In America, when you are discharged from a hospital, you may be referred to a specialist doctor at a private practice owned by the hospital. Researchers claim this monopoly behavior increases costs for consumers, without an attendant increase in quality.
Under the guise of wellness, hospitals increasingly rely on in-house referrals to support their bottom line. Choice is likely an option for many patients, but the social worker delivering discharge documentation is unlikely to provide a list of nearby, unaffiliated practitioners. The hospital wants to keep their hand in your wallet.
Hospitals in America may now own some 50% of all private practices nationwide. The figure has grown precipitously over the past two decades with a notable uptake in cardiology and OB-GYN specialties. In effect, a massive restructuring of the healthcare industry has been taking place without regulatory scrutiny. The business-acquisition costs either fall below regulatory hurdles or there is insufficient manpower to review these smallish transactions. The numbers vary greatly, but an acquisition might run as low as $1-to-$3 million, depending on an earnings multiple.
For hospitals, the risk is regulatory backlash. But that may be a distant proposition in a notoriously opaque industry. Here in Florida, the largest network is nonprofit AdventHealth with 30 in-state hospitals. The organization expects to see its operating revenue grow from $21 billion in 2025 to $32 billion by 2030 in part through “operating alignment” with healthcare providers. Incidentally, AdventHealth appears to employ four full-time government lobbyists, according to OpenSecrets.
Hospitals and private practices operate on a two-lane highway. As suggested here, hospitals may find certain private practices to be alluring because hospitals have a captive referral point for discharged patients. Other private practices may be attractive because of their ability to route patients to the hospital, effectively acting as a sales funnel. ■
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