Data show that current healthcare payment structures contribute greatly to a trend that lawmakers are examining closely: healthcare marketplace consolidations.
The Alliance warns that higher reimbursement encourages hospitals to buy up physician practices in order to increase their profits. Unfair payment policies have put independent physician practices nationwide in a position in which selling to hospitals is their only option.
A Milliman study on the cost drivers of cancer care found the portion of chemotherapy infusions delivered in hospital outpatient departments increased from 15.8 percent in 2004 to 45.9 percent 2014 in the Medicare population. This means that more Americans are receiving cancer care from oncologists whose practices have been bought by hospitals. The cost of providing cancer care in a hospital outpatient department is significantly higher than the exact same care delivered at a community cancer clinic: charging approximately 126 percent higher costs for administering common cancer drugs and 100 percent higher costs for drug infusion services overall.
According to the Government Accountability Office (GAO), the number of vertically consolidated hospitals and physicians increased from 2007 through 2013. Specifically, the number of vertically consolidated hospitals increased from about 1,400 to 1,700, while the number of vertically consolidated physicians nearly doubled from about 96,000 to 182,000.