The federal Medicare program, which covers 47 million people and is under pressure to cut costs, is taking a look at the practice. An independent agency that advises Congress concluded last year that the charging of facility fees at hospital-owned medical practices is costing Medicare millions of dollars a year. For a 15-minute office visit, for example, the federal health insurance program paid $44 more at a hospital-owned office in 2011 than at an independent office. Medicare patients pay more too: Their share of the bill for this standard visit was $11 more when they went to a hospital-owned office.
The facility fee can cause an even larger difference for some procedures, the Medicare Payment Advisory Commission found. Laser eye surgery, for instance, costs Medicare 90 percent more — $738 — in a hospital-owned facility than in an independent doctor's office.
I am posting this as an example of why hospitals purchasing or hiring Physician practices is very bad. i am certain people here will claim this is some kind of "failure of capitalism" bs, but i ask you to consider the opposite.... this is another failure of government regulation and laws. its easy to say that the facility fee should just be made illegal, but the problem is that medicare (CMS) WILLINGLY pays more to a hospital based doctor than a non-hospital based doctor... yes, you read that correctly. this is pushing physicians and hospitals to both want to work together and its costing everyone more money (with no real benefit to the patient or system). Whats worse is that the upcoming ACO's are accellerating these relationships. this is the opposite of free market capitalism as there is no incentive for the physician to compete against the hospital or other docs (with a lower cost alternative), in fact its the exact opposite.. manipulated market forces are pushing the 2 to merge as it is more profitable for both to do so. ultimately these systems get so large that there is no real local competition.
why are we supporting these large hospital run ACO's with extra payments with no real benefits?