May 21, 2023

Corporations Acquiring Primary Care Facilities Could Lead to Higher Prices and Less Care for Patients

New and Noteworthy from The New York Times, original article by Reed Abelson

It comes as no surprise that the scarcity of primary care physicians, who are vital to Americans' health, is getting worse.

They work in one of medicine's least glamorous and lowest compensated areas and most of them are overworked, seeing up to 30 patients every day.

Why then do multibillion dollar corporations, in particular massive health insurers, keep buying up primary care practices? With its huge pharmacy business and ownership of the major insurer Aetna, CVS Health paid almost $11 billion to acquire Oak Street Health, a rapidly expanding chain of primary care facilities with doctors working in 21 states. Another example is Amazon's aggressive $4 billion purchase of One Medical, a significant doctor's group.

The appeal is straightforward: Despite their humble position, primary care physicians control large populations of patients who generate revenue and profits for hospital systems, health insurers, or pharmacies looking to expand their operations.

Additionally, Medicare's rapid privatization means that more than half of its 60 million beneficiaries have enrolled in policies with private insurers under the Medicare Advantage program. Medicare is a federal health insurance program for senior citizens. These insurers are now receiving $400 billion from the federal government each year.

“That’s the big pot of money everyone is aiming at,” said Erin C. Fuse Brown, director of the Center for Law, Health & Society at Georgia State University, and an author of a New England Journal of Medicine article about corporate investment in primary care. “It’s a one-stop shop for all your health care dollars,” she said.

Many doctors say they are becoming mere employees. “We’ve seen this loss of autonomy,” said Dr. Dan Moore, who recently decided to start his own practice in Henrico, Va., to have more say in caring for his patients. “You don’t become a physician to spend an average of seven minutes with a patient,” he said.

The acquisition of medical practices is a component of a massive, accelerating medical care industry consolidation that places patients in the care of an ever-dwindling number of large corporations or hospital groupings. Through ownership of large drugstore chains or pharmacy benefit managers, many already served as the patients' insurers and had control over the distribution of medications. A recent analysis by the Physicians Advocacy Institute found that today, nearly seven out of ten physicians work for either a hospital or a corporation.

However, some experts warn that the consolidation may result in higher pricing and systems that are driven by the pursuit of profits rather than the wellbeing of patients. The companies claim that these new arrangements will result in better, more coordinated treatment for consumers.

Senator Elizabeth Warren, a Democrat from Massachusetts, is encouraging the Federal Trade Commission to look more closely at some of these sizable transactions that haven't yet been stopped by authorities due to antitrust concerns. “I fear that the acquisition of thousands of independent providers by a few massive health care mega-conglomerates could reduce competition on a local or national basis, hurting patients and increasing health care costs,” she wrote to regulators in March.

Experts also caution against corporate management's attempt to control expenses through complex procedures that require patients to obtain prior authorization for care.

It may be too soon to determine whether consolidated care will improve patients’ health. “So far, when you look across the industry, the record of these acquisitions has been mixed,” said Dr. Sachin H. Jain, the chief executive of SCAN Group, a nonprofit based in Long Beach, Calif., that offers Medicare Advantage plans.

Additionally, despite recent data showing a decline in the number of medical school graduates entering the medical field, investments may not be able to stop the rapid decline of the doctor that so many people still seek out for routine treatment.

“We’re dealing with incredible levels of burnout within the profession,” said Dr. Max Cohen, who practices near Portland, Ore. Since the pandemic, his low-income patients have become much sicker, he said, with the level of illness “through the roof.”

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New York Times Article:

https://www.nytimes.com/2023/05/08/health/primary-care-doctors-consolidation.html

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