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Growing Number Of Physicians Selling Private Practices To Hospital Systems

By Michelle Durham

PHILADELPHIA (CBS) -- Over the past five years, a large number of ob/gyns have left Pennsylvania in favor of New Jersey and other nearby states due to the state's malpractice insurance laws, but there is another trend in medicine in the Keystone State and other places. Doctors are deciding to fold their private practice into a hospital system.

Cardiologist and President of the Pennsylvania Medical Society Dr. Richard Schott is based in Delaware county. He had to make a decision with his practice.

"What we did is roll our cardiology practice into a larger, mega group," Schott says. "There's a very large disparity in payments between what physicians in private practice are reimbursed by Medicare and more glaringly in the private insurance market for identical medical procedures compared to a physician who is employed where the billing is done by a hospital system."

Schott says it makes financial sense for physicians to accept the more lucrative contracts hospital systems offer...but this decision impacts the patient....

"It limits their choice as to where they can get things done," he says. "It increases their co-insurance charges. If there is no one else out there who can do a procedure, the hospitals can charge whatever they wish."

Dr. Schott describes this shift of how care is delivered in the Philadelphia area as enormous.

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