Is Consolidation Driving Up Health Care Costs In Rural Washington?

Nearly half of doctors' offices are now consolidated within hospital systems, a trend that some say is contributing to higher costs and fewer services, especially in rural areas.  A new GAO report shows the number of independent physician offices that are part of hospital systems has increased dramatically since 2012.

Dr. Saravanan Kasturi, with Northwest Endovascular Surgery in Richland, WA, says private practices like his are struggling in part because Medicare reimbursements have not kept up with the cost of providing services, resulting in a loss on many procedures.

"We are just averaging things and cutting things and figuring out how to make things work, or cutting staff and taking less salary," Kasturi noted.  "There are a few months I had to go without pay to make these things work."

Jason McKitrick with the Office-Based Facility Association said while Medicare reimbursement rates for private practices have been falling, rates for hospitals – for the same procedures – have increased, bumping up costs for patients.  He said the proposed rule would increase payment rates for all office-based providers, including primary care and proceduralists.

"Anybody that is providing services in the office-based setting, their rates are increasing – for the first time in the last six years. They're still not back to where even they were in 2021, but they've gone in an 'up' trend."

Kasturi added when office-based procedures become financially unsustainable, patients have to go to hospitals for care – where they face longer wait times and higher bills.  The future, however, holds some potential relief, he added; Medicare reimbursement rates for doctors' offices could rise in January.

Click Here to read that GAO report.

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