This commentary is by Peter Wilhelm, M.D., a family doctor at Middlebury Family Health, and a board member of Health First, Vermont’s independent practice association, representing health care practitioners working at physician-owned practices throughout the state.
As many recent contributors have pointed out, Vermonters have seen significant increases in health care costs in the last few years, not only in the “sticker price” for doctor’s visits, tests and procedures, but also dramatic increases in insurance premiums, co-payments and other out-of-pocket costs.
Per recent data from the Green Mountain Care Board, Vermont’s per capita price tag for health care has increased in recent years, and continued growth in health care costs is expected. Meanwhile, access to primary care has declined, and timely scheduling with medical specialists is under scrutiny by the Vermont Agency of Human Services, the Green Mountain Care Board, and the Department of Financial Regulation.
Vermont’s accountable care organization, OneCare Vermont, whose stated goals are “to improve the health of Vermonters and lower health care costs,” has not improved access, quality or cost in any significant way. Recent posts by Patrick Flood and Richard Slusky, among others, enumerate the many issues with OneCare, and I would encourage readers to review those posts.
I contend that two major drivers of increased cost, declining access to primary and specialist care, and declining quality are the following:
1) Hospital consolidation.
2) Lack of meaningful support to independent medical practices.
President Biden’s administration recently released the Presidential Executive Order on Promoting Competition in the American Economy (July 9, 2021), and made the following bold statement, “Americans are paying too much for prescription drugs and health care services — far more than the prices paid in other countries. Hospital consolidation has left many areas, particularly rural communities, with inadequate or more expensive health care options.”
How is hospital consolidation exacerbating the problems Vermonters face with health care? Large hospital-based systems, such as the University of Vermont Health Network, eliminate competition and siphon health care dollars that could be allocated to lower-cost independent practices.
Not surprisingly, multiple research studies have shown that when hospitals buy independent doctors’ practices, health care costs increase significantly. Everyone pays. Patients pay more out of pocket, workers pay higher insurance premiums, and taxpayers pay more to fund programs like Medicare and Medicaid.
When you see a hospital-employed provider, the hospital charges hospital rates for that provider, which are almost always higher than independent practice rates. Hospitals typically tack on “facility fees” — which add no value but increase the cost of treatment. According to Douglas Hoffer, Vermont state auditor, the “facility fees” charged by hospital-owned physician groups account for 45% of the increase in prices as compared to charges from independent practices.
For example, consider two common visits you might have with your primary care provider. A 15-minute office visit at a local independent practice would cost you an average of $111, but would cost $165 at your local academic medical center. Likewise, a 25-minute office visit would cost $205 with that independent practice, but $298 at the medical center.
Therefore you would pay almost 1½ times more for these visits if you got them from a provider whose practice was part of the local hospital network. The same is true for lab tests and specialty services, and often the differences are much larger.
There are other tangible benefits to seeing your local independent health care provider. Because my practice is independent, I’m not beholden to any hospital network. If I can’t refer a patient to a local provider, or if the UVM Medical Center specialists are unavailable in a timely fashion, I can simply refer to other providers in different networks such as Rutland Regional Medical Center or Dartmouth-Hitchcock.
Preferably, in many cases, I can avoid large medical centers altogether by referring to independent specialists or surgical centers in Vermont where I’m confident the costs to the patient will be lower and quality is comparable or better. If laboratory or radiological studies are too costly at my local hospital (Porter Medical Center), I can order those studies at other locations such as Quest Diagnostics, Vermont Open MRI, or After Hours Imaging.
Unlike my colleagues in hospital-owned practices, who are overworked and most often undercompensated, I enjoy the benefits of ownership and autonomy. My partners and I can dictate how many patients we see in a day, how patients are cared for from check-in to checkout, and we can change policies and strategies on a dime (as our recent Covid pandemic has required).
Seeing lower numbers of patients can certainly result in lower compensation, but we get to decide if trading the stress for job satisfaction and better patient care is worth it (hint, it is). Patient (customer) satisfaction is our direct responsibility, not that of some administrator who is sitting in an office. The buck stops with us, literally.
Another factor to consider is that independent practices are small businesses that support their communities. They provide jobs and pay taxes. When a nonprofit hospital buys these practices, the taxes the independent practice used to pay into the community go away. That’s because these tax-exempt hospitals don’t pay income, property or sales taxes, so communities lose those funds that would otherwise go to pay for firefighters, police officers, teachers and roads.
Independent practices are essential for a high-functioning, high-quality, more efficient health care system. Seeing an independent provider is one of the best ways you can lower your medical costs, help your community, and get higher quality care.
Support for your independent health care providers, including primary care and subspecialties, will contribute to a healthier health care system. Encourage your state leaders to strengthen and expand lower-cost options for your health care.
