Surprise facility fee

NPR published a look at one patient's surprise at being billed a facility fee that cost about ten times as much as the actual treatment. Hospitals have argued that they should be able to charge more for the same procedure performed in their facilities rather than in a clinic because they have to provide the ability to handle complications, even if those complications do not arise. On some level, the argument makes sense for some potentially risky procedures. For routine procedures (and I suspect that the steroid injection listed in the story would count as one), this argument seems to fall flat. In particular, hospitals get paid a fee for providing emergency services, and if those prices do not cover operations, perhaps those fees should be adjusted. Regardless, from a societal perspective -- and especially from the perspective of an individual patient -- it does not make sense that a simple, routine, and relatively safe procedure should cost the patient ten times as much as it did when not much else has meaningfully changed.

The current model gives hospitals a strong incentive to acquire physician practices and tack on a facility fee in order to boost revenue. Those acquisitions make independent doctor practices less and less common, driving up the overall price of health care. Fortunately, the Centers for Medicare & Medicaid Services has tried to stop this practice, but the story points out that the American Hospital Association has sued to have this practice continue.