In a beautiful community on the Olympic peninsula, just north of where I live and practice, it happened again; another private clinic sold to a large medical corporation.
Peninsula Children’s Clinic was a bustling pediatric office meeting the vital complex healthcare needs of children in Port Angeles, WA for the commercially insured as well as Medicaid patients. Why were they forced to close?
A phone call with their office manager six months ago foreshadowed the outcome, “we are losing a great deal of revenue seeing Medicaid patients making it difficult to survive.
Peninsula Children’s Clinic was unable to remain financially solvent, so they were purchased, like a horse on the auction block, by the Olympic Medical Center. Their website recently posted the following:
“Peninsula Children’s Clinic is now licensed as part of Olympic Medical Center. Patients seeking care at these hospital-based clinics may receive a separate billing for a facility-fee. This fee could result in higher out-of-pocket expenses for patients.
Patients should contact their insurance company to determine their coverage for hospital-based clinic facility charges.”
Hospital-based clinics tack on “facility fee” charges, which are separate from the bill for the doctors’ services, for the use of the room in which the patient was seen. One hospital administrator told me to think of it as “room rental.”
Facility fees bring in a considerable flow of cash and have the secondary benefit of incentivizing hospitals to buy independent practices because then the hospital can charge two to five times more. Buying independent practices, like Peninsula Children’s Clinic, expands the hospitals’ market share and allows greater leverage when negotiating reimbursements.