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When the ER Is Too Expensive, Where Do the Uninsured Go?
Dr. Patricia A. Farrell -- Psychologist Dr. Patricia A. Farrell -- Psychologist
For Immediate Release:
Dateline: Tenafly, NJ
Wednesday, October 25, 2023


Private equity firms are acquiring physician practices and hospital ERs in order to make a profit for their investors, but this results in high costs and no care for the uninsured as ERs are closing. Where is medicine headed?

Photo by camilo jimenez on Unsplash

The poor and the uninsured, plus those involved in sudden accidents in traffic or their homes, are usually taken to the local hospital ER, but the functioning of these units has undergone a dramatic change in orientation from care to profit and patients will pay the price. “Thirty-three states plus the District of Columbia have rules on their books against the so-called corporate practice of medicine. But over the years, critics say, companies have successfully sidestepped bans…" Where there’s a buck to be made, there’s a way around these bans, and the corporations have found it.

Have you noticed how many of the local hospitals own the "independent" medical private practices in your area? And, in line with this new ownership, are you noticing an increase in normal lab work costs that would have been possibly one-third of what you paid previously? The new owners want all the lab testing to go to the hospital, where fees have greatly increased. Even office visits go up. My opthalmologist used to charge $125 for a visit with an exam, but when he joined a large group, it is now $340 for the same care.

Private equity investment in healthcare has markedly increased in recent years. The total disclosed value of private equity deals in healthcare reached $78.9 billion in 2019, up from $23.1 billion in 2015.” The trend of these acquisitions shows no slowing down and, in fact, may be increasing as a population in greater need of healthcare emerges. In 2022, the number of people over the age of 65 in the US was 65 million. The equation is simple: older age = need for more medical care. As the market increases, so does its financial attractiveness.

Not only may the need be increasing in a world of new viruses and vaccines, but the costs are going up, and it is estimated that Americans pay more for healthcare than any other country in the world. Enter the hedge funds, touting their ability to increase profits by containing costs.

Hospitals have been eliminating their own personnel-operated ERs in favor of outside groups, which can mean out-of-network charges even for those with medical insurance. In fact, it’s not only happening to what we might call “ordinary people” because a Nobel prize winner had to sell his medal to cover medical bills.

Private equity firms that have created individual staffing companies for hospitals and ER care have been accused not only of increasing bills in terms of surprise medical bills, but they’ve also, according to documents in lawsuits, engaged in cutting physicians' salaries even during the pandemic. An instance of medical bill inflation alleged that a bill to a patient was 7.7 times more than the actual cost of physician and support services care.

Physicians in ERs have called for “stiffer enforcement of decades-old statutes that prohibit the ownership of medical practices by corporations not owned by licensed doctors.” One physicians' association is suing one of the larger corporate entities for violating the prohibition of “lay ownership” rules, indicating the association believes it is intended to bypass these laws.

The financial burden of these changes in medicine and the fund ownership inherent in hospitals and ERs is of such a degree that a special GoFundMe page has been set up to help with medical bankruptcies. In 2019, there were in excess of 250K requests for assistance with medical bankruptcy. The need is staggering with personal bankruptcy at about $200 billion. Medical debt is the leading cause of personal bankruptcy.

Patients and healthcare professionals will need to watch the coming lawsuits closely as they may determine future costs, access to care, and financial security for families and individuals.

Website: www.drfarrell.net

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Twitter: @drpatfarrell

Attribution of this material is appreciated.

News Media Interview Contact
Name: Dr. Patricia A. Farrell, Ph.D.
Title: Licensed Psychologist
Group: Dr. Patricia A. Farrell, Ph.D., LLC
Dateline: Tenafly, NJ United States
Cell Phone: 201-417-1827
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