Costs Rise as Hospitals Acquire Medical Practices

By Lynne Ide

FACILITY FEEYesterday’s Bipartisan Round Table on Hospitals and Health Care at the Connecticut General Assembly delved into a variety of issues, including the impact hospitals have on the municipalities in which they are located, and how individual patients are affected by consolidation in the health care delivery system.  You can check out the details of the November 20 informational hearing once it is posted at the Bipartisan Round Table on Hospitals and Healthcare page.

The foundation is particularly concerned about how changes in the system affect the cost and quality of, as well as access to, care.   In her testimony, the state’s Healthcare Advocate, Victoria Veltri, spoke about how the acquisition of medical practices by hospitals has driven up costs for patients.  The major culprit for the cost increase has been the so-called “facility fee.”  This is an extra fee that is tacked onto a medical bill because the medical practice is now part of a hospital network, such as Yale New Haven Health System or Hartford HealthCare.

These new facility fees are too often a complete surprise to patients, causing confusion and compounding hefty out-of-pocket costs for some. Veltri argues that health care consumers have no bargaining power in this situation – especially since they do not find out about these fees until after they receive care.  The lack of transparency about costs of care offers no opportunity for people to shop around for the best quality care at a price they can afford.

In addition, Veltri raised concerns that the way in which health care systems set facility fees is not open to public scrutiny.  As a result, there is no information about how the facility fee is related to the actual cost and quality of the care provided to the patient.

Legislation passed in 2014 that requires hospitals to report medical practice acquisitions to the Attorney General (see Public Act 14-168).  The State Comptroller, Kevin Lembo, is also studying the impact of facility fees and overall costs associated with consolidation of large hospital groups.

The foundation hopes that the combined efforts of the Attorney General, the State Comptroller and the state legislature will result in action in 2015.   It is critical to put an end to these back door ways of getting more money out of patients’ pockets—especially since patients have no power to hold providers accountable for up-front transparency and quality of care.

Until then, Veltri is right – consumers are caught in the lurch. ​

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One Response to Costs Rise as Hospitals Acquire Medical Practices

  1. Pingback: Consumer health care cost protections fall short  | Universal Health Care Foundation of Connecticut

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