Site-Neutral Payments And Consolidation

Dr. Eric Bricker shows how site-unneutral payments encourage hospitals to acquire practices and shift identical services into higher-paid hospital settings.

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The Chain Reactions Wrecking Healthcare Affordability: Facility Fees, Stark Law, and Noncompetes. Episode 529.

Why do hospital facility fees keep pace with inflation while professional fees fall behind—and how did a law meant to stop kickbacks end up fueling a stipend economy instead? Stacey Richter talks with Eric Bricker, MD, founder of AHealthcareZ and former co-founder and chief medical officer of Compass Professional Health Services, about two action/reaction chains reshaping healthcare affordability: the facility-versus-professional-fee gap, and the Stark Law's unintended stipend economy driving hospital consolidation. Along the way: a $48,126 hospital charge for the same appendectomy that pays a surgeon $609, the AMA's $300 million CPT-code business, and how Tryon Medical Group in Charlotte, North Carolina, won back 90% of its patients by leaving its hospital employer.

WHAT YOU'LL LEARN

✅ How separate physician "professional fee" and hospital "facility fee" billing streams have diverged so far that Medicare pays a surgeon $609 for an appendectomy while the hospital's published charge for it runs $48,126

✅ Why the Stark Law's ban on hospitals paying physicians for referrals gave rise to "stipends"—flat annual payments that can range from $1 million to $50 million depending on hospital size, and how physician consolidation in fields like anesthesiology has pushed those stipends higher

✅ How "site unneutral" payment gaps incentivize hospitals to buy independent physician practices and shift services like echocardiograms into hospital settings to capture higher fees for identical care

✅ Why noncompete clauses trap physicians in incentive structures misaligned with patient care—and how Tryon Medical Group in Charlotte, North Carolina, sued to leave its hospital employer and kept over 90% of its patients

✅ Why self-insured employers (covering roughly 60% of Americans) and physicians organizing beyond fragmented specialty lines are healthcare's "two sleeping giants"

✅ Practical alternatives already in use: employer direct contracting, direct primary care subscriptions, and fixed-fee specialty models like the LA urology group paid on subscription for prostate cancer care

WHY THIS MATTERS

These two chain reactions—the facility-versus-professional-fee gap, and a well-intentioned law that quietly created a stipend economy—aren't abstract policy trivia. Together they drive the hospital consolidation and site unneutral payment schemes squeezing employers, taxpayers, and patients alike. As Stacey frames it, understanding how these action/reaction chains work is what it takes to reverse their direction toward more affordable, higher-quality care. The fix isn't waiting on Washington: it's employers and physicians—healthcare's two sleeping giants—using their leverage, whether through direct contracting, ending noncompetes, or simply voting with their feet.

MENTIONED IN THIS EPISODE

Dr. Eric Bricker's YouTube Channel and his site AhealthcareZ.com

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