Hospitals acquired 5,000 physician practices in a single year

Since hospital-employed doctors tend to perform services in an outpatient setting, the trend increases costs for Medicare and patients.

Hospitals have been scooping up physician practices at a record clip. Research conducted by Avalere for the nonprofit Physician Advocacy Institute shows hospitals nabbed 5,000 physician practices and employed 14,000 physicians between July 2015 and July 2016, an 11 percent uptick.

Since 2012, that’s a 100 percent increase in hospital-owned physician practices, indicating those medical groups may be struggling to maintain independence in a healthcare landscape that is increasingly geared toward larger, integrated systems.

That scenario increases costs for both Medicare and patients themselves, since hospital-employed physicians tend to perform services in a hospital outpatient setting. The researchers revealed higher costs for services such as colonoscopy and cardiac imaging.

Increased physician employment by hospitals, in fact, caused Medicare costs for four healthcare services to rise $3.1 billion between 2012 and 2015, with beneficiaries facing $411 million more in financial responsibility for these services than they would have if they were performed in independent physicians’ offices, the research showed.

From mid-2012 to mid-2016, the percentage of hospital-employed physicians increased by more than 63 percent, with increases in nearly every six-month time period measured over these four years. All regions of the country saw an increase in hospital-owned practices at every measured time period, with a range of total increase from 83 percent to 205 percent.

This trend, the authors said, shows government- and insurer-mandated payment policies favor larger health systems, creating a competitive disadvantage for independent physicians, many of whom are already struggling financially due to administrative and regulatory burdens. Independent physicians often find it prohibitively difficult to cut costs while maintaining clinical quality, and failure to maintain quality can result in federal reimbursement penalties.

The acquisition trend held true in every region of the country, but was most prevalent in the Midwest; it was least prevalent in the South.

PAI is examining these trends as part of an ongoing effort to better understand how physician employment and health care consolidation affects the practice of medicine and impacts patients.

Republicans release new plan to lower health premiums, stabilize Obamacare markets

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 Sen. Lamar Alexander and other congressional Republicans are pressing forward with their latest plan to stabilize Obamacare health insurance markets and help provide coverage for patients with high medical costs.

But while previous versions have had bipartisan support, Democrats are refusing to back the latest bill.

Alexander and three key Republicans filed legislation Monday that they said could provide coverage for an additional 3.2 million individuals and lower premiums by as much as 40 percent for people who don’t get their health insurance through the government or their employer.

Beginning in 2019, the bill would reinstate for three years the government subsidies paid to insurers that provide health-care coverage to low-income clients. It also would provide $30 billion in funding – $10 billion a year over three years – to help states set up high-risk insurance pools to provide coverage for people with high medical costs.

The proposal also would revise the Obamacare waiver process so that states will have more flexibility to design and regulate insurance plans. In addition, it would require the Department of Health and Human Services to issue regulations allowing insurers to sell plans across state lines.

“Our recommendations are based upon Senate and House proposals developed in several bipartisan hearings and roundtable discussions,” the proposal’s Republican sponsors said in a statement.

The bill is sponsored in the Senate by Alexander, who chairs the Senate Health, Education, Labor and Pensions Committee, and Sen. Susan Collins, R-Maine. The sponsors in the House are Rep. Greg Walden, R-Ore., who chairs the House Energy and Commerce Committee, and Rep. Ryan Costello, R-Penn.

The lawmakers are hoping to include the bill in a massive spending package that Congress is expected to take up by the end of the week. President Donald Trump told Alexander and Collins in a conference call over the weekend that he wants money to lower health insurance premiums included in the spending package.

The bill marks the latest attempt by lawmakers to offer short-term fixes that could bring some stability to the volatile health insurance markets created under the Affordable Care Act and help offset the higher insurance premiums expected to result from the repeal of the Obamacare requirement that most Americans buy insurance.

Alexander and the Senate health committee’s top Democrat, Sen. Patty Murray of Washington, struck a deal last fall to extend the cost-sharing subsidies for two years. Trump has halted the payments, established under the Affordable Care Act, which are worth around $7 billion each year.

But Murray and other Democrats are refusing to sign onto the latest proposal because it includes language that they say would expand the restrictions on federal funding of abortions.

“Senator Murray is disappointed that Republicans are rallying behind a new partisan bill that includes a last-minute, harmful restriction on abortion coverage for private insurance companies instead of working with Democrats to wrap up what have been bipartisan efforts to reduce health care costs,” said Murray’s spokeswoman, Helen Hare.

Murray “hopes the unexpected release of this partisan legislation isn’t a signal from Republicans that they have once again ended ongoing negotiations aimed at lowering families’ health care costs in favor of partisan politics, and that they come back to the table to finally get this done,” Hare said.

Republicans, meanwhile, pointed to an analysis by health care experts at the management consulting firm Oliver Wyman that compared the new proposal to what people in the individual market will pay if Congress fails to act.

The analysis showed that the package would reduce premiums by up to 40 percent in the individual market for farmers, small business owners and others who don’t buy their insurance from the government or their employer.

A self-employed plumber making $60,000, for example, may be paying $20,000 for health insurance now, but over time that insurance bill could be cut up to $8,000, the lawmakers said.

Preliminary projections from the Congressional Budget Office indicated that the plan could be adopted without adding to the federal debt.