Coming soon to a strip mall near you: An MRI provider

Crain's Chicago Business reports:

More and more medical procedures are moving to the strip mall, thanks to high-deductible insurance plans that are turning patients into penny-pinchers.

Hospital systems like Edward-Elmhurst Health are reacting, hedging their bets on what have been lucrative captive practices. Last year it invested $7 million in an outpatient MRI provider that is now poised to grow with backing from another hospital system. Look for the trend to expand beyond urgent care clinics and medical imaging ​ to storefronts providing colonoscopies, knee and hip replacements, and other delicate procedures, including even childbirth.

The rise of strip mall health care presages a "fundamental shift toward more transparent, market-driven pricing" and changes in hospital capital allocation, says health care industry consultant David Johnson in Chicago. "What's happening in the private market will ultimately reshape health care more than government reimbursements."

Rick Anderson, CEO of Smart Choice MRI, which has a handful of Chicago-area locations and a $600 maximum fee, describes a typical 1,500-square-foot location as a "white box with a million-dollar baby"—the scanning machine—"next to a Starbucks."

The doctor-patient relationship traditionally avoided any kind of price shopping. But high out-of-pocket charges for health care, internet-empowered consumers who can easily compare prices and doctor ratings, and medical offices popping up like mattress stores are changing that.

Last month, the federal Center for Medicare & Medicaid Services said it's considering paying for joint replacements in outpatient settings, which would encourage private payers to do the same. Between 25 and 50 percent of joint replacements could be done on an outpatient basis, according to the Ambulatory Surgery Center Association.

The first free-standing birth center in Illinois opened in Berwyn in 2014. The state's second is in Bloomington. On its website, the American Association of Birth Centers lists more than a dozen others in Indiana, Wisconsin and other Midwest states.

Competition lowers prices! What a shocking concept to people ignorant in economics.