Nearly 25 percent of all specialty physicians who see patients at hospitals are hospital-employed, according to the report — a fivefold increase from the 5 percent of specialists who were hospital-employed in 2000. The number of employed primary care physicians has doubled to roughly 40 percent in the same time span.
Physicians employed by hospitals — a scenario on a considerable upswing — are likely to see more generous reimbursement. Compared with independent physicians, hospitals can negotiate higher reimbursement rates with commercial payors due to stronger market power, and Medicare pays "substantially more" for certain procedures if performed at a hospital, according to the report.
A 15-minute visit to a physician may cost Medicare about $70 at an independent practice whereas it runs closer to $124 if billed as a hospital-outpatient service. The report also cites prices from WellPoint for spine MRIs in Nevada. The procedure would cost $319 to $742 at a freestanding clinic, but $1,591 to $2,226 at a hospital.
Some hospitals say higher reimbursement is necessary because it costs more to operate outpatient clinics, many of which care for the uninsured and have to meet regulatory requirements.
Juan Davila, senior vice president for network management at Blue Shield of California, said "there is a tangible, or sometimes really, really high increase in what we pay doctors" once a group links up with a hospital system, according to the report.
Richard Umbdenstock, CEO of the American Hospital Association, said, "You put a hospital name on something, and the expectations change immediately," according to the report.
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