Connecticut’s big hospital systems are absorbing private practices and charging patients more
Private healthcare practices are finding financial and labor relief in large hospital systems. However, this leaves patients paying a higher cost for healthcare in a less personal setting.
WSHU’s Ebong Udoma spoke with CT Mirror’s Katy Golvala to discuss her article with David Altimari, “A quarter of CT doctors work for big hospitals. Is that good for patients?” as part of the collaborative podcast Long Story Short.
WSHU: Katy, what is happening with private practice?
KG: In short, it's basically disappearing. So currently, fewer than 50% of doctors work for private practices. Instead, what's happening is that many doctors are choosing to work for hospitals, or they're choosing to sell their private practices to hospitals, or they're working for big corporations, like insurers or private equity firms. So we're seeing a steep decline in the number of doctors that are working in independently-owned private practices.
WSHU: Why is this happening?
KG: You know, essentially, it's just gotten a lot harder to run a small independent practice. I mean, these basically function like small businesses. So if you think broadly about the issues, we're seeing the challenges that a small business faces, those are the issues that these small practices are facing. So essentially, it's getting much more complicated to deal with insurers. It's getting much more expensive to run a small private practice. And these big organizations are able to ask for a lot more money for the same level of care from insurers.
WSHU: And why is that beneficial to the doctors who were in private practice to now have this affiliation with a larger organization? How does that help the doctors out?
KG: Yeah, so the upside is that now they're part of, you know, a big health organization that can demand a bit more money for let's say, a patient who goes in with a strep throat. So they make more money off of a visit. And typically, what happens is that these large health systems will take over those tasks that make it so difficult to run a private practice day-to-day, like billing, like back office support. So basically, what we heard from, for example, one physician in the story, Dr. Kristie Schmidt, she said her income went up a little bit and the hassle factor went way down.
WSHU: And she's located in a rural part of the state, I believe her practice is right across the border in New York.
KG: That's right. She's located in Millerton, New York, which is about a one-minute drive from the Connecticut border. And she's concerned that basically, as these business interests become a bigger part of health care, what happens to providing health care in ways that may not be the most profitable. So for example, providing health care in rural areas.
WSHU: So the question you were asking in this story, is that good for patients?
KG: So independent research quite broadly shows that as more doctors leave private practice, to further concentrate into these big systems, prices go up for patients. So from a price perspective, we're facing higher prices. What tends to happen is that they use their increased market power to demand higher rates from insurance companies, and the insurance companies are not absorbing that, they are passing it on through increased premiums to their patients.
WSHU: Now, have you talked to these large practice groups? Especially I think the largest must be Yale New Haven Health, which has almost 3,000 physicians. Have you talked to them? And you know, what's their response?
KG: Yeah, you know, we reached out to all major health systems in the state for comment, we got some thoughtful comments back from Yale, New Haven and Hartford healthcare, as well as Trinity. And I think the first claim is that systems are able to provide more comprehensive, more efficient, more connected care for patients.
So let's say, you know, you go into your primary care provider, they realize that you need to go see a cardiologist, the cardiologist realizes that you need heart surgery. If they're within one health system, they can quickly refer you to other specialists within the healthcare system. All of those doctors will have your medical records and this is very, you know, what they describe as a very seamless process. You know, they also make claims that this improves care for patients, although there actually hasn't been much research done on what the impact of this consolidation is on quality. So we can't say for sure whether or not those things are true.
Another claim is that commercially insured patients are seeing pricing increases, because the government continues to lower the amount that it pays for Medicare and Medicaid patients, which is an interesting claim. And, you know, you would need a team of PhDs and health economists to prove it for one particular hospital system. But on the whole, research has shown that this phenomenon of cost shifting, so increasing prices for commercially insured patients, when the amount paid for government programs goes down is not actually very broadly documented at all right.
WSHU: Let's get back to Dr. Schmidt. How has her practice changed? And what's going on with her right now? Does she feel satisfied with what's going on and how her practice has changed since joining a large group?
KG: So Dr. Schmidt's physical practice has not changed very much; she actually practices at the same quaint, cozy barn that she opened in 1999, which is amazing. And she's been seeing some patients for so long that she considers them family. I think what she is concerned about is that she knows her patients, she feels tied to them. And she's concerned that as health systems get bigger, as health care becomes more corporate more run like a business, that that form of practicing medicine, where you deeply know your patients, you know, their family is, you know, their medical history is like the back of your hand because you've been caring for them for so many years, that that form of practicing medicine is disappearing.
WSHU: So the future will be a less intimate connection between the patient and the doctor.
KG: Yeah, and I think in some, we don't yet have the research to know exactly what that means for quality of care. There could be some ways in which it's improved and some ways in which it's less impactful for patients. But at this point, what we do know is that prices are going up.