Thirty years ago, more than three out of four physicians owned their practices but today fewer than half of U.S. physicians work independently of hospital physician networks.
High costs and low insurance reimbursement rates have driven more doctors to join hospital physician networks, leaving behind a small number of independent doctors seeking to compete against larger hospital-employed groups.
Some independent doctors say this trend is bad for patient care and in the long run can lead to higher costs for patients.
Dr. Kenneth Christman, a Miami Twp. plastic surgeon with a solo practice, said his practice is an example of the pressures that independent doctors are under.
Christman was recently interviewed by the Dayton Daily News for an article about patients caught off-guard when their insurance companies refuse to cover care because the doctor is out-0f-network – even when the care is in an emergency and the patient didn’t know the doctor was out-of-network.
These patients have described this as “surprise billing,’’ and some are fighting the bills. But Christman calls it “surprise non-payment,” because the doctor may not be compensated if the insurance company or patient doesn’t pay the bill.
Christman said independent doctors like himself don’t have in-network deals with insurance companies because their work is worth much more than the rates they are offered from insurance companies. Hospitals are large enough to negotiate better rates than solo practitioners, Christman said.
“In any larger practice, the larger it is, the more clout they have and more they have to deal with those people,” Christman said. “But the smaller ones, they get picked off.”
Christman said the in-network rates for small practices are so low he couldn’t stay in business if he had in-network contracts with insurers.
“I can’t afford to pay my employees and pay rent on these amounts. It’s just financially impossible,” Christman said.
He said independent doctors can give a patient more individual attention. He said he is worried about patients being told to use nurse practitioners and physicians assistants when they should be treated by doctors or surgeons.
But the insurance industry contests the characterization.
“With the vast majority of physicians, including small and independents, successfully contracting with insurers, it begs the question of whether the problem lies with the health plans or with a few physicians demanding unreasonable health care prices,” said Miranda Motter, president and CEO of Ohio Association of Health Plans, which represents the insurance industry. “Unreasonable health care prices are unfair to consumers and directly impact the affordability of health care, and ultimately affordability of health insurance.”
Anthem, the largest insurer in the Dayton market, said in a statement “collaborative relationships are important in helping to provide our consumers with access to high quality affordable care, while also ensuring that care providers and hospitals are compensated fairly.”
“Anthem Blue Cross and Blue Shield successfully contracts with greater than 95 percent of Ohio care providers – including many small group and independent physicians, and large integrated health systems in the Miami Valley.”
Bryan Bucklew, CEO of the Greater Dayton Area Hospital Association, said the incentives from government and commercial insurers are for more efficient, value-based care, and physicians are joining with hospitals because the hospital networks have the administration to deal with the upheaval from constantly-changing rules.
“There are significantly more employed physicians than 10 years ago and that is dictated a lot by the payment and quality initiatives that are being promulgated by (Centers for Medicare and Medicare).”
Bucklew said the new payment systems from insurers are built to reward providers who can control the whole continuum of a patient’s care, from diagnosis to rehabilitation, which is something independent practicing doctors aren’t built to do.
“The system is moving away from just a single doctor practicing,” he said.
Primary care doctors have faced some of the largest challenges in the current health care environment and are on average paid the least compared to other physician specialties. Leaders of PriMed Physicians said their physician-owned network in the Dayton area is a way for primary care doctors to band together while still having autonomy from a hospital. The doctors can pool resources for things like pricey electronic health record systems and share administration for growing data collection requirements.
“Part of the reason why previously independent physicians have joined hospital networks is to try to offload some of that,” said Dr. Tom Greer, physician manager. “Our advantage is we’re big enough where we can relieve some of that extra burden.”
While more physicians than ever are employed by hospitals, data from the American Medical Association also shows that hospitals have been slowing down the rate they are acquiring more practices. Thomas Campanella, professor of health economics at Baldwin Wallace, said that should be a good thing for the consumer.
More patients are paying with high-deductible plans and employers are taking on more of the cost of providing health insurance benefits, and those cost-conscious patients are finding that things like MRIs can be cheaper at a small practice.
“Consumers are actually better off with choices,” Campanella. “I don’t think the independent practice is dead and at the same time, what that will do from a positive standpoint is also put pressure on hospital systems that have employed physicians to be that much more value-based because they got competitors in the marketplace.”
But Dr. David Westbrock, a retired local endocrinologist, said doctors are losing their autonomy and their profession is becoming more corporate and less patient-focused as more small practices are acquired.
“If we look at the change in the horizon, we went from having control of our practice to having virtually no control,” he said.
Medicine isn’t like it used to be when Westbrock graduated in 1972 and when he retired in 2010. He said he retired earlier than he would have liked because he couldn’t make things work.
“When I went into medicine it wasn’t how much money I make. It was about caring for patients,” he said.
Dr. John Fleishman, a Dayton ophthalmologist who has been practicing for 33 years, said independent physicians aren’t under the same pressures to “churn out patients” the way a hospital-employed physician might be.
“When you have an employed physician … the physician answers to their employer,” he said.
He said if patients better understood prices they would be more likely to support independent physicians. Christman supports a Ohio law that he said would solve the issue by mandating better transparency for patients.
Rep. Jim Butler, R-Oakwood, sponsored a bill that was passed by the legislature in 2015 that required an estimate in “good faith” of what a medical bill would be in non-emergency cases.
But the Ohio Hospital Association and other medical professional groups filed suit, saying the law would be unworkable, and a court granted an injunction to stop it. Gov. John Kasich’s administration also has yet to write rules creating the guidance that would allow the law to take effect.
Christman said the legislation would work better for consumers.
“My patients have a right to know. A lot of patients have come to me outside their network. I tell them what I’m going to charge them. I give them the dollar amount. And furthermore, I tell them look, I can do this cheaper right here in my office,” Christman said.
Butler said one way to rein in rising health care costs is to give consumers the medical pricing information they need to seek out cheaper care.
“The missing link is we don’t know what the costs are so we can’t shop around,” he said.
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