Hospitals Direct Patients for Profits

The Wall Street Journal (WSJ) recently published an article “Hospitals Push Doctors To Keep Referrals In-House” documenting a practice we have seen from the local hospital systems for years. Patients present to their primary care provider or other hospital-employed physician to receive medical advice or treatment. Frequently the provider suggests further diagnostic testing or referral to a specialist. What is left out of the discussion is the available options for this further testing or treatment. Patients are sent only to hospital-owned facilities or employed physicians. The patient is not voluntarily informed of their other available options.

Incentivized Patient Referrals & Barriers to Referrals Outside Networks

These referral patterns are associated with the hospital’s acquisition of the physician practice or facility. The once – independent, now employed-physician is incentivized to keep all referrals within the hospital system or minimize “leakage”or patients getting medical care at a facility outside of their system. Hospital-employed physicians have reported barriers to referring their patients outside their respective hospitals including oversight from hospital administration, time-consuming computer order entry and performance-based incentives to maximize patient “keapage” or patients staying within the system.

Higher Medical Costs | Lower Quality Care

The result is higher cost, lower quality care.* Based on 2016 data, the difference in cost for a “nerve injection” can vary from approximately $500 to $2000 depending upon where the procedure is performed such as a private physician’s office versus hospital-owned outpatient facility.* These costs are directly passed onto the patient in the form of higher co-pays and deductible expenses. With insurance deductibles increasing, these costs have an even greater negative impact on the patient’s bottom line without any demonstrated clinical benefit.

The common responses from hospital administrators defending these referral practices are better care coordination and avoidance of duplicative or unnecessary procedures. Yet, electronic medical records should allow greater care coordination amongst medical providers regardless of hospital affiliation.

Get the Best Medical Care You Deserve

In the end, maximizing market share and revenue generation are influencing medical referral patterns to the detriment of what is in the patient’s best interest, that is, high-quality, low cost medical care.

What can you do to get the best care you deserve? – Ask your provider for more than one referral option including a facility or provider not owned or employed by the hospital system.