Friday, May 25, 2018
Health

As hospitals buy physician practices, costs rise, Medicare report finds

As they buy up physician practices, hospitals promise to streamline patient care and cut costs. But just the opposite is happening, warns a federal Medicare advisory panel.

The same services cost the government's Medicare program much more when performed on an outpatient basis at a hospital, rather than at a doctor's office.

A common type of echocardiogram can be done in a doctor's office for $188. But for the same procedure in a hospital setting, the total payment is $453, reported the Medicare Payment Advisory Commission.

A 15-minute evaluation visit nets $72.50 in a doctor's office — $58 paid by Medicare and a $14.50 patient co-pay. But as a hospital outpatient evaluation, that same visit is worth 70 percent more, or a total of $123.38.

Perhaps not surprisingly, the panel reported a 9 percent increase in the number of these evaluations performed through hospital visits between 2010 and 2011. And the rise in outpatient echocardiograms was even greater.

Leveling the playing field could save Medicare and patients $1.8 billion per year, according to the commission, a panel of independent experts that advises Congress on the government-run health care program for seniors and the disabled. Such differences "urgently need to be addressed," the group said.

In the Tampa Bay market and nationally, people with private insurance often end up paying more, too, for hospital-based care. Private insurers say they see examples of costs rising when hospitals buy out independent physicians or large doctors' groups consolidate.

"The theory was that if we all work together, and we put you under one roof, we will be able to do this more efficiently and pass the savings on to the consumer," said Travis Singleton, senior vice president at Merritt Hawkins, the nation's largest physician recruitment and consulting firm. "Unfortunately, we really haven't seen that."

Instead, the latest national survey by Merritt Hawkins found that primary care physicians, for the first time, are generating more revenue on average for hospitals than specialists are.

How much is the typical primary care doctor worth to a hospital? Considering lab orders, imaging tests and patient admissions, the average revenue generated last year by each doctor was a stunning $1.6 million.

Not only are tests and procedures more expensive, the report found, they are concentrated at the hospitals now paying the doctors. It's work that once was spread out among less expensive community centers.

"There is a massive financial incentive for hospitals to 'own' these physicians," Singleton said. "There always has been, but that's been a topic you're not supposed to talk about. You're supposed to talk about quality."

Quality has been the buzzword locally as BayCare Health System, the area's largest provider, has continued to grow. The not-for-profit system, dominating more than one-third of the Tampa Bay market, operates 10 hospitals, including the Morton Plant Mease facilities, St. Joseph's and St. Anthony's.

Two years ago, BayCare purchased Suncoast Medical Clinic, the largest multi-speciality doctors' group in south Pinellas County, building the group a $22 million home on the St. Anthony's Hospital campus in St. Petersburg.

Across the region, BayCare now employs about 350 doctors. It touts formal affiliations with an additional 800 who remain independently employed but have signed on to work with BayCare on creating new models of care.

It will take years to turn this growth into cost savings, acknowledged Glenn Waters, president of Morton Plant Mease Health Care. He is working on these issues across BayCare's properties.

In the meantime, he said, BayCare isn't taking advantage of the higher fee schedules available to hospitals. When it acquires a practice such as Suncoast Medical, it keeps in place the lower physician fees.

"We didn't think it was appropriate to take that same practice and, just because there was a change in ownership, have patients pay more out of their pockets," Waters said.

Last fall, however, BayCare was at the center of a rare public airing of health care costs when insurer UnitedHealthcare accused it of demanding excessive price hikes. Only after a highly public fight — and a nearly two-month contract break — did the two settle their differences.

Now, as the government is being urged to consider equalizing Medicare pay scales, private insurers also are trying to address the issue. Florida Blue, the state's largest insurer, uses contractual provisions to shield its 4.3 million health care members from the price hikes that can result from a change in ownership.

But it's not an easy fight.

"We get a lot of push-back," said Andy Marino, Florida Blue's vice president of network management. Popular care providers "have leverage. They have market power — and in the past, they have shown that they are willing to use it."

Prices tend to go up not only when hospitals buy physician practices, but also when competing doctors team up to form large practices, such as in cancer care, anesthesiology and emergency medicine.

Locally, Marino noted, the dominant obstetrics-gynecology practice, Women's Care Florida, commands prices for routine services that can be more than 10 percent higher than with independent providers. Leaders of that practice weren't available for comment.

Florida Blue sees some advantages to consolidation. Late last year, it purchased the Diagnostic Clinic, one of the largest physician practices in Pinellas. And the insurer points to BayCare as an example of a leader in creating financial incentives for practitioners to save money. That's the right approach, Marino said.

But he cautioned consumers not to be misled by the rosy promises of greater efficiencies heralded each time a hospital acquisition is announced.

There may be savings, but they generally aren't passed down to the consumer.

"I guess the hospitals are doing better," he said.

Letitia Stein can be reached at [email protected] or (727) 893-8330.

Comments
Estimated 7,000 bodies may be buried at former asylum

Estimated 7,000 bodies may be buried at former asylum

STARKVILLE, Miss. — Some of the boxes stacked inside anthropologist Molly Zuckerman’s laboratory contain full bones — a skull, a jaw, or a leg. Others contain only plastic bags of bone fragments that Zuckerman describes as "grit." These humble remain...
Published: 05/23/18
FDA warns teething medicines are unsafe for babies

FDA warns teething medicines are unsafe for babies

WASHINGTON — Federal health officials warned parents Wednesday about the dangers of teething remedies that contain a popular numbing ingredient and asked manufacturers to stop selling their products intended for babies and toddlers. The Food and Drug...
Published: 05/23/18
A chronic lack of sleep could lead to decreased brain function, study finds

A chronic lack of sleep could lead to decreased brain function, study finds

A sleep study revealed that less than six hours of sleep a day can limit the brain’s ability to function properly.The study, published on Monday in the journal Proceedings of the National Academy of Sciences, found that people experiencing less than...
Published: 05/23/18
Many cancer patients juggle care along with financial pain

Many cancer patients juggle care along with financial pain

Josephine Rizo survived chemotherapy, surgery and radiation, but breast cancer treatment wrecked her finances.Money was already tight when doctors told the Phoenix resident she had an aggressive form of the disease. Then she took a pay cut after goin...
Published: 05/22/18

Hernando County officials gather to remedy ‘dearth of services’ for youth with mental illness

BROOKSVILLE — Educators, court officials, law enforcement officers and health care professionals met Friday to identify the best ways to keep local youth with mental illnesses out of the court system and provide treatment for those already in the sys...
Published: 05/22/18
Give your arms a workout, too

Give your arms a workout, too

In addition to appearance, it is very important to maintain strength in those arms, as they are needed for practically every upper body movement we perform. We often take our 23 arm muscles for granted, until we reach a point where it suddenly become...
Published: 05/22/18
Intermittent fasting seems to be a good thing, new report suggests

Intermittent fasting seems to be a good thing, new report suggests

Going long hours without eating isn’t good for us, we are often told. Our bodies need fuel regularly. Otherwise, we may become lethargic, tired and hungry. Our thinking can become mushy, our ability to work, and even play, hampered.Not so fast.A new ...
Published: 05/22/18
U.S. approves first drug developed to prevent chronic migraines

U.S. approves first drug developed to prevent chronic migraines

TRENTON, N.J. — U.S. regulators Thursday approved the first drug designed to prevent chronic migraines. The Food and Drug Administration’s action clears the monthly shot Aimovig (AIM’-oh-vig) for sale. It’s the first in a new class of long-acting dru...
Published: 05/18/18
Know your blood pressure numbers? Today (May 17) is World Hypertension Day

Know your blood pressure numbers? Today (May 17) is World Hypertension Day

Today (May 17) is World Hypertension Day, and the American Medical Association is encouraging people to monitor their blood pressure levels and get high blood pressure, or hypertension, under control. High blood pressure, sometimes referred to as the...
Published: 05/17/18
Study: Depression in men may lower chances for pregnancy

Study: Depression in men may lower chances for pregnancy

Women having trouble getting pregnant sometimes try yoga, meditation or mindfulness, and some research suggests that psychological stress may affect infertility. But what about men: Does their mental state affect a couple’s ability to conceive?The la...
Published: 05/17/18