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Silicon Valley surgeons risk 'moral authority' for 200% returns

Bloomberg, July 23, 2012

By rejecting the discounted contracts that participating in- network providers sign with insurers, the surgery center chain operated by Bay Area Surgical Management LLC of Saratoga, California, bill insurance companies at their own out-of-network rates, which are 5 to 35 times as much as the in-network facilities charge, and make a killing. The company pays profits to some 60 surgeon-partners at rates of return that often exceed 200 percent a year. The doctors who buy into the centers get the return on their investments plus fees for performing surgeries. Patients pay little—the chain sometimes waives or reduces their co-pays—and high-quality care keeps the chain's reputation intact.