Most people are probably aware that where they receive their healthcare affects the price. For example, treatment in an emergency room costs more than in a primary care physician’s office, even if the diagnosis in both places is a sinus infection. But perhaps less intuitive is that the payment can change depending on who owns the healthcare facility. Roughly two-thirds of Americans have private health insurance, typically through their employer. But it is often Medicare, the government health insurance program for those aged 65 and older, that sets the benchmark for how healthcare is paid for in this country. Medicare has traditionally paid hospitals more than physicians for the same routine care—even when that care isn’t delivered inside the hospital’s four walls. For common procedures like ultrasounds and biopsies, “hospital outpatient departments” are paid more than privately owned physician offices or imaging centers, even though the exact same service is being performed just as safely in each setting. The difference can be significant. Medicare pays $164 for an ultrasound in a physician’s office, but $339 for the same scan in a hospital outpatient department; a biopsy priced at $150 in an independent office can run $800 in a hospital setting. Rep. Jason Smith, the U.S. House Ways and Means Committee chairman, cited these figures at a congressional hearing in April, as Sally Pipes reported in Forbes. This isn’t just a Medicare problem, either. According to data compiled…
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