Brooklyn Journal of Corporate, Financial & Commercial Law


Oliver Owaid

First Page



Over the past two decades, the number of physicians in private practice has dropped dramatically. This trend is the result of the financial pressure imposed by the federal government in response to the skyrocketing cost of healthcare. Physicians, frustrated by stagnant reimbursement rates in conjunction with increased administrative costs and overhead, are choosing hospital staff employment in favor of private practice. This trend is to the detriment of the physician, the taxpayers, and, most importantly, the patients. Patients treated in hospital outpatient settings have worse outcomes than those treated in private practice. In addition, hospital procedures cost both the government and private insurers more per procedure, adding to the increase in healthcare expenditures. This is due to the discrepancy in reimbursement rates; Medicare pays hospitals substantially more than private physicians for the same procedures. This Note attempts to clarify the financial and ethical consequences of hospital-centered healthcare delivery, as well to identify the major contributors to the rising cost of healthcare in the United States. This Note also proposes changes to the healthcare system that will lower expenditures by focusing on pharmaceutical drug costs, private health insurance, and the role of hospital systems.