Independent doctors and practices are rapidly disappearing from the U.S. healthcare sector. However, the overall question of what this means for the industry is polarized. While some stakeholders believe this will increase costs and reduce accessibility, others say it will make the healthcare system more sustainable.
A recent report revealed A pretty amazing data — By early 2021, hospitals and other corporate entities (such as insurance companies and private equity companies) own approximately 48% of doctors’ clinics. This means that in January, one in seven American doctors were employed by hospitals or companies.
Stanford University professor, author and former CEO of The Permanente Medical Group Robert Pearl said in a telephone interview that the overall trend of health care industry integration is one of the main driving forces for the acquisition of physician practice.
“You will see that most of the care is provided by relatively few insurance companies, you will see the growing integration between hospitals, and [then] The doctor found himself relatively powerless,” Pearl added. Who wrote a book About doctor culture and its impact on healthcare costs, doctors and patients.
In response to this loss of power, doctors are increasingly open to recruitment and employment. Pearl said that being employed by a hospital, payer, or private equity firm allows doctors to obtain capital and have more bargaining power in terms of reimbursement rates and additional resources (including new technologies).
Howard Drenth, the national leader of Deloitte’s supplier practice, said in a telephone interview that these benefits can make the practice of doctors and the entire healthcare system more flexible and sustainable. For example, compared to staying independent, being hired can make doctors more effective in weathering unexpected storms, such as the Covid-19 pandemic.
“My belief is [physician practice acquisition] It’s a net positive factor,” Durens said. “I believe that the organization as the acquirer or integrator can bring great value to these practices, and these practices may not be realized by themselves. “
It is also important to note that the impact of independent practice acquisitions on the healthcare market varies from buyer to buyer.
Durens said that for insurance companies, the motivation behind the acquisition is integration. Therefore, their focus is on creating a comprehensive financing system and promoting quality performance. On the other hand, the health system usually uses practices to support existing service lines, such as cardiology or orthopedics. The goal of private equity firms is to put scale into the equation to help the business grow faster, thereby increasing profit margins.
Although Pearl and Durance generally believe that the advantages of acquisition outweigh the disadvantages, the groups representing doctors hold the opposite view.
Anders Gilberg, senior vice president of the Medical Group Management Association, said in an e-mail that the practice of independent doctors is a fixed practice in their community, and their losses will lead to less competition in the market in terms of cost and quality.
“Although the impact of integration depends on the type of integration and the degree of market concentration, studies have shown that in the absence of clear evidence to improve the quality of care, supplier integration may lead to increased patient costs,” he said.
Marni J. Carey, executive director of the Independent Doctors Association, echoed this view, adding that the reduction in independent practice means fewer choices for patients. For example, when patients go to see a primary care doctor who is employed by a hospital, they may only be referred to a specialist doctor who is also employed by the hospital. This may result in a closed loop of care, and its cost may be much higher than that of independent doctors, who have greater flexibility in referral.
“Patient inaccessible [when practice acquisitions rise],” Carey said in a telephone interview. “[They] Entering the system does not have extensive freedom to choose the best doctor for their condition. “
MGMA’s Gilberg added that one potential solution for hoping to maintain independent physician practice could be value-based payment arrangements.
He said these can “potentially protect medical practices…by providing a consistent and sustainable source of reimbursement for the services provided, while also creating opportunities for cost savings and improved quality.”
Doctors seem to be showing interest in a value-based care model. Respondents in a survey by the American Association of Medical Groups indicated that their federal program revenues accounted for 56% of their federal program revenues and 28% of their total business revenues. From a value-based payment model In 2018. (The investigation did not involve whether the responding doctor was independent or employed by a hospital or other entity.)
Dr. Christopher Chen, chief executive officer of ChenMed, a concierge physician clinic, fully supports physicians who take more risks.
“The paradox is that for doctors preparing to overcome Stockholm syndrome through paid services, the best strategy is not to “get involved” in a value-based care plan to take a little risk, but to take The risk is great,“He Write in the blog August 2020, on the ChenMed website. “In fact, while serving the best interests of patients, we are doing better financially, and very freely, and it is very likely to do better.”
Photo: Mukahiddin, Getty Images
