Hospital ownership inflates patient costs, at least for now

Although hospitals' physician practice buying spree has been wrought with its share of challenges, the trend is far from slowing down, CNBC reported.

"Doctors are asking us, 'Come run my practice, because we can't do it anymore,' " said Alan Miller, CEO of hospital chain operator Universal Health Services. "And now we've been investing in doctor's practices. We didn't do much of that before. This is not a great moneymaking business, but it could be."

For physicians who sell their practices, the tradeoffs seem to be mostly in the realm of sacrificing autonomy for decreased business hassles. According to a recent survey from Physicians' Practice, however, hospital-employed physicians (16 percent) were more than twice as likely as independent doctors (7 percent) to cite "inadequate compensation" as a top practice frustration, indicating that the switch might not be as lucrative as some doctors might hope.

But the group who might be feeling the pinch most of all is patients, many of whom have expressed shock to learn that the same services they used to get at their doctor's office now cost more now that their physicians are employed by a hospital.

According to a June report from PwC's Health Research Institute, "studies suggest that consolidation in concentrated markets can drive prices up as much as 20 percent," CNBC reported.

In the long-term, this tide could change, according to Ceci Connolly, managing director of PwC Health Research Institute. "We do expect there to be some efficiencies that come out of consolidation," she said, which could ultimately result in lower costs to patients.

"It's less clear how long it will take to deliver those efficiencies," Connolly told CNBC. "It certainly doesn't happen overnight."

To learn more:
- read the article from CNBC
- here's the story from Physicians Practice

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