Healthcare mega-mergers end up harming patients

Over recent years, we watched as large hospital systems grew even larger by merging with other hospitals and buying out doctors’ practices. In fact, in the U.S. in 2018, it is estimated that fewer than 30 percent of doctors remain in private practice.

While hospital executives will try to convince us this is an improvement in our current healthcare systems, are patients better off?

Hospitals and large medical systems are in a better position to negotiate contracts with insurance companies and vendors to get better reimbursements and lower costs. Considering their power to better haggle prices, it should be expected that they could offer medical services for lower costs. However, the reverse appears to hold true. In a study published in JAMA, researchers found the average total expenditures to be 10.3 percent higher in hospital owned practices and 19.8 percent higher in health system owned practices compared to physician-owned practices.

While patients seeing physicians in larger system are costing more for the same level of care, are they having better outcomes for the increased expenditures? It appears the answer is “no.” In one study published in Health Affairs, researchers looked at one metric of quality outcomes: “ambulatory care-sensitive admission rates”. The study found that smaller practices (those with one or two physicians_ had 33 percent lower admissions than larger practices (10-19 physicians). Other studies have also shown that smaller physician groups have lower admission rates than larger groups as well.

Perhaps, the most harmful result of these mega-mergers is the dissolution of the sacred doctor-patient relationship. Most doctors believe that this relationship is hurt when these consolidations occur. In fact, in a joint poll conducted by Physician’s Weekly and SERMO of over 1,000 U.S. physicians, approximately 76 percent feel these mergers negatively impact the doctor-patient relationship. Only 8 percent of those surveyed did not believe there was a negative impact.

When third-parties gain control of how doctors practice, along with surrendering administrative tasks, the doctor is not necessarily as free making medical decisions. As a doctor in private practice, for example, I know my patients, and can decide which patients should be sent to collections when they don’t pay their bills. In a large organization, this is largely done in an automated fashion, with the doctor having little say. Sometimes people lose a job or are taking care of a sick parent and need the benefit of the doubt. There are no exceptions in big business. Patients see this lack of care in the administration of office protocols and lose trust in their physicians.

Where lack of trust exists, clinical outcomes are affected. If a patient doesn’t trust me, why would they take a medication or do a procedure if I advise them it is the best course of action? If they look at me and see a big healthcare system functioning as a big business rather than just a doctor concerned about their health, they are going to question my medical recommendations. They may ask others who may give them good advice or perhaps they will seek out dubious sources who can lead them down the road to harm. Without trust in the doctor-patient relationship, the patients’ clinical condition is affected in a negative way.

In 2018, the trend of mergers and acquisitions is expected to continue. While it may be good for business, it does not appear to be so healthy for patients. Doctors who are self-employed are struggling financially to remain in private practice. Yet, the push is for larger and larger healthcare systems.