Overcharging is the dark side of health-care consolidation

Like many physicians, I entered medicine to heal and to alleviate pain and suffering. However, what I am witnessing today is that more and more people are struggling to pay for the medical care they receive — with many experiencing financial ruin on account of exorbitant health care costs which have soared. A troubling new trend in health care consolidation is making this issue even worse.

As medical costs continue to skyrocket we are seeing more and more people neglecting their care because they cannot afford to see a doctor, get a test or even undergo cancer therapy. In the past few years, private equity firms and large well-funded health care corporations have increased their stake in the health care sector by acquiring independent physician practices, nursing homes, renal dialysis providers, physician gastroenterology groups, etc., then continuing to deliver medical services — but charging higher fees.

For example, a patient who needs a Level 3 diagnostic or screening ultrasound examination, who would have paid on average $250 for that service, is now paying $650 for the same procedure, performed by the same certified and qualified ultrasound technician, ordered by the same doctor. But now that doctor is operating “under new management,” so the procedure is billed using a code described as a “hospital outpatient department” rather than the doctor’s office. The cost of a colonoscopy or esophago-duodenoscopy (EGD) rises from $527 to $2,679.

In one notorious case, a patient paid 10 times more for a critical intervention she was required to receive on a monthly basis simply because her doctor moved to another floor in the same building. The hospital that acquired the doctor’s practice simply reclassified the new space as a “hospital-based setting.”

Doctors are deeply concerned about this trend toward health care acquisitions, mergers and consolidations by private equity and other large hospital corporations. They drive up out-of-pocket costs and raise premium prices for everyone.

Hospital overcharging not only burdens patients but also has wider economic implications. Skyrocketing costs strain insurance payers, governmental programs and employers, leading to increased premiums, reduced coverage, and even challenges in sustaining health care benefits altogether. These financial burdens hurt patients and our whole economy.

Thankfully, there are solutions to this growing problem. Congress can protect the public by cracking down on unfair and unjustifiable disparities in pricing in health care by passing bipartisan legislation to ensure patients pay “the same price for the same service.”

Doctors and nonprofit organizations are calling on Congress to enact legislation creating a “universal site-neutral payment system” for health care institutions. Under such a system all health care providers will receive the same payment for the same procedure, leading to lower health care premiums and cost-sharing requirements for payor and patients.

By reducing these costs, Congress can help encourage more individuals to seek necessary health care services and alleviate financial barriers that often prevent timely care. It’s time for our leaders in Congress to act.

Dr. Ernesto A. Pretto Jr. is a professor of clinical anesthesiology in Coral Gables.