Of course they're going to say that if we let them merge "the economies of scale" are going to bring down prices!
What are they supposed to say? - Please let us merge, we'd really like to have a monopoly?
5
This same situation is driving down front line healthcare worker wages in the Phoenix area. Nurses are worked harder every day and for less money, resulting in extreme burnout. Patients are just a list of tasks in perpetuity, with the boxes to check ever expanding and the compensation ever constricting. My position experienced a 10% wage reduction from a number that has been static for 10 years. The cost of living has not decreased...
8
The bottom line is that health care should not be a profitable enterprise. But unfortunately in the United States, health care is one of the most aggressive for profit industries. It doesn't really take a economy masters to figure out where the billions in profits come from. It comes from tax payer moneys that were entirely destined to people's care. That includes, less nurses, more expensive and not needed tests and procedures. The so called "nursing shortage" is not because there is a shortage of nurses, but a shortage of willingness to hire more nurses since they comprise of about 60% of a hospital expenses.
4
@Marcos Taquechel
And the people in charge of the money would rather spend that money on med-tech gadgets that their venture capital funds are investing in than on what patients really need: nurses to take care of them.
2
@Marcos TaquechelYour first sentence is a refutable claim loaded with a bias. What you SHOULD take home from this article is that competition works in any forum where economic principals can be utilized and that certainly includes health care. MBA's now completely dominate the behavior of the "non-profit" portion of the health care sector just as much as they do the profit. All are gaming the pidgeon which is the US government.
When mergers and acquisitions occur in the health/hospital industry, layoffs inevitably occur. When the bottom line becomes the focus, then stats and survey results become the daily bread. This leads directly to lapses in direct care as less staff are now responsible for more results. I try my best to keep myself and my spouse out of the hospital as best I can. I have seen too much and do not trust the level of care anymore.
9
Mergers are like medicines.There are good ones bad ones and inappropriate ones.The states have a responsibility to approve that what makes sense and not those that are not.After the mergers are done the state still has a responsibility to make sure that health standards are maintained and possibly improved .
Where is the governour and the mayor?
2
The consolidation of the hospital industry is one of the single most urgent, pressing crises negatively impacting the health of Americans. Fewer choices mean job cuts, building closures, extended wait times, and skyrocketing prices. The consumer loses every time.
Where is the trump Justice Department when it comes to anticompetitive practices like these?
8
It was obvious to many of us in leadership positions in healthcare in southern New England that the monopolization of healthcare by the creation of a large system would be bad for patients, payers and care in general. When choice is eliminated, price goes up. When competition is eliminated quality goes down. The real question is why the attorney general of CT, acting in concert with the Anti-trust division of the Justice Department has permitted the unrestrained healthcare monopoly in southern Connecticut. Time now to break up the monopoly, unless trends towards monopolization in our economic system are organic, to wit Bell telephone breaks up to baby Bells only to re-anneal as ATT......time for public action groups to sue to break up healthcare monopolies.
6
Hospital CEOs are too busy absorbing smaller hospitals into the “health network” and ignore what’s going on right under their noses. Hospital based departments like radiology, path, etc become underfunded and under resourced.
6
When a high caliber hospital Like Mayo, Columbia or the Cleveland Clinic gobble up hospitals, they also ingest the physicians who staff the smaller hospitals into their group. Sad to say, but many of those docs are not of the same quality as those at the mother house...
5
No surprise here. The rationale is familiar, tired, self-serving and always a lie. It’s about money, and health care in America is no different than hedge funds.
12
My 94 year old father just spent a lost weekend at North Shore Hospital, child of the gargantuan and ravenous Northwell system. In for a simple transfusion, he received benign care at best, neglect at worst, the near loss of a $3000 hearing aid and general disdain from staff. The inedible food only added to the misery. Two miles plus of medical Godzilla. What could possibly go wrong?
9
The Clinton, Bush and Obama administrations lost interest in antitrust and you can expect the same from Trump.. In the United States, between 1997 and 2012, 75 percent of American industries became more concentrated. Someday we may see another Trust Buster, but don’t bet on it
3
@wsmrer
If they won't enforce the anti-trust laws, can't they at least enforce the treasury laws? As in, pay your share of taxes, you are NOT non-profit!
I am SO glad the merger between Houston’s Memorial Hermann and Dallas’s Baylor Scott and White: and that was before I saw this article. Now I’m even yet more glad it didn’t happen!
1
The doctors have big egos and no incentive to decrease costs. Many come from third world countries. They are getting replaced by nurse practitioners and PAs. Their advantage is that they are culturally closer to the patients in the US.
3
If the profit motive is taken away does that make a difference in outcomes?
1
@Margo
Just ask any Canadian!
1
It seems that merger mania is driven more by administrators who seek silver bullets to costs, claiming larger means potentially better, but in reality it means higher pay for more and more administrators. CEO million dollar salaries or more become commonplace even as the quality of health care wheels spin in place.
Some expertise can become available with mergers, but it is not necessarily unavailable without merger of administrations. Better medical referral and reimbursement rates might be streamlined and rely more on medical advice rather than management models of control of systems.
3
@Ed Marth
The more complicated these businesses become, the easier it is for upper management to divert non-profit assets.
2
The humanistic approach to medicine is lost when the "corporation" tales over. It is non feeling, not sensitive, bottom line focused. Choice is diminished. Doctor patient relationships are deeply diminished. It becomes an assembly line approach to care. No provider may know a patient's full story. It is piece meal, taped together with an electronic medical record. The giants say it is for quality that they get together. In fact it is a scheme to develop clout and raise rates. The merged hospitals are forced to feed the mother ship, which is where the power sits. Good luck to all that enter the "machine". May luck be with you.
13
@rich williams I'm 100% with you there. I'm an RN and I see this everyday. I think I spend more time in front of a computer than with patients. The bottom line is to extract as much money from payers as possible. When the focus is to profit, of course the patient is a 2nd or 3rd in line. There is no way around that, merger or no merger.
4
Merging hospitals is likely to increase the revenues and profits of the surviving institution. That's because that hospital will have monopoly pricing power. With less competition, prices on most procedures will go up. Overhead will go down and collections will go up, so profits will increase. The additional profits produced will NOT be used to improve health care, to increase pay of hospital employees, or to reduce costs to patients and their insurers.
What happens to the profits? One, senior management of the hospitals that did the deals get big bonuses. Two. investment bankers who put the deals together get big bonuses. Three, Hospital department heads get better parking spaces.
8
The pressure to monitor and improve patient quality of care is extremely weak, in spite of efforts of Medicare and Leapfrog, especially in concentrated health markets. Pressures to reduce the high growth rate of U.S. health care expenditures overall are very strong, in comparison.
Patients are the weakest stakeholder in the medical system, and budget cuts are more likely to hit their care quality before it affects other stakeholders, such as hospital professional staff, and pharmaceutical and insurance companies..
The Japanese learned from the American experts after WWII that quality control leads to reduced costs. They used thes lessons in building their auto industry. We need to apply these lessons of quality control to healthcare.
We need stronger anti-trust enforcement that promotes competition to improve quality and reduce costs, but competition is not enough. To improve quality of care we need vastly better self- reported detailed statistics on the wellbeing of the population. Doctors should keep track of the symptoms and functioning of their patients, especially those with chronic conditions.
Secondly we need to review the patent system. It is designed to provide monopolies to innovators for a limited time, in return for their publicizing their invention. Large companies have learned to manipulate this system to support unreasonable profits for unreasonably long periods.
Third let's review the pay of administrators of health conglomerates.
7
No surprise here. Mergers happen only in an attempt to make more money and making more money is in direct conflict with patient care. Period. That's why the US needs a single payer system.
By the way, the article uses an example of cardiology outcomes but fails to mention that worldwide the US has hovered around 30th place in cardiac outcomes for many years. Overall life expectancy numbers are falling. We need more than a mild wondering about mergers, journalists need to dig deeper!
12
It is fascinating that so many of us blame the "corporatization" of medicine when (1) most of the same issues existed long before consolidation and (2) physicians clearly still control the pen and the clinical processes in most hospitals. If MBA's have been leading a "drive for efficiency, they have failed in an epic manner as annual expenses have increased 6-8% per year for the past 8 years. They have also failed miserably in their acquisition of all these physician practices as health systems are losing over $200,000 per physician and apparently, based upon this article, have gotten no improvement in quality for the additional investment. The reality is that hospitals are full of inefficiencies and latent profit.
Corporatization and mergers are definitely part of the problem with our healthcare system, but they have plenty of company.
6
@JS: Also true is that the hospitals are full of "consultants" and "efficiency experts" who are paid a absolutely astonishing amount of money.
Ask your local hospital how much they've paid out to consultants in the past few years, and if they have a consultant retained now.
Yet the consultants & so-called "efficiency experts" don't really know what needs to be done for the good of the patients or the staff. What's worse: they don't care about ANY result other than getting PAID their big bucks while they figure out how to increase the CEO's paycheck. That's what they got hired to do!
6
@JS well said, you have hit the nail on the head.I have experienced what you have articulated so well.
1
@JS
Yes, they're wasting health system assets to put independent doctors out of business, and no they don't care. Isn't that the whole point of getting "too big to fail?" They're also "too big to worry" because if any of these "non-profit" mega-health systems with 50, 100, 150 hospitals starts getting short on cash, don't you think they already own a senator or two who will make sure we bail them out?
When hospitals behave like the multi million or billion$$ corporations they are, whether they claim non profit status or not, patient care and health takes a back seat to making money. Hospital administrators used to care about patient care but they now care about the competition to be the highest paid hospital administrator and the one who hires the star doctors while squeezing the nurses and the other members of staff for every dollar and every hour. Patients are an icky inconvenience.
17
I don't know a physician who doesn't feel that the quality of health care today is worse than it was 20 years ago. Mergers, HMOs, Obamacare, governmental rules, layers of regulation, hospital buyouts, etc. have chipped away at the doctor-patient relationship. Medicine today more resembles a trip to Home Depot than a visit to Marcus Welby. More controls, encouraged by the Progressives, will destroy what little rationality is left.
9
The use of economics,consolidation,and competition between hospitals to conceptually analyze “health outcomes” misses an essential aspect of the practice of medicine. Doctors, nurses, nurses aids, nurse practitioners and physicians assistants- namely all those intimately involved in patient care-need to communicate with each other in a seamless fashion. Patient care requires brainpower not money or efficiency or profit margin. When hospitals merge and become corporations with enormous staffs who do not know each other on personal terms and know how each other think and can teach each other, the high power intellectual cooperation becomes fragmented and less efficient. Go into any operating suite and watch how a surgical team who know each other work together. Many nurses know what a surgeon wants sometimes before he or she knows it themselves. It is the same for a hospital taking care of medical patients. If the staff becomes too large, a critical mass, if you will, will be reached and patient care will suffer. The Mayo Clinic seems to have mastered this dilemma, but the corporations now running the large consolidated hospitals are not interested because of the all important profit margin they require. Medicine is an extremely complicated intellectual endeavor and not a place for bean counters.
14
No conversation about the growth in hospital systems would be complete without a quick walk down memory lane. I remember vividly the scores of physicians in NY who sold their practices to hospitals to avoid expenses associated with implementing EMRs. The recession during the Obama years deeply affected the physician psyche, I believe, transforming the mindset from making money to a steady paycheck. Now we hear the complaints about too much consolidation and questionable results. Doctors readily relinquished their power to connect directly with patients. Those who opted to remain in private practice have a genuine beef but no clout. The government has created massive layers of regulations in healthcare, so why are we surprised when administrators dominate policy making. And expect heaps more community based consolidations as the government looks to hospitals to feed and house their patients as well. A ridiculous endeavor, doomed to fail. But it’s coming.
13
I find it ironic, pathetic, and sad that as I read this article, I'm being bombarded by an advertisement on the front page of my New York Times online subscription for the merger of Catholic Health Initiatives and Dignity Health into an entity called Common Spirit! This is what I'm paying for?! I'm not even in their geographic location! Disgusting and Sneaky loop!!!
10
Who should be regulating our healthcare? In the 70’s the answer to this question was medical professionals. A few decades later the answer became unregulated business pros! They chased the money by
consolidating resources, cutting services, and ultimately running for election to positions for which they were not qualified. They have created businesses in place of healthcare. They may become business pros, entrepreneurs, or CEOs, but too many will never become doctors, nurses or healthcare providers.
15
There are many possible reasons for poorer outcomes after consolidation that aren't being addressed here. For example, are markets that are consolidated more rural and perhaps have poorer patients with worse health problems? Did the larger hospital systems replace far more knowledgeable physicians with unsupervised and poorly trained cheap "mid-level" nurses and untested "team based care models" that cause worse health outcomes in order to save money and pay their CEOs and upper administrators bigger salaries?
9
@Uyd: It's happening in NYC which is not exactly a backwater location.
And the consolidations are ALWAYS, ALWAYS about the hospital having more $$$ to pay their CEO's and upper-level administrators. I think it's a shameful thing to do, but clearly the people in charge have no shame.
23
There is another side to the story. Currently, a single health insurance company dominates the commercial insurance market in more than 4 in 10 of the nation's metropolitan areas. Hospital mergers have occurred in response to insurance companies consolidating. Negotiations between two parties are lopsided if one party is more powerful than the other. While hospital mergers may not have lead to better care, they have leveled the playing field in payment negotiations, allowing the hospitals can stay open.
Capitalism.
5
@Alan Mergers have also strengthened the hospitals bargaining power against their workers
1
@Alan, I have yet to find any merger in any industry that benefited consumers. The beneficiaries of the mergers are the executives, the bankers who fund it, and in some cases, stockholders. Consumers are the ones who pay for it all, via higher prices and fewer and lower-quality services.
4
Consolidation may make getting a second opinion more difficult, which is vitally important when dealing with cardiovascular and other life threatening disorders. Prepayment medical plans also make this harder sometimes given their preference for “network” providers.
9
Patients are only a commodity. There's an unending supply of people. Getting sick is a fact of life. Do you really believe that hospitals truly care?
What would happen if we did away with all health insurance? Would prices plummet to a level people could afford care? Would fewer people go into medical fields?
4
@wihiker A lot would plummet to levels people could afford, especially if death wasn't the alternative.
Some things are too expensive for individuals to pay. That's the reason for insurance or a single payer plan. You pay in and hope your heart doesn't get clogged. It's better to have a free flowing circulatory system than collect money from insurance to get it unplugged.
If there was true competition in the health industry prices would plummet and health outcomes would rise.
1
typo :
Yet Martin Gaynor, a Carnegie Mellon University economist who been an author
Lack of competition leads to being complacent - this is not hard to figure out! As a hospital, if you're the "only game in town" (or in that catchment area) you can just do anything you want, and the patients have to accept it.
Also, I have seen (as a patient) what happens now that ALL doctors HAVE TO BE EMPLOYEES of the hospital, rather than having independent faculty practices: the doctors HATE it and that comes across clearly to the patients.
When I go in for an appointment, I am "processed" by an ever-changing group of low-level "assistants" who take my blood pressure (often incorrectly), etc. - apparently, each doctor HAS to meet hospital-determined "metrics" or be penalized! It's like romper room - but with serious medical implications.
I have one particular specialist who is phenomenal - and who will be retiring "young" b/c the hospital's assembly-line structure and insane demands are making the practice of medicine intolerable to this specialist. And it's an absolute shame, b/c this specialist is brilliant, caring and actually LISTENS to patients - but is now quite limited in the time spent with each patient (and has to spend far too much of that time TYPING into the records system).
The only winners here are the hospital ownership & execs.
I can only hope to die in some "fast" way (like a severe heart attack), just so I won't need the sub-par level of care that is unquestionably the future of medicine in the USA.
30
The larger the hospital, the worse the care. I just went through a 4-day hospitalization of a family member for whom I am responsible. I was shocked at how many times I was asked the same questions, e.g. was there a living will, a medical POA, what was the medication and immunization history, even though it was all in the chart for another recent hospitalization, and I went over it with the admissions people. Only once did I speak to the same doctor twice )always a resident— never an attending), and once to the same social worker twice, and if it were not for an alert pharmacist, medications that were not indicated would have been administered. With the big hospitals, we have also lost the family doctor who used to supervise care. The records are electronic, but no one reads them— they rely on family members for important information over and over again. I feel sorry for people with no family to help them out, or family that does not know to ask questions. It was not like this 30 years ago.
22
@Stuart Wilder: Exactly!
And the issue of electronic medical records is a very, very bad joke; now every doctor has access to reams of information about a patient - and NO TIME to read through any of it. Many patients would actually fare better if there were NO previous records on them b/c then the doctor would actually have to PAY ATTENTION in real-time.
23
Interesting to note that the so-called health care industry is not so different from any other industry when it comes to the pitfalls of mergers. It might be more efficient to stop trying to decrease the number of nurses on a floor, to stop turning part of a hospital into a luxury hotel for the richest patients, and to concentrate on treating patients rather than maximizing CEO salaries.
I've visited a few hospitals in my lifetime. I remember how attentive the nurses were in 1984 when my father was critically ill and as he moved towards being ready for rehab. I remember visiting a friend after she had surgery. She told me that the doctors and nurses ignored the note she pinned to her very sore arm telling them to use the other arm for blood pressure. I visited my mother in the hospital after she broke her hip. We played Scrabble. The entire floor smelled stale, was noisy with beeps and bells, and loud personnel. No nurses stopped by during the entire time (about 4-5 hours) that I was there visiting her.
Could it be that the drive for efficiency has taken the humanity and kindness and care out of our "health care" system to the point where it's truly painful to interact with it? Judging by what I've read here and heard elsewhere, I'd say yes. Even a simple visit to the doctor's office is annoying. The first question we're asked is if we have insurance.
13
@hen3ry Health care is a business that, like other businesses, is run by MBAs who have been trained to maximize shareholder value. Because of their strict emphasis on optimizing Numbers, they employ the same approach to whatever industry they happen to be optimizing. Processes must be standardized to eliminate variability, the enemy of shareholder value. Everything must be treated as a widget, to be processed strictly according to the checklist as metrics are collected to allow further optimization.
With health care, the MBA's approach is to remove the humanity from medicine. Humanity is variability, the enemy of shareholder value! Treat patients as standardized widgets on an optimized assembly line, no different from automobile parts or the caps on soda bottles. Doctors have been demoted to mere "providers," both to help them recognize their subordination to executives and administrators, and to facilitate their replacement with lower-cost "providers" like nurse practitioners and physician assistants. A provider's primary task is to continually enter data into computers, which becomes the billing codes that generate revenue.
In hospitals, the costly RNs spend their time on the critical task of entering data into charts. Tending to patients' physical needs is "outside the value stream," and is relegated to lower-cost assistants (or preferably to family members, who do those tasks for free). It's all about providing the best wealth care for executives and shareholders.
23
@Ted My daughter is one of the lower cost assistants. She loves patient care but the demands on her time are such that she can't get everything done. They are chronically understaffed. When she was complaining, I said maybe that was something to bring up with her union representative. This is the big health care provider in our area: She had to sign as a condition of employment that she would not participate in any attempts to organize!! Labor unions are not only about money, but also working conditions. I was shocked.
Most industries in the US are organized in monopoly or cartels. Organized labor is desperately needed to counteract their power and greed.
3
All I know is that our big hospital has eaten up everything - every hospital, blood lab, diagnostic lab, doctor practice, you name it. The main thing I've noticed is that when I call any doctor's office I'm on hold FOREVER.
8
In Boston, the Hospital Mergers are most definitely decreasing the quality of healthcare both in the City and the Burbs. First rate primary doctors are going to the Burbs where they live while second rate Specialists are remaining in the Burbs in order to get referrals. First rate Specialists are staying in the City. Primary Care quality has decreased in the City, whereas those same first rate doctors have to refer to second rate specialists.
1
The conclusion of this article is that consolidation of hospital and medical practice ownership is assiciated with poorer outcomes for patients. Competition is associated with better outcomes. But much of the evidence cited for better outcomes with competition are from the British NHS. Yet, that system is ENTIRELY consolidated. All hospitals and most medical practices are owned by the NHS.
Apparently when the NHS introduced some competiton into the operation of hospitals patients did better.
Perhaps the message is that consolidation is not in and of itself harmful to quality of care, but that retaining some competition within the consolidated system might lead to better outcomes.
2
When hospitals are part of the profit-making system, then one must expect that, with consolidation, profits will increase. That is capitalism. Nowhere is there anything in the rules, except the internal human decency ones, that lowering the cost of care is a corporate goal, even if it is for the public good.
5
Hospital mergers lead to layoffs of business and clinical (read nursing) staff, and that simply lowers the level of care. Couple that with the drive to cut costs in every way, and we all suffer.
13
I am a physician currently employed by a healthcare corporation. All I see around me is mega mergers of large hospital corporations-these changes are ruining healthcare in America. All doctors I see around me (including me) are tired, fed-up, frustrated and angry-yes 60% physicians are showing symptoms of so called 'burnout'. This is not why I became a doctor. Unhappy frustrated doctors do not translate into happy patients. Corporate management does NOT ask our input when bringing in big sweeping changes. When will we realize that the greedy principles of corporate culture cannot be applied to medicine-because it involves peoples' lives, emotions, insecurities and pain. Assembly Line approach cannot be applied to medicine. Wake up people !! It is time for doctors to stand up, get united and fight this greedy corporate trend in healthcare.
49
The best way you and your colleagues can stand up to the system is to walk into work with your resignation letters in hand. Hang out your shingles. Only from there can you fight and win.
2
@David: And then where will those doctors have admitting privileges????
7
@L: as you probably know, privileges and employment are not one and the same. That said, they may have to relocate unless they don’t have a noncompete. If they don’t or it isn’t enforced, then unless the hospital has a closed unit policy — which is the worst — they don’t have necessarily to relinquish privileges.
My wife, her partners, and and their remaining independent physician friends have privileges at multiple hospitals to the extent they choose to have them. Some primary care friends nearing retirement have simply given up their privileges and have outpatient practices only; they have coverage arrangements in place for insurance purposes.
4
Phelps Memorial Hospital in Tarrytown, NY has been merged. I found the new Emergency Room clogged with people on the staff during a visit last year. And then I was offered a cup of coffee by a woman pushing a cart through the ER! ( I was sitting at the bedside of the woman I had accompanied to the hospital.)
“Times change,” I told the coffee lady, “Five of my children were born at Phelps, and I was never offered even a glass of water.”
The take-charge male nurse that day was professional and obviously competent, unlike the female cardiologist who came into the cubicle for no understandable reason, other than to somehow get her ticket punched for the record. The nurse left without any hesitancy, but not without a “Spare me” look, when she began to speak without saying anything.
Drive by Phelps these days and the swallower’s name is in large letters, beneath which the swallowed Phelps sits in humbled diminishment. The new management send news via email that they have put up a site in the Internet that will make it easier to communicate with the hospital. If I didn’t look unkindly at readers who write long, long Comments here, I could tell in detail how this “convenience “ may have perhaps been implemented as a rough draft, a work in progress, inconsiderately from above and therefore unused by me.
4
This article leaves me with more questions than answers. Were the studies statistically significant? In the area where I live, Lakeway, Tx., the ambulance drivers once joked that they would deliberately bypass the local hospital. Not anymore. Since Baylor Scott and White assumed control, I have a superb internist who spent at least an hour with me on my last visit. My interventional cardiologist was equally thorough. I will concede that I am a sample of one, but other patients in the waiting room made similar remarks. The waiting room has a sign that reads, "If you have been waiting longer than 30 minutes, please notify someone at the desk." I spent a career as a healh care executive at Mayo and as the CEO of the Penn Health System in Philadelphia and it my experience, the quality of care does not get much better than I receive here.
3
@Robert Martin Is it in your last sentence that is revealed the real clue as to your special status?
14
@Robert Martin: Hmm, I wonder if your being the CEO of a HEALTH SYSTEM has any correlation with the "superb" doctors and care you receive?! Try going in as John or Jane Doe, and see what your access to the best-of-the-best is.
15
Why is the U.S. healthcare system so horrible, yet Congress won't do a thing to change it?
Follow the Benjamins, baby.
Am I allowed to say that?
18
@ScottW As long as you aren't a young Muslim representative to Congress or a neo-Nazi... The money trail leads right back to the first for profit medicine. When we adopt a Medicare for all, there will be tangles, but we'll end up with a much happier solution. (I've lived abroad and experienced several national health plans)
This article is convoluted. It is comparingtwo entirely different system and coming up with an conclusion. The US is a profit driven Heal Care System and the UK where is is a Nation Health government care system. They are entirely different.
It seems like the author is in favour of the status quo in the US for profit health care system.
I have read this quote several times and the paragraphs before and after and it makes no sense. All Patients, all hospital, all doctors?? Will heart attacks go away if we had 100 hospitals?
The study found that the chance of having a heart attack would go up 5 to 7 percent as the largest cardiology practice became more dominant. The chance of visiting the emergency department, being readmitted to the hospital or dying would go up similarly.
1
Sadly, my wife was 26 hours in the ER waiting for a bed on the inpatient service ,the ER was like a MASH unit.
I was shocked to find her still in the ER the next day lying in a pool of urine (no patient help call buttons in the ER) this is in one of NYC largest hospital merger chains ,this greedy hospital took in as many patients in the Er as could fit ,Drs were dressing diabetic wounds in the hallway ,no one was told seeking inpatient beds how long that wait would be and that the hospital is actually closing it's inpatient services to relocate to 14th street, shame on them for not being in contact with the patients family as to how long a wait would be in the ER ,26 hours for a bed is unacceptable,finding my wife the next day wet in a pool of her urine , is a repulsive ,next time I see this hospitals fancy adverts on TV ,remind me to puke.
My wife's Doctor's by the way, were superb and sympathetic.
9
Doctors are starting to unionize. That should tell you everything you need to know.
26
@VanessaMD, so where can consumers unionize?
@Russ W
In theory the government IS our union. Its role is to act "in the public interest". One aspect of that role is to regulate corporations, and where necessary, to prosecute them.
As each child must become socialized (subsuming there ego & sociopathic tendencies), so too must corporations be regulated to prevent them from pursuing their ego ("profit above all else").
Unfortunately our government (like most throughout history) operates to serve the wealthy & powerful. Formerly Kings, now oligarchs & corporations. What we have here is a failure of Democracy. We are in fact NOT "represented". As the oligarchs and corporations have gone transnational, it is now becoming impossible for them to be regulated by national entities such as the US.
Want a good analogy of how mergers and acquisitions work and who benefits from them in the healthcare field, look no further than Mark McGuire and his tenure at United Health Care. Over a decade or more Mr. McGuire acquired numerous other organizations cutting staff and worsening service along the way( I had it for one year after leaving Kaiser due to a move out of the area, it was horrible, there was always a reason they didn’t cover something) as for Mr. McGuire he initially pocketed $1,600,000,000.00 as his retirement package, so I guess we know where the “efficiencies” went. The only caveat being 5hus was apparently more than even the S.E.C. could ignore so they did a little digging and found evidence of backdating options and McGuire was forced to pay back $400,000,000.00, leaving him a paltry $1,200,000,000.00 to survive on, oh and there was the slap on the hand enacted by the S.E.C. in the form of a $7,000,000,000.00 fine, that’ll teach ‘me. BTW a chart from 1996 shows that CEOs of the top twenty five hospitals received salaries of between $3,000,000,000.00 and $30,000,000,000.00, so huge paydays for bean counters at hospitals is nothing new, and eye my eye surgeon at Kaiser in Redwood City told me fifteen years ago that he couldn’t afford a home in the Bay Area were his wife not a corporate attorney( Hi Doug). The only solution is the Scandinavian Model of single payer and elimination of the private model. These vultures are right up there with Blankfein and Fuld.
20
Anyone else disturbed by the term "cardiology market?"
22
Whoops...the comment below was composed in response to Andy Kessler's op-ed piece in today's Wall St Journal. My reactions to Austin Frakt's comments are completely favorable, consistent with my work on the topic of his report. I apologize any confusion caused by my inept cutting and pasting.
Blame politicians and regulators for the consolidation of health care providers, taxable and non taxable.
Under the prospective payment (price controls) imposed in 1983, the budget act of 1997 and Obamacare, providers had to consolidate so they could afford the administrators and back office they needed to comply with thousands of complex and conflicting rules and regulations.
They spend millions gaming the system to survive.
That same explosion in price controls and regulations has forced providers to spend a greater percentage of their labor budgets on back office people rather than on physicians, nurses and allied professionals.
As for affecting quality, nobody really knows how to measure or report quality. Many try, but they focus on the easy metrics, not the ones that count.
Death rates and mortality rates pose significant cause and effect questions. When a large provider buys a smaller one, does the smaller one bring in sicker patients. Does the way people keep statistics change? What's been the effect of a huge surge in legal and illegal immigration, which bring a lot of unhealthy people to America.
I just don't believe consolidation hurts quality or access, politicians and demographic changes might. Price controls reduce quality and access.
Donald E. L. Johnson @realDonJohnson
5
The huge and growing health system where I live has been eating up real estate and medical practices at a prodigious pace. As a result, they now feel comfortable enough to send patients bills for thousands of dollars that are often wrong, and contain absolutely no information as to procedures performed, their cost and how much of an impact insurance had on the final amount. It is as if you received a credit card bill that only contained the total owed with no individual purchases listed. When you ask for documentation, you receive something that is unintelligible and often bears little relationship to what your insurer says you owe.
Oh, and I just learned that the vast medical practice that I use has recently been bought by the same company that provides me with health insurance. What do you think that does to the “negotiated rates” we are supposed to pay?
The healthcare system in America is truly a shambles. Every day, we are being gouged to the limit as the quality of care declines.
10
We are seeing just the opposite effect in the Triangle area of North Carolina (Raleigh, Durham, Chapel Hill.)
All hospitals and many doctors (most?) are split among three providers: WakeMed, UNCHealth, and DukeHealth. And the competition is fierce in price and quality.
UNC and Duke are research systems associated with top-tied med schools, while WakeMed is the place to go in an emergency with their level one trauma center and 11 satellite emergency room facilities. All are competing to see who has the best cardiac, cancer, and birthing centers. UNC has the clear lead with their world class burn center, and Duke is tops for diagnostic imaging. Public health and infectious diseased has Wake ahead. So even with intense competition there are some areas where one or another excels.
Our biggest problems are twofold:
1. All insurance companies cover only two of the three in varying combinations -- including all those physician practices associated with them.
2. The State of North Carolina dictates any major purchase or expansion of facilities.
So if there is any lack of competition, it is not due to the hospital systems themselves, but two third parties who apply brakes for their own (mostly) idiotic reasons.
3
A good juxtaposition today. This article paired with an advertisement right next to it regarding a merger of two health care systems and how awesome it's going to be!
I completely agree with Mr Frakt. I've seen the effect of mergers first hand and neither the patients or the staff ever come out on the winning side.
6
Shareholders should not be in control of these decisions. And that's really at the root of this sort of merger insanity. These 'economy of scale' ideas simply do not apply in hospitals, or for health care providers. These people want to 'productize' everything. We're human beings. We're not products.
3
Besides the dilution of care in mega hospital systems, physicians who work at these mega centers are minimized to the role of an employee with NO connection to the administration - which is usually a nebulous collection of administrators who are NOT connected to ANY hospital. ALL this to deal with the evil insurance company who do not want to pay or if they do they make it so complicated
4
The reason why economies of scale don't work in general is because they're not designed to...
For example, a health chain says that it will cut their cost on medical supplies with bulk buying power, but then they acquire real estate and have to create a logistics system between their sites. They invest in trucks and drivers and buy a warehouse, heat, cool and secure the place and hire non-medical staff, essentially creating a redundant supply chain which already has many middlemen. Often their IT systems don't work together, so they invest millions on new systems that require medical personnel train mostly for the benefit of the accounting department. Instead of patient care, the operation becomes a retail outlet of wholesale products, charging the patient an exorbitant premium without any choice.
Sadly we see this throughout even our non-profit health systems and EMS in the US with no radical improvement in care and certainly no reduction in cost to the consumer.
If you've been in a hospital and see how much equipment, devices and protocols the medical staff need to know just to support their corporate parents precious profits, you would be both impressed with some staff's superhuman abilities, and terrified that within every organization there are plenty of people who are mediocre at best.
3
"Synergies", "strategic cost reductions", " improved patient care or customer service", "more associate opportunities" etc etc. The corporate PowerPoint mantras buttressing mergers never change and almost always have the same result- higher prices, layoffs and lousier customer service. But the sirens of the synergies still beckon!
11
@Peter - you are spot on with your comment.
@Peter, those synergies absolutely work! For the executives and bankers.
Somehow they always forget to add those last few words to the presentations.
Growing up in Minot, ND, we had one hospital that bought up all the other hospitals and clinics in the area until that was the only option. Quality of care went way down. The next nearest hospital is a two hour drive to Bismarck, and more and more people are choosing to make that drive.
4
Of course oligopolies and monopolies don't improve results. Their goal is to maximize profits/income, and they do the bare minimum required to not lose customers.
What this study shows is exactly what we have known for years:it's not the cost, it's the unnecessary duplication and lack of competition in healthcare that keeps prices high with little improvement in quality. We get poor value for our dollars, and have for a long long time.
Time to go to single payer system and for hospitals to figure out how to do it much much better.
4
I have been involved in health insurance and plans in various countries for over 40 years. Specially in the U.S. there is immense amount of duplication.
On two occasions I was involved in a study of the cost of ten drugs, made by the same American pharmaceutical companies in ten countries. On average, the same drugs cost just over 3 times more in the U.S. than what they cost in the other countries.
Until the U.S. does something about the excessive cost of health, mergers will only lead to local monopolies created with the sole purpose of increasing profits.
9
' “When prices are set by the government, hospitals don’t compete on price; they compete on quality,” Mr. Gaynor said. But this doesn’t happen in markets that are highly consolidated.'
The longer we Americans allow our legislators and upcoming candidates to defer on this subject of making the US far more compatible with the Canadian, British, German, etc. health systems where there are NO billion dollar Corporate MBA hospital CEO's making the pricing decisions and then burying the increased costs information in complicated legal mumbo jumbo fine print, the more damage we do in allowing the current 'consolidation' health system to grow ever more unsustainably expensive.
This is just so extremely aggravating knowing these merger charlatan CEO's aren't being laughed out of their million dollar salary positions knowing the chutzpah they feed to the public. It's deeply offensive.
12
What is sad is that there is nothing unique about these problems -- living in Ontario I am the beneficiary of a different system, but the politicians here are still in love with the idea of forced consolidations to take advantage of 'economies of scale'. Problem is that these are illusions and come from misapplying principles from other areas to human institutions. Many chemical and manufacturing processes exhibit economies of scale because making larger batches means less setup/cleanup time and less administrative overhead. Similarly, purchasing can show lower costs because of bulk shipment and less administrative overhead. But most human organizations do not exhibit these properties -- instead, larger organizations have more complicated command structures that add overhead rather than subtract it. What is worse is the tendency to oversimplify and ignore local needs in favor of one size fits all. And rearranging the org charts can be endlessly entertaining because it conveys the illusion of doing something without getting anywhere near the actual work. And of course, larger organizations demand bigger facilities which also push costs up. Then add outsourcing, which tends to lock in some costs rather than constrain them. What it comes down to is that these popular solutions are bantered about but no one really wants to look at the real issue -- how well did it work? That seems to be the last thing anyone actually wants to expose.
19
@Greg Latiak So well said!
1
Consolidation is driven by many regulatory changes, including the ACA, which are driving healthcare to population health management, rather than a fee-for-service system. With population health, providers are compensated on a more fixed payment basis, which means that providers assume greater risk of adverse actuarial outcomes. The only way to manage this risk better is to acquire greater scale, greater pools of risk sharing. This risk assumption is precisely intended by key parts of the ACA. Other parts of the haywire regulatory system, however, still undermine the communication and data integration required to make this population health policy work (namely, antitrust, Stark and anti-kickback, etc). Policy needs to adopt a single consistent theme and change all regulatory systems in that single direction. Until then, we will get the uncertain results indicated in this piece.
2
Why do we hear complaints that Government is too big and unresponsive but believe that big, bigger and biggest service organizations will somehow escape that to serve us ether?
I have been an RN and manager of health services in NYC and NJ for many years and observed more than a couple of swings in the cycle of consolidation. There is a point where economy of scale does help to bring in fuller resources to any type of health service but we alwáys go way beyond that point to where the MegaSystem is its own priority and we lose on innovation!
4
Here in CT, Yale's hospital system is like the Borg on Star Trek, assimilating everything.
So far I have not experienced any problems, but I've heard complaints from others.
2
The author leaves out an important piece of the puzzle. Consolidation of healthcare systems eliminates competition for providers' services, reduces physicians' autonomy, and torpedoes their job satisfaction. When administrators and pencil-pushing accountants are driving all the healthcare decisions, patients are going to suffer... for profit. Economists just fundamentally don't understand the incentive systems in healthcare.
When hospitals and health systems merge, what is the first thing all the "efficient management" the ice holes with MBAs do? They fire all the nurses and technicians with the most experience, because they have been working longer, are older, and are more expensive. Well, that diminishes the knowledge base within the local culture, weakens trust among team members, and makes providers' jobs more difficult. Imagine being an orthopedic surgeon whose hospital is taken over. You are told after one month that the O. R. nurse you've worked with for 10 years has been fired, and they give you somebody with no experience in ortho. Then they tell you the devices you have been working with, and trust, all have to change, because they get a better deal on the ones you decided not to use. Then they tell you that your O.R. days are moving from Mon. and Wed., to Thurs. & Fri., because that works better for management. Now your patients' recovery days are over weekends, and ward staffing is different on weekends. And I am just getting started.
67
@enzibzianna
Bang on. The suits who run the corporate entities see any care provider, MA, nurse or physician as a commodity. As long as they have someone qualified on paper for the role, they don’t care. And the economists truly don’t understand the incentives they create with their cunning strategies, allegedly designed to improve patient care and save money.
9
Bingo. My wife and her partners have remained independent physicians. We’ve seen the awful impact on our physician friends who went from a learned professional to a mere employee who is nothing more than a fungible billing unit. I know it’ll never come to this, but I’ve told her I’d rather live in our car than see her succumb to the beancounters. Early retirement may be on the horizon if the local hospitals decide to put her out of business like they are doing to other independent practices.
13
@David At our "network", when they send out a physician satisfaction survey, they no longer ask what department you work in, but rather, what is your cost center. Very Orwellian!
5
As a surgeon who has remained independent of working for a hospital system I find these comments very interesting. The over arching sentiment is dissatisfaction with corporate healthcare which has supplanted quality care for profits while marginalizing both patients and physicians. So what are we going to do about it? Is it time for yellow vest protests by patients and their doctors?
37
Here’s the first move. Your colleagues need to take back control as professionals controlling their practices.
Young grads, unfortunately, are increasingly uninterested or the business side of medicine. They also don’t want to work the long hours many independent physicians do, perhaps because they weren’t trained to do so because of artificial limits on working hours during residency.
So, what happens? They allow themselves to be controlled by administrators whom you wouldn’t trust to cut your grass let alone into your body. And we all suffer as a result.
5
Our healthcare markets might as well be a cartel where prices are kept artificially high. Our healthcare system is profit centered and not patient centered. Any idea, system, or innovative product that seeks to disrupt the status quo is squashed, discredited, or killed outright.
18
If they really could achieve economies of scale it would work but they can’t. Especially if it is done through acquisition as typically they add fiefdoms and never consolidate.
4
That assumption of yours is probably false. Large hospitals take over small hospitals, and frequently make them less efficient by introducing additional layers of bureaucracy.
2
I have seen the degradation of medical care in and around New Haven area after Yale swooped in and started buying every medical practice.
Many doctors left because they had to submit to Yale requirements. Patients didn't have choice and the most vulnerable people suffered long wait times.
The medical records were all over the place when their systems were "transitioning". The techs complained, the staff complained.
Yale is technically not a monopoly but to a person living in New Haven who doesn't want to commute hours for medical care it is very much a chain around their neck.
16
Yup. The community hospital where I work had a stellar record in infection control for years - never penalized for excessive infections. We were gobbled up by a large medical system, who had been (and still is) penalized by Medicare year after year after year. Within a year of the takeover, the managers of infection prevention at our hospital were all gone, and, of course, replaced by the very people from "HQ" whose performance was so dubious. We are now under continuing pressure to "align" our policies and procedures to theirs to "standardize practice" and impose "brand consistency." It's all about billboards, Super Bowl commercials, stadium naming rights... quality? Ha.
55
Unfortunately, Mr. Kessler's insightful 21st century view of potential competition in health care is mired in a 20th century view of the medical marketplace -- one still ruled by the medical monopoly in most states. Information and communications technologies are not the only alternative to doctors (MD and DO). An impressive array of advanced practitioners (e.g. NP, CNM, DPT, PharmD, etc.) are at least as qualified as physicians in providing many of the health services that he would trust to a machine...but antiquated state medical practice acts prevent consumers in more than half of all states from having direct access to the qualified non-physician practitioners. As many of the comments on Mr. Kessler's piece rightly note, we still need a lot of professional guidance to deal with the complexities of human health. Framing the choice between doctors and technologies misses the far greater gains that will be possible when consumers in all states can choose between doctors and comparably qualified advanced practitioners who are free to work at their full scopes of professional practice without being controlled by doctors. (Note to Mr. Kessler: Send me your mailing address, and I'll send you a copy of my forthcoming book on the topic, "Not What the Doctor Ordered.")
4
@Jeff Bauer, there is no good data to support the claim that a non physician can provide equal care to that of a physician. Beyond the poor methodologies employed in studies that assert these claims, using a simple outcome measure such as a blood pressure reading or an A1C to make the argument for unsupervised practice is bad logic and has set a dangerous precedent around the country for patients. Non physician providers, just like emerging technologies, are extremely helpful but they are no substitute for the residency trained and boarded physician. While these roles were designed to aid the physician and to act as extenders in rural areas by the ACA, they were never intended to replace the physician. Unfortunately, there are several health systems where patients must now demand to be seen by the physician instead of the non physician provider, and frankly, a lot of patients are fed up, and rightfully so. As demonstrated by this very article, the behemoth health systems in the USA (the majority run by MBAs and not MDs) do not result in better outcomes for patients and replacing the physician with a non physician is not likely to help those outcomes either.
52
@Jeff Bauer, you are neglecting to notice that for at least a generation hospital administrators have been pushing to lower requirements for non physician personnel in order to make them cheaper. What is a nurse, even an RN, today? My engineer son was forced by his university to retake a biology class when they discovered he had accidentally taken one intended for nurses-too “dumbed down”. I have talked to several young women nurses boasting of “master’s degrees” who seemed barely literate. I’m sure hospital administrations find that they work cheaply enough! Even when you do find a nurse of good education and skill, she will not do anything without the supervising doctor’s approval. Another months-long wait for an appointment. You are wrong to say this situation is just as good as seeing an MD/DO. I’m pretty sure you just mean “cheaper.”
7
My wife has precepted dozens of nursing and mid level students and win multiple awards for doing so. Her observations and opinions? The PAs are generally smarter than the NPs. There’s at least one NP program we know of that is little more than a diploma mill. The general quality of students has declined over the last ten years. She’s decided to stop training mid levels next year and concentrate solely on teaching senior medical students.
6
When the hospital I went to school at and worked as a Registered Nurse for 20 years, St Vincent’s Hospital in Greenwich Village, merged with other struggling Catholic-run hospitals like Mary Immaculate and St John’s, it closed, they closed, and the ones who made money were the highly paid revolving-door executives, the highly-paid one-after-another consultants, and the Diocese, which sold out SVH and its community and pocketed hundreds of millions by selling the land the hospital inhabited. The dollar signs won, the people and the healthcare workers lost. There are wealthy condos there now. We were all ripped off.
48
@Pietro Allar What is so offensive about the situation you described is that SVH land and building was built mostly on donations. People donate to hospitals in service to their communities, yet parts of the hospital are for profit? Or can be later sold for a profit? I know it's a little more complicated than that, but not by much when you really think about it.
26
And now the people who have heart attacks in greenwich village have to take a longer ride in an ambulance to get to NYU, or wherever, for treatment, so the MDs who see them ultimately are at an instant disadvantage. The patient and communities are the losers. Beth Israel is closing too.
5
As a physician myself, I have no say whatsoever how healthcare runs these days. I go to work, see patients, operate, document all day long, take my salary and watch middlemen make all the money off patients and doctors both. I am saving like crazy to retire before I hit 50. May be I can work as a plumber then no one will criticize me for asking extra if I have to operate at 1AM. Meanwhile I am taking myself off emergency call schedule.
71
This is not a "lightbulb going on" revelation. The private side of the healthcare system moves more towards monopoly or at minimum oligopoly and the cost goes up while quality of service goes down. This is Econ 101 as I recall.
29
Jim Hinton, Baylor Scott & White’s chief executive, told The Wall Street Journal that “the end, the more important end, is to improve care.”
Yeah, and if you believe that I have a bridge to sell you.
Do you really think these execs are going to say "we want to consolidate to reduce competition and raise prices?"
Of course that's what actually happens. Nobody is doing this better than Sutter Health out here in CA. As the NY Times reported a few years back “Sutter is a leader — a pioneer — in figuring out how to amass market power to raise prices and decrease competition,” said Glenn Melnick, a professor of health economics at the University of Southern California.
39
Good piece. Just as mega-mergers of publicly-held corporations generally destroy shareholder value, mergers of big hospital systems undermine patient care. The economies of scale and synergies they promise pre-merger rarely, if ever, materialize in either case. The one and only reason big hospitals merge is to increase the already outrageous compensation of CEOs and other top executives. So-called "nonprofit" hospitals are nothing but cash machines for the "suits." One retired health insurance exec once described hospital CEOs as "guys who couldn't make partner at third-string accounting firms."
35
@Phil Zweig
When approximately 17% of GDP is flowing through the health care industry you have a system that is like honey (read money) attracting bees. Bees are the Wall Street financial types, financiers, venture capitalists, brokers, consultants, wanna be masters of the universe, etc., etc. What do you expect? Follow the money! If you want to see improvement in quality and cost, the health care system needs to change, which at present, although not ideal, looks like some variation of allowing anyone to buy into Medicare.
21
Exactly. You want to reform the system? Pass a law stating that no healthcare entity accepting money from CMS can pay an administrator more than 300% than it pays its lowest paid physician.
5
"For many goods and services, Americans are comfortable with the idea that competition leads to lower prices and better quality. But we often think of health care as different — that it somehow shouldn’t be “market based.”
Your life does not depend on most other goods and services. Let the "market" sort out laundry detergent and SUVs, but not access to health care.
27
@Pat
It would be very easy for the market to sort out health care both in terms of cost and quality. The individual patient simply has to pay out of pocket. The trick then becomes access as Pat points out. Access is sorted out by a single payer back up plan geared to income and funded at a national level which kicks in to pick up costs before the out of pocket crosses the line from "ouch" to "bankrupcy" Then you have both, a real marketplace and universal access to care irrespective of employment or income. Also no need for quasi-monopoly health insurance companies and then hospital mergers only work if they in fact do drop prices and increase quality.
12
@MikeZ
Excellent point about paying out of pocket.
Ever notice that dentists can give an accurate price quote for any procedure, whereas a doctor or hospital cannot? That's because many people pay for dentistry out of pocket, and dental insurance for those who have it works differently than medical insurance. You cannot get an accurate price for medical procedures because everyone pays a different price depending on insurance or lack thereof. And of course it prevents price shopping.
41
@Pat trying to get an idea of costs for routine surgical procedures is like entering an alternate universe. We were told if we prepaid our share of a minor surgery for DH that we'd get a 10% discount from the hospital so I set out to get an idea of the total cost. I was treated like I was insane by my insurer and the same hospital offering the discount. NOBODY would tell me anything! All I wanted was to prepay our deductible but it was nearly impossible. It took over a week to be told a super high inflated figure. The final actual cost was less than half what was estimated to us. Clearly someone just punted a number at me to shut me up. An exercise in futility.
5
Depending on the day, a majority of Americans will favor competition in healthcare, or favor cooperation in healthcare.
2
My local medical mill in Brooklyn was swallowed a couple of years ago by the NYU Langone behemoth. The most striking change was that there was no longer a square inch anywhere that was not occupied by a screen, and everyone there from technicians to doctors spent most of their time facing those screens and away from me. NYU is letting a goldmine slip through their fingers by not selling advertising space on the backsides of their employees, because that is what I spent most of my time staring at, while they all performed data entry.
There's a line from Groucho Marx in "A Night at the Opera": “When I invite a woman to dinner, I expect her to look at my face. That's the price she has to pay.” Well, looking at my face is the price my doctor should have to pay.
82
@Stan Continople I can't speak for the other health fields e.g. nursing for one, but speaking as an MD I can tell you that the docs aren't happy with the screen time required, any more than they are with the electronic records, "paperwork" generated, and having to toe the line with administrative policy on how many patients to see and for how long and what to charge.
It reminds me of my vet telling me, inadvertently, that they had to get the fees up to X dollars/hour by dictate of the veterinary conglomerate that took them over. Some vets left and some retired.
Same thing for the "people" docs now and the good ones try to go elsewhere and start on their own. It will be a tough slog and with non competition clauses written into their contracts the closest move has been 50 miles from me.
BTW I billed the same amount for any given procedure to all the insurance companies I dealt with. What they paid for the same procedure was wildly disparate and I never knew just what I would get. So even the docs aren't privy to the pricing nonsense.
PS One used to be able to give courtesy, or give away your time ie reduce or erase your fee for hardship patients and the docs I knew did this. Not permitted now, not under this system.
17
@Sza-Sza
To your point, the insurance company fee schedules are completely opaque. The only way to find out what you are being paid is to employ billing companies with the capabillty to retrospectively analyse your reimbursement data. The truth of the matter is that in our system, the legislators which determine health care policy are bought and paid for by the large lobbies of the insurance, pharmaceutical and hospital industries.
14
We have seen formerly independent medical practices being bought up by hospitals so that all of the specialist diagnosis, specialized treatments and even home care are being made to affiliated staff. When a personal physician sends a patient to another specialist, it is most likely to be to the practices associated with the same hospital - good or incompetent.
Having experienced this several times we learned it is much more important for family members and patients to spend the time researching who can provide the best outcomes. Not easy to do and impossible when in a emergency situation.
32
First, I agree that consolidation for supposed efficiencies is nearly always detrimental to the delivery of health care to the whole population. Access in time and distance is harmed.
There much confusion over cause and effect when talking about competition in health care. Hospitals do not compete like grocery stores. They now buy from oligopolies or monopolies for everything from drugs to intravenous solution and sell in controlled markets. In addition, prices are not obvious, and the most recent law doesn’t make that much better since you still don’t know what United Health, Blue Cross, or others actually pay for the service. The person being treated is hardly the consumer, they have great barriers to information and changing their supplier (3rd party payer).
Those hypothetical 5 cardiology groups are probably mostly compensated by 3 sources—who will set them off against each other in the local market on price alone. United Health, the Blues, and CMS say they want quality, but they mostly want low price.
So, where there is the ability for groups to compete on quality, service, and availability, don’t allow domination for the argument of efficiency. And remember, every time a rural hospital closes, it may be a 100 miles to the next hospital, and even if that small hospital did not provide comprehensive service, we need to promote quality and allow those hospitals and the providers that go with them to remain available to large swaths of our country.
9
I don't believe that profit ought to be in our health care system at all but since it is for now I have to agree from personal experience that competition breeds better care. I was a mid-level (director) in a hospital system in Southern California that merged with another system in the early 90's. Two hospitals just a few miles apart in the San Fernando Valley had each been owned by its rival and then we're part of one system. Some of the consequences were to be expected, layoffs for duplicate jobs, determination of which markets the two were going to invest, etc. What struck me was that suddenly the need to push for excellence in those markets decreased since we "owned" the markets. I truly believe that the patient and their care should be the primary concern but too often financial considerations pre-empt excellence of care. From which syringes are used to how long a patient stays in the hospital, it's all about expense. Not to say that the decision makers weren't conscientious, they were but the final choice always came down to price. I can't wait to see what we can accomplish from higher healthy births to more patient focused therapies once price is not the final decider.
19
Follow the money. Hospital and medical practice mergers and takeovers are a byproduct of the tax code. This happens all the time in business as firms organize in the form that has the most advantageous tax treatment. Many years ago, there were tax benefits to small, community hospitals whose primary owners were physicians. They sprang up all over the place. A few years alter when they tax code changed and the benefits were lost, they closed up before the ink on the bill had dried.
9
There is a major and alarming merger trend that definitely degrades care. Catholic hospitals are buying up non-religious hospitals all over the nation. Catholic hospitals refuse to provide many medically necessary services to women and men. The laws must be changed to require all hospitals to provide all legal and medically necessary care, from abortion to sterilization. If you live in a community with only one Catholic hospital , your life and your end-of-life care are both at risk. http://static1.1.sqspcdn.com/static/f/816571/27061007/1465224862580/MW_Update-2016-MiscarrOfMedicine-report.pdf?token=ygYboaGVX6HuLZ3SY7GdDysjYV0%3D
71
Repeatedly, we're told the mergers of health care organizations is a good thing for patients. In most cases, the opposite is true.
When there's less competition, inevitably, the patient suffers.
Speaking from recent experience and having a Medicare Advantage HMO plan, I can attest to both an excellent level of care, and the limiting of services available to me.
I'm healthy and therefore can look critically at what our very broken health care system can offer me. My greatest fear is what will happen when my health starts to falter and the limitations of our current system both kick in and kick me in my sorry backside.
When avarice is the driving force behind our health care system, no one will receive the best care available to them.
15
It was a big mistake to allow hospitals to become health care providers. Hospitals used to be ancillary service providers competing for the business of doctors in the community. Provide better service = doctors bring their patients to you. By vacuuming up medical practices and employing doctors. hospitals have become monopolists with all the problems you would predict that brings.
Equalize the site of service differential (look it up) and we'll start to see health care service quality shift back in favor of the patient. Better still, make hospital employment of medical doctors illegal.
47
@Scott
welcome to Amerika. It's all about the benjamin's and not about the patient.
1
Human healthcare head quartered in Louisville, KY was going to be bought out by Athena and good thing the justice Department prevented that from happening. Both Humana and Aethna are currently thriving. In Louisvile Jewish Hospital, the best of the hospitals is running at a loss and so far no one ready to take it over. Most of the times Hospital mergers are necessary to keep the hospitals financially viable. It is a tough business.
4
America is a farm. The citizens are the animals to be milked and bled and slaughtered for the profit of the corporations and the rich. The politicians are paid by the corporations and the rich to make sure the animals stay in their places and obey.
100
@William
Ain't that the truth!
1
@William This is the truth underlying nearly every major problem in our country, and increasingly, the world. In short, capitalism is immoral. inhumane, and unsustainable. Since it controls the media & the education system (indeed all institutions), it will probably require a complete system collapse before a majority of the surviving (if there are any) humans figure it out.
2
The notion that consolidation in healthcare leads to better outcomes is a myth that should have died long ago. These large health systems are run by MBA suits with concern only for the bottom line. In most health systems the numbers of mid-management administrative personnel have risen exponentially, while the numbers of nurses and others with direct patient contact have remained steady or fallen. Services which pay poorly, such as skilled nursing or mental health are abandoned or scaled back while glitzy things like laparoscopic surgery, which usually pays well, are heavily promoted.
There is constant pressure on hospital CEOs to increase market share.
Decisions are made based on what is best for the system as a whole with little regard for the effects on local communities. As a result, in a rural state like Iowa, there is unnecessary duplication of services while significantly reducing other services. Iowa has a chronic shortage of mental health inpatient beds. Womens reproductive services have also been severely curtailed in recent years. But bariatric surgery and joint replacements are available at some rural hospitals less than 30 miles from major medical centers. None of this makes sense but it does contribute to the bottom line. Which is all that matters to the suits.
Most of the health system marketing you see on TV says that it is all about you. Don't believe it.
148
@dw kabel MD
I couldn't have said it better! Having worked for the corporation that claims that it's "point" is "you," I can say without reservation that its only point is MONEY. My field is mental health, which they constantly reminded me was "a money-loser," for which I was to compensate by churning patients through as if on a conveyor belt. And when I would not automatically recommend bariatric surgery for heavy patients I evaluated, those patients were shunted to a different person for more perfunctory assessments. I argued against moving the clinic to fancier and more expensive space that resembled a luxury hotel. I asked how they could conscience doing that when many of my patients had trouble affording their co-pays. Their answer: I was invited to work elsewhere if I didn't want to be a "team player." I did. I'm now in private practice.
80
@dw kabel MD
Doctor, you've nailed it.
Having recently been in the hospital for the first time in 27 years, what I both witnessed and endured is nothing short of disturbing.
Nurse after nurse told me they were understaffed and overworked to the point of insanity. One nurse was responsible for 32 patients on my floor. She didn't have time to take a lunch break or go to the restroom, much less provide each patient with adequate care.
Patients are merely pawns in this health care scheme. We're cash cows and our health outcome is of no real importance to the mid-management bean counters. who wield the real decision-making power.
We aren't providing doctors, or nurses with the correct environment in which to care for their patients. It's time to wrest control from those who seek to profit from our care.
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@ARNP Health care should not be an industry. All those suits don't have backgrounds in medicine; they are businessmen and women. From what I read, they take large salaries. There is a possible merger of two local hospitals which has those of us on a large plan worried about access to the possible new location. When you get older, it is harder to drive to a further-away place, but the thought does occur that older patients aren't money-makers. This article and its comments are disturbing.
1
Nearly everyone who commented has the same transparent cynicism about corporate health. Even in small rural hospitals in NM, Big isn't better. The kernel of truth is very simple: money talks, and patients and docs walk. Everything-productivity, benefits, technology and maintenance costs, equipment, denial of even basic referrals being denied- comes under the gun of "cost control." which means we want more profit. And it is not just in hospital care; clinics (where the providers are owned by corporate) and nursing homes (also corporate) are shrinking or closing. Congress better get moving on solving a very complicated issue or we will all be without access to what should be a basic right. Start now because this will take many years to get it working efficiently. ACA was a start, but now we gotta start over- foolish beyond words.
17
How foolish, health is not related to a hospital. in fact when you are healthy you never see a hospital. Even those of us with fair to poor health don't see the hospital often. Now perhaps care would be cheaper or somewhat better but that is not health.
4
Small, large, and huge mergers have one outstanding effect, longer wait times when making an appointment. Kafkaesque appointment systems put in place without regard for quality, but efficient at keeping the schedulers occupied and patients on hold for the required time. The algorithm works, and the bigger the better.
12
@Paul I've had a PCP for years. Recently this two-doctor practice joined Privia Medical Group, and everything changed. You have to schedule a physical 9 months in advance, because the doctors are, I'm guessing, limited in how many they can do, because the reimbursement is probably much lower than for other visits that could fill the appointment. Heaven forbid you can't make that date when the time comes. Moved to electronic health records, which is good, but you can have only one pharmacy to submit scrips to. As a patient with a HDHP, I have to shop around for the best prices on two maintenance medications. Using just one pharmacy would cost me more than $100 more a month.
I recently tried to schedule a cholesterol screening under ACA preventive services and was told that unless I had it done during my annual physical, it would be billed as an office visit and cost me close to $185 for something that should be free, because Privia dictates they can't use preventive services codes outside of physicals. The front desk receptionist made it sound like this was written in stone and handed down on a tablet. No, your practice has now put profits over patients.
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Unfortunately this is not happening only to hospitals. In my area, small medical practices are almost non existent. There are two major practices, one owned by Atlantic Health (which also owns at least four local hospitals) the other Summit Medical Group. They both continue to buy smaller medical practices, virtually eliminating competition. Not surprising the quality of care has gone down.
These practices then market themselves as continuity of care practices, all specialties under one roof, with their hospitalist in local hospitals. On paper that sounds wonderful, but the reality doesn't even come close.
There is little communication among the different specialties, including or maybe especially the hospitalists.
I recently encountered a physician at SMG who told me he was simply a cog in the system, to go to the C Levels. Never expected to hear that out of a physicians mouth.
The lack of communication results in haphazard care and missed diagnosis. The results are inappropriate treatment and/or death.
23
@Jackie Patient Advo
You’re spot on. I encourage you to join the NJ Doctor-Patient Alliance at www.doctorpatientalliance.org
We are a grass roots org. of providers and patients whose primary goal is the preservation of the independent physician and access to quality affordable care where YOU the patient and WE the doctors have control of your care. We are the doctors who refuse to be ‘cogs’
19
The opportunity for competition by providers on quality is greatest under a single payer system like Canada’s. Patients can see any doctor or go to any hospital in the country; patients are not constrained by networks. Although economists might complain there is not enough “quality data” available to patients to choose, there is no accurate way of measuring quality as yet that doesn’t discriminate against providers who see sicker patients (r.g. in heart surgery outcomes).
It seems like Frakt should have mentioned the superiority of single payer in regards to provider competition. I agree with the previous post that he should have mentioned single-payer’s much lower cost as well.
28
How many mergers have all of us endured that promise economies of scale and efficiencies? It is corporate speak for staff cut backs and effectively forming monopolies. 800 number call centers located far from the consumer, outsourcing, product lines decisions made in board rooms based in the bottom line. Many others took our jobs, community spirit, this takes our health. Need to revisit Schumacher’s “Small is Beautiful”; technology should made it more efficient for independent, small businesses.
24
Any scheme that puts shareholder or partner profit ahead of human health is a scam. The Big Pharma drugs for obscene profit shamefulness has shown this beyond a reasonable doubt.
Predatory Capitalism is not the way to better healthcare; it is opposite.
30
Professor Frakt admits that in Medicare or the British National Health Service, "competition is a valuable tool that can drive health care toward greater value."
What he leaves out of his essay is that the British system is socialized medicine. Every doctor, nurse, surgeon and administrator working in that system is a government employee. Indeed, that system, the so-called "Beveridge system" (named for William Beveridge, the driving force behind its founding 70 years ago), is used in Portugal, Spain, and Italy in addition to Britain. And that system delivers better healthcare at half the per capita costs of the American for-profit system.
Perhaps Professor Frakt can now point out how disastrously expensive the American for-profit system is, and that he would strongly recommend that America adopt the British system.
No need for him to pull his punches. Just tell the truth.
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@Sean No matter how you measure the effectivenss of health care syatems,, the five best countries are
All Scandinavian, and all with some form of socialized care for all. Taxes are high, but that is the cost of care that we in the USA pay anyway- just not called taxes.
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I suggest that in future writings on this topic you address the total capitalization packages of the senior executives who are part of these merger transactions. You will find this to be the key driver why these are happening under the guise of better healthcare for all. Think about it I’m a CEO of a health system generating X amount in revenue and now by merging I’m now responsible for a health system that is now X 2 in size. Suddenly I’m worth more money! Again any improvement in healthcare for their clients is ancillary.
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Mergers outside of big pharmaceutical and HMO companies can be good but in the medical industry it is just a by product of our de facto criminal health care system where the wealth of the billionaire is put over the well being of the citizen.
Let's go over it again. Join the rest of nearly all our peer countries and get a national, affordable, quality, universal health care system with gov't oversight re prices.
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An even bigger problem is insurance companies being allowed to own hospitals and medical practices. This should be illegal. In small cities where a single hospital is dominant, patients have no choice but to either change insurance companies or pay out-of-network prices.
I would like to see the NY Times do an investigation into this very shady practice. If an example is needed, a good one is Health First in the Melbourne region of Florida.
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If you want to find out why quality is not what it should be, ask the people who work there. Where I worked before retirement, a large, distantly located, corporate entity took over the hospital. The last thing they have any interest in is employee suggestions or opinions. When the employees are just following orders, don't expect the patient to have that warm, fuzzy feeling about the institution providing treatment. The treatment model is to provide individual care to the patient. The employer model is to treat all employees like a piece of furniture. There are all sorts of methods and training used to get employees to focus on the patient as the center of care. But above the hands on employee level, that philosophy grinds to a halt in terms of how the employer treats the employee. Another case of "Do as we say, not as we do". Tough to make improvements in quality with that level of hypocrisy.
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@walking man
Employees to these people (management) are nothing more than a line item on an expense sheet.
1
Consolidation of providers is another consequence, intended or not, of the ACA. Hospitals merged and bought physician practices. Different incentives to health care provision evolved - patient quotas (or limits) for physicians, procedure volume (if you're not growing you're dying) for health care systems, and quality metrics. Cost incentives were thought to result. Everybody gets a haircut including Pharma, Insurers and Health Systems, remember?
Effort is being made to improve health. Medicare rewards outcomes through their star program. Other payers have outcome and wellness incentives as well. AI and Analytics arrows are in everyone's quiver these days.
Cost management needs more attention. Cleveland Clinic claims more heart surgeries and best in class care but have cost decreased with all that know how?
Perhaps policy at the DRG level of change could effect real changes to cost.
7
I wonder what role the payment systems play in changes in outcomes. Patients who have HMOs or Medicare Advantage plans with a limited number of in-plan physicians have less opportunity to switch doctor. That may be an issue. For example, a few years ago I saw a dermatologist whose office was an assembly line. He was also running the meter. For an older adult like me with sun-damaged skin, he would appear in the room with his frozen nitrogen spray can in hand, spray a few spots and tell me to return in a month. This would go on for 3-4 months (each visit the same, each a separate charge to the insurer & co-pay for me). Prior to that time (and since) dermatologists generally looked me over 1st, sprayed what was needed and told me to return in 6 months, i.e., one visit. There is more that was bad practice, but I at least had the option to find someone else.
So, the question is whether the larger practices are more likely to get the contract with local HMOs/Advantage plans leaving patients no option but to get their care there.
I also wonder what role the general public's lack of medical knowledge plays.
Do people focus on how soon they can get an appointment (likely to be sooner in a large practice)? Do they focus on things like wait time (that less-than-stellar dermatologist ran a rapid, efficient practice with quick in and out, though I heard patients complain that they had questions they didn't get a chance to ask)?
10
Health care is a business like any other business. Income and profits are all that matter. If they can monopolize the health care dollars in a region, all the better. If maximizing profits means a loss of quality, so be it. BTW, most of these behemoths also run HMO based health insurance and Medicare Advantage plans, further locking people into their "networks".
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@Ellwood Nonnemacher
But health care absolutely should not be a business "like any other." It's a right in most countries, not a for-profit product to be sold with the highest profit margin. Of the advanced countries, only America permits health care industry participants to treat their services and products as products that first and foremost are designed to maximize profit margins.
Only in America. Let's see Upshot columnists admit that, and begin offering alternatives.
38
A reminder that the movement toward health care reform was motivated in large part by "fragmentation" in the industry (many small practices and facilities), and that consolidation was considered the "solution", the larger size allowing providers greater access to the most advanced technologies and techniques.
5