A new Health Affairs study finds that cardiologists and gastroenterologists employed by hospitals or private equity groups charge about 21% more than independent physicians for the same procedures, despite no evidence of improved outcomes.
- Market share (2023): 72% of cardiologists and 57% of gastroenterologists were hospital-employed.
- Price differences:
- Hospital-affiliated GI doctors billed ~$123 (20.7%) more per procedure.
- Hospital-affiliated cardiologists billed ~$18 (16.3%) more.
- Hospital-affiliated GI doctors billed ~$123 (20.7%) more per procedure.
- Private equity impact: PE-owned practices charged 6% higher in cardiology and 10% higher in GI, with spending potentially reduced by $156M if aligned with independents.
- Regional variation:
- Hospital ownership dominates in the North (Minnesota 98%, Wisconsin 95%).
- PE-backed groups more common in the West/South (Arizona 16%, Nevada 11%).
- Hospital ownership dominates in the North (Minnesota 98%, Wisconsin 95%).
- Cost implications: Aligning hospital/PE pricing with independent practices could save $2.9B annually.
Researchers suggest these higher negotiated rates stem from market power, not quality, with insurers failing to leverage bargaining power effectively.