Editor’s note: This commentary is by Paul Rogers, M.D., who recently closed his family practice after 37 years in Johnson. He is a former board member of VermontHealthFirst, an independent physician group.
The intention of our antitrust laws is to preserve competition and prevent monopolies. Although a noble goal, one of the unintended consequences in health care is, paradoxically, enabling consolidation of hospitals and medical practices, with the subsequent loss of independent practices and the creation of health care monopolies. And this has resulted in rising health care costs and lower quality care.
As of 2010, only about 40% of Vermont physicians still worked independently. In another four years this number would drop to 24%, the ninth lowest in the U.S. One major reason for this loss is the lower payment for independent physicians. The antitrust laws, which were established to ensure competition, have been used by large medical centers and insurance companies to leverage consolidation and mergers.
The current antitrust laws do not stop large hospitals from absorbing smaller community hospitals or the smaller practices associated with them. As these larger entities continue to gain power and size, they have increasing ability to negotiate better payment rates with insurers. Further, the antitrust laws do not prevent large insurance companies from buying pharmacy chains, setting up medical practices within these pharmacies and thus controlling price rates and reimbursements.
On the other hand, independent physicians cannot legally group together to negotiate for better payment rates from insurers. Since independent practices are supposedly competing against each other for patients, this form of collective bargaining would violate the Sherman Antitrust law of 1890.
With no ability to negotiate contracts, small independent physician practices are given “take it or leave it” ultimatums from large insurance companies. This leads to even more practices being bought by ever enlarging health care corporations, and further perpetuates consolidation. And as Dr. John Brumstead, CEO of the University of Vermont Medical Center, states in his Nov. 20 VTDigger commentary, “areas that have not developed a collaborative system of care are learning the hard way that if providers are left as boats alone in the storm, the risks of closing programs or entire facilities become very real.” The fact that many physicians and patients do not wish to be absorbed is irrelevant, as is the fact that this “storm” is not a natural event but one created by unbalanced financial arrangements. And if the number of independent practices and hospitals shrink below a critical percentage, there may only be one enormous boat left.
The ever-increasing consolidation of corporate health care has created less patient choice, higher prices, less patient satisfaction, and according to several studies, poorer outcomes. The viability of the remaining independent practices would be strengthened by allowing them the right to negotiate collectively with the large insurers, or, alternatively, by restricting the ability of insurers to negotiate wildly different payments to providers. Physicians and patients together need to support legislation that slows the corporate takeover of medicine. The alternative is to risk losing any options in choosing how you receive your health care.
