by Brenée Goforth
Communications Associate, John Locke Foundation
This week, reporter Julie Havlak wrote an article for Carolina Journal on the dwindling number of independent physicians, the causes of this decrease, and what it means for health care.
Havlak explains that only two in five family physicians are independent, and that number is only decreasing. What this means in practice is that more physicians work for hospital conglomerates which charge higher prices for health care. Havlak uses the story of Dr. Michael McCartney to illustrate the problem:
When hospitals own primary care doctors, patients feel the difference. Owned primary care doctors face pressure to refer within the system, whether they’re sending patients to the best doctor or not. Patients also face higher costs, as hospitals can charge them extra fees that can total hundreds or thousands of dollars…
[Dr. McCartney] is suing CaroMont to escape his restrictive covenant. He says he lost control of his practice three years ago, when he switched to the hospital’s IT system, and he wants it back.
“It became more what’s best for the hospital system,” McCartney said. “We lost control of the ability to set the cost, so it became hospital pricing instead of out-patient family physician pricing. So, those patients with a high deductible are suddenly getting hit with more charges, and we can’t change that.”
When hospitals gobble up physician practices, prices jump an average 14%, raising insurance premiums and deductibles.
Havlak explains why hospitals want to absorb as much of the pool of primary care physicians as they can:
By themselves, primary care doctors are worth little. On the ladder of doctors’ salaries, they dwell at the very bottom. There’s a mounting shortage of primary care doctors, as medical students eye the salaries of specialists — who can make almost three times more than primary care doctors — and specialize.
But to a hospital, primary care doctors are worth much more.
They control referrals. As the first point of contact a patient has with the medical industry, primary care doctors decide where to send patients who need to see specialists, get tests, or receive treatment. They are the gateway to the medical system — and whoever controls the entrance controls the building.
Owning primary care doctors is even more lucrative than it seems. Because hospital systems provide charity care, Congress allows them to slap patients with fees forbidden to independent physician practices.
These facility fees can cost hundreds and thousands of dollars, without adding value for the patient.