Page 9 - Deleware Medical Journal - September/October 2019

PRESIDENT’S PAGE
ANDREW W. DAHLKE, MD
MSD President Andrew W. Dahlke, MD is a Neuroradiologist who practices with Southern Delaware Imaging Associates in Lewes.
Merger Mania Puts Pressure on Physicians
Independent physicians feel like scuba divers at 125 feet — under pressure. The pressure comes from many sides
and in many forms.
Currently, we are seeing a wave of hospital mergers and acquisitions — hospitals buying hospitals and hospitals buying practices. This consolidation is driven by the belief that fee-for-service payments will diminish and may stop. By becoming bigger, the hospital systems have more leverage in contract negotiations with suppliers, commercial insurers, state governments, and large employer health plans. With the hospital mergers, hospital costs decrease and hospital prices increase. The price increases are reported as 20-40% if both hospitals are in the same market (and
up to 65% in some instances). In non- competing, in-state markets, the price increase is 10-20%. When one hospital raises rates, generally any remaining hospitals also raise rates.
As the hospital merger mania proceeds, hospital systems are being built that
are “too big to fail.” This status further increases their leverage on society. The governing authorities that allow these mergers did not learn from the great recession of 2008. Bigger, after a certain point, is NOT better. Excessive growth increases risk by putting all your eggs
in one basket.
The independent physician is the low-cost provider. As fee-for-service
payments are cut to independent physicians and an increasing share
of health care spending is given to
the health care systems (through a combination of contract leverage,
direct contracting, and risk sharing), physicians are forced to make hard choices. Do they sell their practice to a hospital system and become employed, or embrace a concierge model and maintain independence? If physicians choose to become employed, patients increases 25% (since hospitals typically can charge an additional facility fee that independent physicians cannot charge). This produces increasing patient co-pays. Alternative payment models fuel hospital mergers and practice acquisition. This reduces the number of independent physicians, reduces access to low-cost care, and increases the total cost of care to society.
Because of the lack of transparency
in pricing for medical services, patients usually have no idea how much a procedure will cost. Ideally, there should be a phone app where a patient can type in “coronary artery bypass” and see the price listed for hospitals in a 500-mile radius, or for the entire United States. Patients need this transparency. Medicare covers only 80% of the patient’s costs and the patient needs a supplement to cover the other 20%. For a healthy 90-year-old, the supplements cost $900 per
month. As the baby boomers join the
Del Med J | September/October 2019 | Vol. 91 | No. 5 201