Costs Will Rise as Another Obamacare Feature Kicks In

Published October 28, 2014

Looks like another mistaken assumption by the authors of Obamacare and other devotees of government-run health care is being exposed. We’ve heard for years that the ‘fragmented’ nature of health care in the U.S. drives up costs because different doctors seeing the same patient don’t always coordinate and communicate well, and the answer (or at least an answer) is to push independent practices to consolidate with larger health systems and hospitals.

Unfortunately, as the Journal of the American Medical Association points out, turning independent physician offices into hospital-based offices means higher reimbursement rates, and higher costs:

In 2012, physician-owned physician organizations had mean expenditures of $3066 per patient… hospital-owned physician organizations had mean expenditures of $4312 per patient… and physician organizations owned by multihospital systems had mean expenditures of $4776…

The Heritage Foundation has a terrific study from this past summer explaining just how Obamacare is pushing the consolidation of physician practices with larger health organizations and hospitals, “How the Affordable Care Act Fuels Health Care Market Consolidation.”

It’s hard to believe the authors of Obamacare could get so much wrong, but I guess when considering their approach to lawmaking was based on buzzwords, polling, and ideology, maybe it isn’t so hard to believe.