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A Voice for Private Physicians Since 1943

Private Medicine Trumps Private Equity

By Marilyn M. Singleton, MD JD – https://marilynsingletonmdjd.com/

Over the last couple of years, we’ve been living in a frenzied political atmosphere of inflation worries, unaddressed crime, Covid, monkeypox, and a variety of social issues. These are distractions from thinking about the big picture: the march toward government and corporate control over our lives, including absorbing medical practice into the statist-corporate complex.

While many say that COVID-19 brought out the flaws in public health, it has also highlighted the joys and advantages of private practice medicine. People who are disappointed in the oft-times unscientific public health recommendations and mandates have benefitted from seeking advice from private practitioners. Sadly, we are on the road to losing private practice, the heart of good medicine.

A recent article about a private equity purchase of a small rural hospital chronicled in great detail how the firm ran the hospital into the ground. The residents were left with no hospital in their area. That was but one example. Until the last 10 or 15 years, most hospitals were owned either by mainly religious nonprofit entities or by states and cities, with ties to medical schools. Private equity ventures have quadrupled over the last 10 years, and have spent approximately $750 billion during that time period. As Bain Capital put it, 2021 was a “banner year” fueled by an aging population and more chronic illnesses. Private equity firms now control a large swath of hospitals, physician practices, ERs, nursing homes, and hospice centers.

For years, health policy experts have been warning about the dangers of private equity and consolidation in medical services. The focus on return on investment by private equity owners puts profits over patients. One study found that hospitals increased their prices after being acquired by private equity firms. Additionally, studies in nursing homes and dialysis centers have found private equity ownership is associated with not only higher prices, but a decrease in quality of care.

Concurrently, consolidation has been on a roll. Five for-profit insurers now control 43 percent of the market, more than 60 percent of community hospitals belong to a health system, and less than half of physicians own part of a private practice. A large California study found that consolidation of the hospital, physician, and insurance markets increased prices of services as well as ACA premiums. Broader research shows that hospital mergers increase the average price of hospital services by 6 percent to18 percent. One industry group places some of the blame on the increase in government programs with the 55 percent increase in consolidation correlating with the introduction of the Affordable Care Act (ACA) and the Medicare Access and CHIP Reauthorization Act (MACRA).

Of course, consolidation reduces patient choice.

We need more choice but is expansion of big companies into providing health services the answer? Amazon just made a $3.9 billion agreement to buy One Medical. How ironic given that One Medical is a primary care service offering 24/7 personalized care. This adds to their purchase of PillPack pharmacy in 2018. Walgreens drug stores will now have in-store clinics staffed by VillageMD personnel and ultimately will own 30 percent of VillageMD.

CVS’s new venture is downright scary. CVS is seeking to purchase Signify Health, a managed care company and/or some other primary care provider group by the end of the year. Some even speculate that CVS wants to buy Teledoc, a major telehealth service. Teledoc already is the exclusive telehealth provider for Aetna. Why is this beyond disconcerting? CVS began its expansion by purchasing multiple drug store chains. In 2006 it added “Minute Clinics” to the stores. In 2007 CVS Corporation and Caremark Rx, Inc. merged, creating CVS Caremark, CVS’ own pharmacy benefits manager. In 2018 CVS merged with the health insurance company, Aetna. (The antitrust judge did rule that as a condition of the approval, Aetna had sold its Medicare prescription insurance plans to WellCare Health Plans). That is called vertical consolidation – one company controls the whole stream of commerce.

Legally, there is not much we can do about it except protest with our feet. Seek out private practices where you are treated as an individual human being, not an income generator. The ideal practice is a cash-based practice or direct primary or specialty care practice. With direct primary care, a monthly fee covers all doctor visits, drugs dispensed at the office at wholesale prices, and 24/7 access to your doctor. Odd as it may seem, paying cash to see the doctor or have outpatient surgery can be less expensive than buying insurance with its co-pays and high deductibles. All you really need is hospital insurance (unless you are a billionaire). If there is not such a practice near you, find a second opinion via telehealth.

It is up to us to save the patient-physician relationship – and just maybe our republic!

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