Over the past several years, all over the country, hospitals have been merging in an attempt to reduce costs and increase revenue. Today, more than half of the 5,700 hospitals in the US belong to larger “health systems,” also known as “integrated delivery networks (IDNs).”
Health systems aim to reduce administrative overhead by sharing services and leveraging scale to buy supplies at better prices. They intend to improve care and reduce prices through standardization of care and better coordination of care through shared electronic medical records.
Health systems are also buying up doctors’ practices. By the end of 2016, only 33% of physicians were independent. By buying doctor practices, hospitals bill your insurance for doctor visits and gain referrals within their system. Health systems also own a portion (27%) of free-standing outpatient facilities such as imaging centers, and charge higher prices for the same results.
Benefits of integrated health systems include improved communication among providers and better-coordinated care. However, left unchecked, a typical consequence of mergers is that they can raise prices. This hits consumers with higher premiums, higher cost-sharing, and slower wage growth.
Be an educated consumer
Consumers can play a role in combating the high cost of health care, which has intensified in part due to extensive hospital mergers. Arming consumers with information would give them more power. Consumers should be aware of cost and quality differences so they can make more informed decisions about their own care.
While doctors typically have their patients’ best interests in mind, patients should still ask why they should go to a particular hospital or specialist. A knowledgeable, inquisitive consumer would choose the best option by comparing price and performance, promoting competition among health care providers. It would help drive prices down and quality up.
Before you seek care, try to see the total picture. Ask the doctor’s office the price for the service you are about to receive – not just your out-of-pocket expenses, but the total cost. Health care prices can be out of control, and consumers should demand more transparency. Becoming aware of the prices for health services can help keep the costs low for everyone who needs care.