By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Facility Fees for Hospital-Owned Physician Offices: A Nasty Surprise for Patients
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Facility Fees for Hospital-Owned Physician Offices: A Nasty Surprise for Patients
Business

Facility Fees for Hospital-Owned Physician Offices: A Nasty Surprise for Patients

DavidEWilliams
DavidEWilliams
Share
3 Min Read
SHARE

When hospitals purchase free-standing physician offices they often convert them into outpatient clinics. The shift isn’t visible on the surface, but underneath the covers a powerful economic transformation has taken place, with the new owners now able to charge a so-called “facility fee” to cover the cost of their infrastructure. Medicare and commercial health plans routinely pay such fees.

When hospitals purchase free-standing physician offices they often convert them into outpatient clinics. The shift isn’t visible on the surface, but underneath the covers a powerful economic transformation has taken place, with the new owners now able to charge a so-called “facility fee” to cover the cost of their infrastructure. Medicare and commercial health plans routinely pay such fees. That can double or triple the price of a routine echocardiogram and other services, as the Raleigh News & Observer reports.  Hospitals try to justify the charges based on their higher obligations for service and the need to take all-comers, but that’s a pretty thin excuse especially when barely any changes are made to the acquired practices. Imagine trying to make an argument like that in any other business.

As a result, hospitals have a strong economic incentive to restructure the market in a way that drives up prices for everyone without adding value. The delivery of care is becoming less efficient and more concentrated at a time when small service providers are using technology to thrive in other sectors.

This artificial and costly distinction between physician offices and outpatient clinics (with facility fees) has been going on for some time now. You see it for colonoscopies and infused drugs, but there has been little public blowback until recently. In general health plans and self-insured employers have just put up with the high charges or haven’t made it a priority. The biggest difference now is that patients are being exposed to the facility fees and finding that they owe much more after a test than they used to. So while hospitals used to shrug their shoulders at the issue in the past, they find it a little harder now. The News & Observer article is a great example of a piece that raises awareness and will cause a lot of patients to speak up –or take their business elsewhere. Transparency tools such as Castlight Health, which enable employees to see the costs ahead of time, will also start to make a difference.

More Read

All You Need To Know About Medical Website Development And Design
The HHS Plan to Reduce Racial Disparities in Health Care
Paying for Care
Is Our Medicaid System Vulnerable to Collapse in 2014?
How a Tear-Jerking Cleveland Clinic Video Went Viral

Payment reform and patient empowerment together are needed to beat back the facility fee for doctors office visits. While it’s disturbing to see what the trend has been up to this point I’m optimistic that the tide is turning and that we’ll see real progress over the next two years.

Share

TAGGED:facility feeshealthcare costs
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5KFollowersLike
4.5KFollowersFollow
2.8KFollowersPin
136KSubscribersSubscribe

Latest News

How Expanding Outpatient Nursing Options Is Reshaping Career Trajectories
Career Nursing
March 18, 2026
health care workers working together
How an MBA Healthcare Management Online Program Equips Leaders for Tomorrow
Health
March 18, 2026
close up of hands holding baby feet
What to Record After a Preventable Birth Injury
Health care
March 14, 2026
Person Stressed Out in Courtroom
How Legal Challenges Can Affect Health and Wellness Journeys
Policy & Law
March 14, 2026

You Might also Like

How the Healthcare Industry Has Reduced Aggravation For Patients

February 8, 2016
Health careMedical Records

Patient Misidentification: Just How Damaging Is It?

August 2, 2019

Using Data to Improve Patient Satisfaction Scores

April 22, 2015

3 Tips To Getting The Best Results From Your Independent Medical Reviewer

February 12, 2016
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?