, Wall Street Journal article. According to the article, the structural shift is being driven partly by declining reimbursements for physicians, but hospitals say they are bringing in physicians to improve care, integrate services, and reduce waste—efforts encouraged by the Patient Protection and Affordable Care Act. The Medicare Payment Advisory Commission explains that Medicare pays substantially more for certain services if they are performed at hospital facilities. For example, a 15-minute doctor visit cost the program about $70 last year at a free-standing practice, but the same visit cost about $124 if it was billed as hospital-outpatient. Also, health insurers typically reimburse more for imaging scans, lab tests, and outpatient surgeries when they are billed as hospital work.

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