News Clips
Modern Healthcare: Prices increase at independent hospitals post-acquisition, research shows (8/1) – Average inpatient prices for commercially insured patients rose five percent after health systems acquired an independent hospital, according to an analysis of commercial claims from 2012 to 2018. Readmission rates for patients receiving cardiac care at those hospitals increased by up to 12 percent, and remained elevated for three years after the acquisition. Providers pursuing mergers are running into resistance from attorneys general and policymakers, who are citing a number of studies showing a correlation between hospital consolidation and price increases. Price increases typically translate to higher insurance premiums and out-of-pocket costs for care.
American Medical Association: Physician answers on this survey will shape future Medicare pay (7/31) – Thousands of U.S. physicians will be getting a short patient-care hours survey from either their practice directly or from Mathematica. Participation will ensure that practice expenses and patient-care hours are accurately reflected. The aim of the Physician Practice Information (PPI) Survey is to better understand the costs faced by today’s physician practices to support physician payment reform. The study will rely on financial experts in physician practices to complete the online financial information survey, but doctors’ input on their patient-care hours is equally essential. The study gives physicians and practices a chance to communicate accurate financial information to policymakers, including members of Congress and CMS.
Wall Street Journal: Doctor’s Office Care at Hospital Prices | op-ed by Bobby Jindal and Charlie Katebi (7/26) – Currently, Medicare pays hospital-owned facilities two to three times as much as independent physician offices for the same service, according to the Alliance for Site Neutral Payment Reform. This creates an enormous incentive for large hospital chains to acquire outpatient practices. Consolidation creates a vicious circle in which larger hospital systems can demand ever higher rates from insurers and also have the capital to buy up physician practices. Removing this perverse incentive will ensure that patients have access to trusted doctors and appropriate care at the same price regardless of treatment location and remove artificial pressure to consolidate. Site-neutral payments would save taxpayers more than $153 billion in Medicare spending over the next decade and also substantially reduce premiums and cost-sharing for Medicare beneficiaries by $94 billion, according to CRFB. In total, these changes could save patients and taxpayers between $346 billion and $672 billion over the next decade.
Modern Healthcare: Providers reconsider noncompetes ahead of proposed FTC ban (7/26) – As the health care industry braces for potential federal action on noncompete agreements, some providers are reassessing the need for them. Noncompete agreements generally restrict employees from working in a specific geographic area or doing similar work at a rival company for a specified period of time. Where legal, they have become standard in many health care contracts, with researchers estimating in a 2020 study in the Journal of Human Resources that at least 40 percent of physicians are held to the agreements that typically bar them from working for competitors within a 30-mile radius for one or two years of leaving companies. “I think of this as being an opportunity for every organization to really rethink all of their policies, their documentation, their handbooks, and truly their culture and values.’”
Healthcare Innovation: AHIP, NAACOS, AMA Publish Data-Sharing Best Practices Playbook (7/25) – America’s Health Insurance Plans (AHIP), AMA, and the National Association of ACOs (NAACOS) have combined forces to develop data-sharing best practices that organizations may voluntarily adopt to support the growth of value-based care. While recognizing different entities have inherently varying needs and uses for data, the workgroup identified five key areas of opportunity: (1) create an interoperable data ecosystem; (2) share more complete, comprehensive data; (3) improve data collection and use to advance health equity; (4) share timely, relevant, and actionable data; and (5) make data methodologies, calculations, and context readily and easily available.
New York Times: Your Exorbitant Medical Bill, Brought to You by the Latest Hospital Merger (7/25) – After decades of unchecked mergers, health care is the land of giants, with one or two huge medical systems monopolizing care top to bottom in many cities, states and even whole regions of the country. Reams of economic research show that the level of hospital consolidation today — 75 percent of markets are now considered highly consolidated — decreases patient choice, impedes innovation, erodes quality and raises prices. As hospital systems have grown — and become major employers — their sway with state legislatures has created new obstacles to curbing consolidation. The newest challenge is how to handle the growing number of cross-market mergers, where huge health systems in different parts of a state or of the country join forces. With the FTC becoming more aggressive and legislatures considering such measures, perhaps hospital systems will heed the warnings and behave more like the care providers they’re meant to be and less like monopoly businesses.
STAT: Extensive review finds private equity owners jack up the cost of medical care (7/20) – Private equity firms are rapidly buying their way into the U.S. health care system, and as they do, new research finds they tend to increase costs and may also harm quality. A new BMJ systematic review rounded up 55 studies on the effects of private equity buyouts in health care globally to flesh out an overarching conclusion. The team of researchers found that private equity ownership generally means higher costs for patients, insurance companies, and government programs. The effects on quality were mixed, with more evidence showing that such financial investors degrade quality. The strongest effect of private equity ownership the researchers found across the studies was higher costs to patients and payers. None of the studies found services cost less after the buyouts, and nine showed they cost more.
Health Affairs: The Area Deprivation Index Is The Most Scientifically Validated Social Exposome Tool Available For Policies Advancing Health Equity (7/20) – This year, CMMI took a ground-breaking step, creating policy aligning with multi-level equity science and targeting resources based on both individual-level and exposome (neighborhood-level) disadvantage in a cost-neutral way. In ACO REACH, CMMI uses the national Area Deprivation Index (ADI) ranking, plus an additional 25 points for Medicare and Medicaid dual eligibility. The ADI is the most heavily independently validated, scientific tool for US neighborhood-level (exposome-level) disadvantage that exists today. It is not surprising that with dollars at stake, critics have emerged. Here we respond to concerns about the use of ADI in risk adjustment and present a five-point framework for considering ACO REACH and the HEBA, as well as future health equity policy.
Med City News: Fewer Physicians Are Practice Owners Than Ever & Medicare Rates Are to Blame, AMA Says (7/19) – Over the past decade, a significant percentage of the country’s physicians have shifted from working in private practices (defined as those owned wholly by physicians) to working in bigger, health system-owned practices. A key reason for this trend is that physicians gain negotiating power with payers when they work at larger organizations, according to a new report published by the AMA. Between 2012 and 2022, the share of physicians working in private practices decreased by 13 percentage points — from 60.1 percent to 46.7 percent. The report shows that the number one reason that physicians sell their practices to hospitals and health systems is related to payment concerns. A full 80 percent of physicians surveyed by the AMA said that the ability to negotiate higher payment rates with insurance companies was a crucial factor that influenced their decision to sell their practice.
STAT: States increasingly look to regulate hospital facility fees (7/19) – Unexpected “facility fees” charged by hospitals have become a growing source of rage for patients, and more states are taking steps to rein them in. A new report, published by Georgetown University’s Center on Health Insurance Reforms and West Health, examined 11 states that regulate facility fees and conducted interviews with numerous government officials, patient advocates, health insurers, hospitals, and billing experts. The issue cuts through traditional politics, as both liberal and conservative states have made it a priority. For example, last year, Medicare paid $189 for a 15-minute doctor visit in a hospital-owned clinic — and facility fees made up $121 of that total. Medicare paid half that, $92, for the same visit in a freestanding clinic. MedPAC has encouraged Congress to allow Medicare to pay the same amount for services in all settings “when doing so does not pose a risk to access.”
Medical Economics: Physicians blast health care consolidation, unneeded regulatory burdens in U.S. House hearing (7/19) – Smaller and independent physician practices were part of the discussion in the hearing “Burdensome Red Tape: Overregulation in Health Care and the Impact on Small Businesses.” Meanwhile, lawmakers brought their editing pencils for the House Energy and Commerce Committee’s full markup of 15 health bills. “When regulatory costs reach the point that it is no longer feasible for small, private health care practices to keep their doors open, it leads to one thing: consolidation,” House Small Business Committee Chair Van Duyne (R-TX) said. “While proponents of consolidation claim that health care mergers decrease cost and improve access to care, the reality is quite different. Far too often, consolidation decreases quality of care, eliminates competition which increases cost, and removes the possibility of physicians owning their own businesses, thereby crushing the American dream.”
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