A recent article in the Wall Street Journal details the consequence of hospitals hiring more doctors, especially primary care.:
The Hidden System That Explains How Your Doctor Makes Referrals
Key points:
- “Hospitals are getting more aggressive in directing how physicians refer for things such as surgeries, specialty care and magnetic resonance imaging scans, or MRIs.” This often results in more out-of-pocket expenses for patients.
- “Insurers have been working to steer patients toward doctors’ offices and other non-hospital locations for many types of care, because they are generally less expensive. The same service often costs twice as much or more when delivered in a hospital setting, compared with a doctor’s office.”
Thanks to Bryan Vartabedian’s 33mail for this reference. He notes: “The doctors in the private space relished the article as evidence of the dangers of the physician employee. But we have to remember that when doctors own their own businesses, the pressure to do things for money is huge.”
Near Zabriskie Point at Sunrise, Death Valley
It should also be noted that the larger, hospital-based physician practices have greater negotiating power with the insurance companies, and thus the insurance companies are motivated by costs to have patients cared for in smaller practice settings, where the solo practitioner or small group has less ability to negotiate fair and equitable reimbursement rates compared to larger groups encompassing hundreds or thousands of physicians. This is just one reason why so many young physicians forego the possibility of private or small group practices.