Puget Sound Business Journal: Congressman McDermott asks: Are bigger hospitals better for patients?

By Valerie Bauman, Puget Sound Business Journal, August 19, 2013

U.S. Rep. Jim McDermott, D-Seattle, is concerned about what hospital consolidations could mean for health care costs, and he’s asking the investigative arm of Congress to research the issue

“We already had the experience of banks that are too big to fail, so I’m looking at this and looking at hospitals that are getting bigger and bigger and bigger,” said McDermott, who is also a physician. “Are these services for patients getting better and better?”

He’s asked the U.S. Government Accountability Office (GAO) to step in to study the issue.
While the issue isn’t raising antitrust flags at this stage, that’s something that McDermott wants to avoid by acting now.

“If one hospital (eventually) has 90 percent of the beds in the area, they set the rate,” he said. “And this whole idea that we have a free enterprise system goes out the window. At that point antitrust questions may be raised.”

Specifically, McDermott wants GAO officials to use Medicare and other data to identify recent trends in hospital consolidation. In addition to hospital mergers, he wants a better understanding of how the acquisition of physician practices, ambulatory surgery centers, clinical labs and other health businesses affects the cost to patients.

At this point, patients have little transparency about the cost of health care. The first step is gathering data, and then Congress can consider what, if any, action is required, McDermott said.

One specific concern McDermott raised was the emergence of facility fees, which have become more common as hospitals acquire more physician practices and other care provider networks. Essentially patients are billed for the doctor’s service, but also receive a “facility fee” that goes back to the hospital.
“I want to know exactly what the American public is getting out of this,” McDermott explained.

Seeking help from the GAO is just the first step in taking on this issue, he said.

When asked about the trend of Catholic hospital mergers in Washington state, McDermott said he’s been more concerned about cost control issues.

“Patients are being blindsided all over the place,” he said.

Catholic affiliations have been under scrutiny because they don’t provide abortions or assisted suicide, and generally keep with Catholic teaching, which opposes birth control.

The concern is that as Catholic hospitals dominate the market, secular hospitals that are absorbed into their systems will discontinue those services.

Gov. Jay Inslee has asked the state to research how affiliations affect patient access in Washington.

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