News Clips
Healthcare Innovation: MD-Owned Hospitals: Is a Policy Debate Being Overshadowed by Financial Troubles? (9/12) – Sens. Boozman (R-AR) and Lankford (R-OK) and Reps. Burgess (R-TX) and Cuellar (D-X.) have introduced legislation that would lift the ban on physician-owned hospitals. It's hard to know how that legislation might fare. The legislation also comes at a time when CMS Administrator Brooks-LaSure is intensely focused on shifting reimbursement away from fee-for-service payment and into value-based payment. But what is clear is that the financial-operational landscape around physician ownership of hospitals has shifted, and the time when the argument was regularly made that physicians were simply running away with all the financial rewards of running hospitals, has dramatically faded away. Whoever wins the battle over physician ownership of hospitals will be confronting the stark reality that all the energy is shifting away from inpatient hospital operation now anyway, and that, faced with intensifying clinician shortages and high operating costs, those running hospitals need to think very carefully and strategically about what it means to run a hospital facility overall, anyway.
Indiana Capital Chronicle: Some states back hospital mergers despite record of service cuts, price hikes (9/12) – Research shows that a lack of competition often leads to fewer services at higher costs. In recent years, federal regulators have been taking a harder look at health care consolidation. Yet some states, notably those in the South, are paving the way for more mergers. “There’s a large body of research showing that health care consolidation leads to increases in prices without clear evidence it improves quality,” said Zachary Levinson, a project director at KFF. When researchers studied how affiliation with a larger health system affected the number of services a rural hospital offered, they found most of the losses in service occurred in hospitals that joined larger systems, according to a 2023 study from the Rural Policy Research Institute at the University of Iowa.
STAT: Experts fear private equity will pour gas on cardiology’s overuse problem (9/11) – There’s reason to suspect private equity ownership could exacerbate cardiology’s overuse problem, several cardiologists and researchers said. The effects of the investments haven’t been studied yet, but research in other specialties has found private equity acquisition results in more patients, more visits, and higher charges. Private equity firms bring a bolus of cash so doctors don’t have to worry about keeping the lights on, Hicks said. On the other hand, she said they may incentivize doctors to perform unnecessary procedures. “It can breed a behavioral pattern of overuse because the stakeholders in the practice have bought the practice to make money, that’s why they bought it,” Hicks said. “They’re there to make money.”
Medpage Today: Dear Congress: Take the Easy Win on Medicare (9/9) – In the five years since MedPAC called for the end of MIPS, the program's failures have worsened. At the recent Energy and Commerce subcommittee hearing, there were renewed calls for MIPS to be eliminated. Unlike other problems with the Medicare reimbursement system, this one can be fixed without having to ask, "how much will it cost." Eliminating the MIPS program, or at least hitting pause while an alternative approach is developed, would not only reduce the burden on providers and stop the costly gamesmanship of managing a broken system, but it would also clear the way for meaningful reform. Let's hope Congress takes the easy win.
RevCycle Intelligence: NAACOS: Medicare Payment Incentives Favor Clinicians in Fee-For-Service (9/8) – Medicare payment incentives favor clinicians participating in fee-for-service models rather than those in advanced alternative payment models (APMs), according to the NAACOS. Advanced APMS, such as accountable care organizations (ACOs), have demonstrated the ability to generate savings for Medicare and participating providers. According to the NAACOS blog post, MACRA’s incentives for Payment Year 2026 and Performance Year 2024 will favor clinicians who do not participate in advanced APMs and remain in the Merit-Based Incentive Payment System (MIPS). Congress must develop long-term solutions to incentivize participation in accountable care, NAACOS said. Lawmakers should separate advanced APMs from MIPS and structure MIPS to incentivize participation in APMs. Additionally, they should simplify the incentive structure to account for providers serving rural and underserved populations.
Washington Post: Opinion | The shrinking number of primary-care physicians is reaching a tipping point (9/5) – American physicians have been abandoning traditional primary-care practice in large numbers. Those who remain are working fewer hours. And fewer medical students are choosing a field that once attracted some of the best and brightest because of its diagnostic challenges and the emotional gratification of deep relationships with patients. Already, more than 100 million Americans don’t have usual access to primary care, a number that has nearly doubled since 2014. Furthermore, the traditionally independent doctors in this field have almost no power to negotiate sustainable payments with the mammoth insurers in the U.S. market. Faced with this situation, many independent primary-care doctors have sold their practices to health systems or commercial management chains (some private-equity-owned) so that, today, three-quarters of doctors are now employees of those outfits.
Healthcare Dive: Patients ‘steered’ toward health systems, more costly treatment after vertical consolidation, study finds (9/5) – Patients were “steered” toward more costly care services in health systems, including increased specialist visits, emergency department visits and hospitalizations, after large health systems took over ownership of primary care practices, according to a study published in JAMA Health Forum last week. Vertical consolidation, or when physicians and health systems join through ownership or affiliations, was associated with increased medical spend, but not with decreased readmission rates. Policymakers and regulators may need to consider adopting “a portfolio of countermeasures” to limit the impact of rising care costs as vertical healthcare consolidation becomes increasingly common in the U.S., the study noted.
New York Times: A Huge Threat to the U.S. Budget Has Receded. And No One Is Sure Why (9/4) – Something strange has been happening in this giant federal program. Instead of growing and growing, as it always had before, spending per Medicare beneficiary has nearly leveled off over more than a decade. The reason for the per-person slowdown is a bit of a mystery. Scholars have been arguing about it for years, but no one seems sure enough to confidently predict whether it is likely to stick around for much longer. Most of the savings can’t be attributed to any obvious policy shift. In a recent letter to the Senate Budget Committee, economists at the Congressional Budget Office described the huge reductions in its Medicare forecasts between 2010 and 2020. Most of those reductions came from a category the budget office calls “technical adjustments,” which it uses to describe changes to public health and the practice of medicine itself. Parts of the health system appear to have become more efficient, as medical providers have been more cautious about adopting new therapies without much evidence, and more care has shifted outside hospitals into cheaper settings.
Medical Economics: Independent practices should unleash the potential of collective buying in modern health care (9/1) – In the modern era of health care, independent practices find themselves at a unique crossroads. On one hand, they must navigate an ever-evolving medical supply chain landscape marked by global dynamics, technological disruptions, and changing regulations. On the other, they face the uphill battle of managing rising supply demands and escalating costs. Yet, amid these challenges lies a potent solution: the power of collective buying, which holds a transformative potential for independent practices in an increasingly complex health care environment. Collective buying, while not entirely new, is gaining traction as more practices recognize its myriad benefits. At its core, collective buying or group purchasing refers to multiple buyers coming together to purchase goods or services as a single entity. By pooling their purchasing power, collectives can command better prices, terms, and services than its members could individually.
Medical Economics: Private equity investments in physician practices draw regulatory scrutiny (8/30) – Private equity firms have reportedly invested more than $750 billion in U.S. health care in the last 10 years alone. While some of this investment has been in large systems or ancillary services, a significant amount has been targeted toward physician practices. With an increase in private equity funding and ownership comes a corresponding uptick in attention from federal regulators. In his Executive Order on Promoting Competition in the American Economy, President Biden emphasized that his administration would take “decisive action to reduce the trend of corporate consolidation” and “increase competition.” It is now more than a theoretical possibility that the federal or state governments may take an interest in any perceived impacts on competition because of private equity investments or interlocking board or director roles. As a result, diligent companies should be thinking of these issues at the outset as we are sure to see more interest under this administration.
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