Consolidation has become commonplace, but some experts worry it will increase prices without improving patient care.
(from Lebanon Daily News)
Annville Family Medicine founding partner Robert Nielsen had a passion for treating ill patients, but by 2014, it was the doctor who was sick.
He was sick of always thinking about ever-increasing
government regulations, keeping up with paperwork, negotiating with
insurance companies – everything that kept his focus away from the
people who needed to get well.
Nielsen found relief when the
independent practice he helped to form in 1978 – doctor’s visits cost
$12 then – was purchased by Harrisburg-based PinnacleHealth in a merger
that took effect on Jan. 1, 2015. He’s happier now, still performing
some administrative roles as medical director of PinnacleHealth Medical
Group but spending half of his time with patients.
Speaking of patients, it was thinking about current and future generations that need access to care that convinced him Annville Family Medicine had made the right decision to join Pinnacle, he said.
Speaking of patients, it was thinking about current and future generations that need access to care that convinced him Annville Family Medicine had made the right decision to join Pinnacle, he said.
“Once you get (yourself) out of the picture and look at it from that perspective, there was no regret,” he said.
Nielsen isn’t alone. Across the spectrum of health care, mergers and acquisitions driven by economic pressures and federal government initiatives have become commonplace. Pennsylvania had only 35 independent hospitals at the end of 2015, down from 122 in 2000, according to Paula Bussard, chief strategy officer for the Hospital & Healthsystem Association of Pennsylvani
“The
reality, in today’s world, is that it’s very difficult for an
independent community hospital to thrive,” said WellSpan Health
President and CEO Kevin Mosser.
Over the past two years, WellSpan
merged with Good Samaritan Hospital and behavioral health facility
Philhaven and partnered with urgent care facility MedExpress as part of
its “comprehensive” health care strategy. Lancaster General Health has
set up shop in the Lebanon area with a system that includes primary
care, urgent care, diagnostics, specialists, and physical therapy
components.
In neighboring Dauphin County, a proposed merger
between PinnacleHealth and the Penn State Hershey Medical Center remains
the subject of litigation.
It’s a trend that worries Mark Pauly, professor of healthcare
management at The Wharton School of the University of Pennsylvania –
particularly Hershey and Pinnacle’s proposed merger. The University of
Pennsylvania Health System merged in 2015 with Lancaster General Health,
a rival of Hershey Medical Center and PinnacleHealth.
“The part
that’s almost for sure is, it will result in higher prices. The part
that’s up in the air is, it might improve quality,” Pauly said. “If I
were living in the area, I’d be getting a little nervous. It’s not
something that looks to me like a good bet for improvement in the
overall well-being of people in the area.”
Higher prices, better care?
Health care
consolidation can take two primary forms: mergers between two existing
healthcare systems, and “vertical” integration between hospitals and
other health care providers like family physicians or specialists.
However, the benefits to patients of both trends have been called into
question.
A 2012 synthesis of studies, published by the Robert Wood Johnson Foundation,
found that hospital consolidation led to price spikes often exceeding
20 percent and usually did not improve quality of care.
Physician-hospital mergers did not improve quality or reduce costs, it
found.
Martin Gaynor, a professor of economics and health policy at Carnegie Mellon University, co-authored a December 2015 analysis called “The Price Ain’t Right?”
that found hospital prices in markets with hospital monopolies are 15.3
percent higher than in markets with four or more hospitals. There are
plenty of studies in which consolidated systems could have demonstrated
better quality of care but didn’t, Gaynor said.
Part of the
problem is that consolidation doesn’t necessarily lead to full
integration of the systems where patients are able to take advantage of
both organizations’ strengths, he said.
“Nobody can point to
bulletproof evidence that it’s going to happen,” agreed Pauly. “It’s all
an untested hypotheses, but we’re already moving to it.”
On the
other hand, it’s not difficult to tell why prices go up, Pauly said:
mergers decrease competition and increase buying power in negotiations
with insurance companies.
The extent to which the Hershey/Pinnacle
merger would give the consolidated forces a large enough market share
to harm the market’s competitiveness is under dispute in the ongoing
legal battle involving Hershey, Pinnacle and the Federal Trade
Commission.
Local hospital system officials, however, insisted that consolidation
provides more tools and more convenience for customers. WellSpan’s goal
of having a comprehensive health system – including behavioral health
with Philhaven – stems from its belief that patients will have better
outcomes if their health care provider can address all of their needs,
Mosser said.
“You’re not healthy unless you’re physically healthy, mentally healthy, spiritually healthy,” he said.
The
“team-based care” approach also allows for collaboration between, for
example, a doctor and a pharmacist, helping to ensure that the patient
is getting the proper medicine to treat their condition, said William
Bird, interim chair of family and community medicine at the Hershey
Medical Center. Because he practices in an office that also has a
radiology wing, he can sometimes arrange for women who have been putting
off their mammograms to have one completed right then, decreasing their
chances of unidentified breast cancer, he said.
More broadly,
consolidation helps health systems develop databases of patient
information that can be used to improve the entire community’s health,
officials said.
Personal touch
According to Marni Jameson Carey, executive director of the Association of Independent Doctors, there are other ways in which healthcare consolidation can hurt a patient’s experience.
Doctors in consolidated systems are incentivized to refer their
patients to specialists within the system rather than the best
specialist for that patient’s particular problem, Carey said. Also,
larger healthcare companies are more likely to cause patients longer
wait times on the phone and make it more difficult for the patient to
navigate the phone system to find the correct person they need to talk
to.
“Corporatization of medicine doesn’t make it easier for
patients to get answers,” she said. “There may be more procedures, and
they will get automated phone machines, but they won’t get that personal
touch.”
Local health system officials, however, said it is simply
not true that having a primary care doctor in a system limits the
specialist to which a patient can go. Bird said Hershey system patients
are always able to see a particular specialist if that is what they
desire, and Nielsen said he has many patients who stick with specialists
outside of Pinnacle’s system simply because they like them.
Mosser said there is a “hub and spoke” model of health care system in
which community doctors steer patients toward a large, hub hospital for
more intensive care – but WellSpan doesn’t operate on that model. In
fact, it’s WellSpan’s desire to keep healthcare local that is driving
its push to reach agreements with different types of healthcare
providers in Lebanon County. Patients can therefore experience the
benefits of continuity of care without being referred to specialists and
facilities in York.
“We have a foundational belief that people
will have better outcomes if they stay close to their friends and family
to get their care,” he said.
Patients in the Lancaster General
Health system – which has a presence in Lebanon County – also can
receive benefits from its merger with Penn Medicine without having to
visit Philadelphia. According to Lancaster General’s website,
Penn Medicine experts in areas like liver and kidney transplant
evaluation have now opened clinics in Lancaster and its experts in
oncology and gastroenterology are working with Lancaster General
physicians.
Bird acknowledged that larger systems have to more
deliberatively focus on patient experience to avoid causing them
inconvenience, but said a pleasant patient experience is still possible.
“I
think the goal, no matter whether you’re big or small, is
patient-centricity,” he said. “Phone trees are nasty, but there are
phone trees in smaller (offices), too.”
Forces of consolidation
When Annville
Family Medicine left a previous affiliation with Good Samaritan in the
early 2000s, Nielsen thought the practice was good on its own – and it
was throughout the next decade.
The Affordable Care Act changed all that.
According to the Robert Wood Johnson Foundation’s report, the ACA encouraged consolidation in two primary ways. It promoted Accountable Care Organizations (ACOs)
– groups of hospitals, doctors and specialists that provide care in a
coordinated fashion and are rewarded by Medicare for doing so. It also
pushed “bundled payments” for a full episode of care rather than
separate payments from each provider involved in that treatment.
The
health care law encouraged providers to focus on “population health,”
developing databases of patient information that allow them to reach out
to at-risk populations and improve their health. Doctors in
consolidated systems have greater abilities to access such data, local
health system officials said.
At Annville Family Medicine, there
were also problems associated with the practice growing and associated
advantages to consolidation. Becoming part of PinnacleHealth gave the
practice the resources to move to a larger center this July. It had also
struggled to recruit young physicians, many of whom are attracted to a
large health care system that can offer better benefits packages and
free them from administrative headaches, Nielsen said.
Meanwhile, health care costs in general are rising, and a hospital
may need the resources and economies of scale benefits provided by a
larger system in order to pay for more up-to-date medical equipment or
to participate in the growing field of robotics in healthcare, Mosser
said.
However, officials stressed that economically motivated
consolidation doesn’t have to mean worse patient care. In fact, quality
of care and cost to the hospital often go together, Bird said.
“If you improve quality, you’ll take care of costs,” he said.
Medicare
incorporates patient satisfaction into its reimbursement metrics,
providing an economic incentive for better care, Bussard said.
While
Nielsen has lived through many trends in medicine since founding
Annville Family Medicine in 1978, he said one thing hasn’t changed.
“The
doctor-patient relationship is the center of the whole thing,” he said.
“Whenever you lose focus of the patient, then you lose focus on what
the job is all about.”
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