A doctor with nearly 40 years of experience has sounded the alarm after falling victim to a healthcare trend that is causing a ten-fold rise in some people's medical bills.
Danielle Ofri, a primary care doctor at Bellevue Hospital in New York took her daughter to what she thought was an urgent care center in Chicago, hoping to get a quick X-ray after a bicycle accident.
Weeks later she received a bill for $1,168 and discovered that the clinic was owned by a hospital that tagged on hundreds of dollars for 'facility fees'.
'It turns out that I'd stumbled into a lucrative corner of the health care market called hospital outpatient departments, or HOPDs,' she told the NY Times.
'Since these facilities don't necessarily look like hospitals, patients can be easily deceived and end up with hefty financial surprises.
'I'm a doctor who works in a hospital every day, and I was fooled.'
Dr Danielle Ofri was horrified when she was charged$1,168 for a couple of $100 X-rays before discovering that the 'urgent care center' was in fact ahospital outpatient department
The proportion of hospital-owned doctors' offices has jumped from29% to 41% in ten years
The hospital-owned clinics carry out the same routine procedures as independents but are allowed to charge higher prices.
The average charge for a colonoscopy is $1,383 at a HOPD, compared $625 at a doctor's office according to a study by the National Institute for Health Care Reform.
A knee MRI cost 50% more, chemotherapy twice as much, echocardiograms three times as much, and prostate biopsies more than six times as much.
'Because they are considered part of a hospital, they get to charge hospital-level prices for these outpatient procedures, even though the patients aren't as sick as inpatients,' Dr Ofri wrote.
The cash cow has been eagerly leapt on by hospital groups which have mounted an aggressive buying campaign against formerly independent clinics.
The proportion of doctor's clinics affiliated with hospitals jumped from 29% to 41% in the ten years to 2022.
In Maine and Ohio, four out of five medical bills for heart screenings that are now sent to each state's largest insurer has a facility fee tacked on, and a report in March found that many hospital systems are now earning at least half of their revenue from patients who have not been admitted.
Dr Ofri cited the case of one elderly patient in Ohio whose bill went up 10-fold for the same treatment by the same doctor after a hospital was allowed to charge for it.
'It's one of the most egregious examples of hospital financing at the expense of consumers,' said Liz Hagan of the United States of Care advocacy group which has investigated the trend.
HOPDs add hefty facility fees that charge an individual for use of the room in which they meet with their medical practitioner, to offset the cost of running a hospital
Some states have taken matters into their own hands. In Indiana, clinics located off hospital campuses affiliated with the largest nonprofit health systems, cannot charge fees
'Hospitals are at the center of a massive market failure.
'Ultimately, consumers are left paying the price for that – either through higher premiums, because hospital costs are built into premium costs, or at the point of service.'
Attempts to tackle the iniquity have foundered in Congress in the face of fierce lobbying from the health industry which argues that the fees are the only thing protecting hospitals from 'substantial and unprecedented cuts'.
Dr Ofri has nearly 40 years experience as a practitioner, and warned that if she can be caught out, so can anyone
'The cost of care delivered in hospitals and health systems – and any associated sites of care operated by the hospital – takes into account the many unique services that only they provide to their communities,' the American Hospital Association told the Guardian.
'This includes the costs of maintaining standby capacity for traumatic events and delivering 24/7 care to all who come through the emergency department, regardless of ability to pay or insurance status.'
Some states have acted on their own initiative including Indiana which has rules that clinics located off hospital campuses affiliated with the largest nonprofit health systems, cannot charge fees.
Hospitals in Colorado will join those in 15 other states in having to disclose their fees upfront to potential patients from next month.
'It's time for Congress to protect patients from both unfair pricing schemes and health care deception,' Dr Ofri said.
'I was so livid about being charged hospital rates for two simple X-rays that I filed a formal complaint with the Illinois attorney general's office, which concluded that the billing was legal under federal law.
When I asked for on-the-record comments about my contention that the charges seemed excessive and that the system felt deceptive, a representative for NorthShore University HealthSystem (now Endeavor Health) offered only a general statement.
Liz Hagan of non-profit advocacy groupthe United States of Care said hospitals 'are at the center of a massive market failure'
'That read, in part: 'We understand that navigating the health care landscape, including billing, can be complex'.
'After six months of fighting the cost, the hospital quietly canceled our bill.
'I'm sure it calculated that this was the simplest way to get rid of a pesky patient — but that wasn't what I was after.
'I wanted to untangle this loophole that catches patients unaware and saddles them with exorbitant bills.'
