type: timeline_event
Between 2012 and 2024, the percentage of doctors employed by hospitals or health systems more than doubled from 27% to 55%, enabling systematic price gouging through 'facility fees'—charges hospitals add to medical services even when patients never set foot in a hospital. Hospitals can charge facility fees for services provided by any healthcare provider they employ and at any facility they own, including former independent physician offices. A 2020 study in Annals of Surgery found facility fees for common outpatient procedures rose 53% from 2011-2017 while physicians' professional fees remained steady, with increases primarily driven by facility fees and out-of-pocket expenses. The Massachusetts Health Policy Commission found facility fees grew more than four times faster from 2019-2021 than physician/professional fees, representing the greatest increase in medical spending in Massachusetts' commercial healthcare market. Hospitals deliberately acquire independent practices because the revenue from facility fees provides massive profit increases—the larger they become, the more negotiating power they have with insurance companies to demand higher rates. Private equity acquisitions of physician practices grew sixfold from 2012 to 2021, accelerating the facility fee extraction model. The practice creates surprise bills for patients who believe they are visiting their regular doctor's office but receive separate, often much larger facility fees on top of copayments and professional fees. By 2024, 20 states had taken some action to regulate facility fee billing, with Connecticut becoming the first to require clearer disclosure and Indiana limiting hospital billing for off-campus services. Ohio and several states banned facility fees for telehealth visits, while New York and Colorado limited them for preventive services. The systematic conversion of independent physician practices into hospital-owned facilities represents a multi-billion dollar wealth extraction scheme enabled by regulatory loopholes and inadequate price transparency enforcement.