Editor’s note: This commentary is by Tim Ashe, a Democrat/Progressive who represents Chittenden County in the Vermont Senate.
[I] thought Hamilton Davis’ dramatic defense of the health care reform status quo was a humor piece (Feb. 23, 2016), coming as it did the same day VTDigger reported that Vermont hospitals collected $49.2 million more than budgeted.
The inspiration for Mr. Davis’ overblown missive was a bill I introduced with a Senate colleague that does three commonsense things.
First, it requires hospitals to report to regulators which physician practices they purchase on an annual basis. This information will both inform the coordinating work of the Green Mountain Care Board and allow state consumer watchdogs to ensure that such acquisitions do not create an anti-competitive environment resulting in inflated prices.
These three provisions … combine to shine a light on one small piece of the Vermont health care pie — the slow disappearing act of independent physician practices.
Second, the bill requires that patients be made aware of impending mergers or acquisitions and the potential cost implications. Harvard Medical School researchers found that outpatient payments increased an average of $75 per person for all patients as a direct result of hospitals purchasing independent physician practices in a study of 240 U.S. metropolitan areas, including Burlington. For the patients who actually visit those newly acquired physician practices? Increased payments to the tune of $1,400 per patient per year. Patients and consumers should be provided this information before a purchase occurs so they can make choices appropriate for them and their families.
Third, the bill requires state health care officials to research the cost implications of hospitals purchasing physician practices in Vermont over the last five years. It is believed that when an independent practice is purchased by an academic medical center, the practice is immediately, and without any change in behavior or facility, reimbursed at much higher rates. So the system gets more costly without an increase in value to the patient.
These three provisions, as you can see, hardly constitute radical thinking. They combine to shine a light on one small piece of the Vermont health care pie — the slow disappearing act of independent physician practices.
Why should we care? Independent physician practices frequently perform health services at lower costs than their hospital counterparts. They are also reimbursed less (frequently much less) by commercial insurers. As they are purchased by the larger hospitals, system costs go up. This has been occurring in the absence of any policy justification. Yet the financial consequence for Vermonters is very real.
So why the excitement from Mr. Davis? Well, some consider Mr. Davis to be something of a consigliere for the Shumlin health care team’s top leaders these last six years. His message — everything is OK, trust the high-paid consultants, stay out of the way.
In any other industry, Mr. Davis’ promotional writing would be viewed as upside-down, but the consultant-pundit class in health care suggests we need to inflate system costs in order to lower them. Let me know when you figure that one out!
