When Dr. Jeffery Ward, a cancer specialist, and his partners sold their private practice to the Swedish Medical Center in Seattle, the hospital built them a new office suite 50 yards from the old place. The practice was bigger, but Dr. Ward saw the same patients and provided chemotherapy just like before. On the surface, nothing had changed but the setting.
But there was one big difference. Treatments suddenly cost more, with higher co-payments for patients and higher bills for insurers. Because of quirks in the payment system, patients and their insurers pay hospitals and their doctors about twice what they pay independent oncologists for administering cancer treatments.
There also was a hidden difference — the money made from the drugs themselves. Cancer patients and their insurers buy chemotherapy drugs from their medical providers. Swedish Medical Center, like many other others, participates in a federal program that lets it purchase these drugs for about half what private practice doctors pay, greatly increasing profits.
Oncologists like Dr. Ward say the reason they are being forced to sell or close their practices is because insurers have severely reduced payments to them and because the drugs they buy and sell to patients are now so expensive. Payments had gotten so low, Dr. Ward said, that they only way he and his partners could have stayed independent was to work for free. When he sold his practice, Dr. Ward said, "The hospital was a refuge, not the culprit."