Your Doctor’s Hospital System Contract Could Be Costing You Money


Doctors affiliated with hospital systems are feeling increasing pressure to keep their referrals within the system to the detriment of patients’ pocketbooks, according to a report by The Wall Street Journal on Thursday.

“There was strong, strong emphasis to keep our patients internal and not let them leak out to unaffiliated physicians,” cardiologist Mrugesh B. Patel told the The Journal about his time working for Pennsylvania’s Trinity Health system.

“Big Brother was always watching because they had all these computers, so they knew who’s sending patients out of the system,” he said.

The Journal report offered warnings to patients who may want to check the prices of procedures and tests at locations outside of the hospital system affiliated with their physicians.

The pressure to refer patients to specialists or services within the system can come from hospital executives and even employment contracts.

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The internal pressure to build up hospital systems and their affiliated physician groups comes as hospitals are merging and acquiring physician practices at a growing rate.

Those referrals can cost patients big. The Journal reported:

“A study released earlier this year by researchers at Yale University and elsewhere found that patients whose doctors worked for hospital systems were 27 percent more likely to get their lower-limb MRIs at a hospital, and their scans cost $277 more on average, with about $90 of that extra amount being added to the patient’s out-of-pocket cost. The researchers suggested that the referring doctors ‘may be motivated to refer patients to specific providers for reasons other than quality or patient costs.'”

The higher costs of hospital system-provided services were not confined to MRIs.

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Other services that have huge variations between doctor’s office and hospital outpatient prices include eye tests and treatments, the cost of which can differ by up to $2,000; female reproductive procedures, the costs of which can differ by up to $1,700; and biopsies, the cost of which can differ by up to $1,500, The Journal reported.

Those differences contribute to skyrocketing hospital expenditures, which topped $1 trillion in 2016.

Meanwhile, hospital systems defend policies of encouraging referrals to affiliated service providers.

“Referral tracking within our network helps us confirm that our providers are creating and optimizing opportunities for coordinated care,” Trinity, the system for which Patel used to work, said in a statement to The Journal.

One bright spot is that federal rules keep hospitals from linking physician pay to in-system referrals, although many in the health care industry say the pressure is still real.

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The Thursday report came after a related report in September that detailed hospital systems’ secret contracts with insurers that are keeping health care costs high.

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