Ironic findings from the operator of Rhode Island's hospital group
Brown University
Compared with PCPs at independent practices, those
affiliated with hospitals or private equity firms charged higher prices for the
same services.
The findings were published in JAMA
Health Forum.
Health care consolidation is a driving force behind high
health care prices in the U.S., said lead study author Yashaswini Singh, an
assistant professor of health services, policy and practice who is affiliated
with the Center
for Advancing Health Policy through Research at Brown.
Because of a lack of data on the consolidation of primary
care physicians, Singh said that it was difficult to quantify the trend.
“It's impossible, in the absence of price and ownership transparency, to really understand the trends in consolidation and corporatization in primary care, and then ultimately, what are the effects they are having on the prices you and I pay for health care,” Singh said.
The recent implementation of federal Transparency in
Coverage rules, which require health insurers to disclose in-network negotiated
rates for all services and for all contracted health care professionals,
provided a novel opportunity to undertake this analysis, Singh said.
The researchers analyzed a total of 198,097 primary care
providers and 226.6 million negotiated prices. They first identified
hospital-affiliated and private equity-affiliated PCPs and then linked that
information to pricing data derived from Transparency in Coverage
datasets.
They found that primary care physicians affiliated with
hospitals increased from 25.2% in 2009 to 47.9% in 2022. Over the same period,
1.5% of PCPs in the U.S. became affiliated with private equity firms. While
that number looks small, Singh said that the localized consolidation model of
private equity means that the trend tends to be more pronounced in certain
regional markets — Texas and Florida in particular.
Relative to independent PCPs, negotiated prices for office
visits were 10.7% higher for those affiliated with hospitals and 7.8% higher
for those affiliated with private equity firms.
These differences in prices persisted regardless of insurer.
“Our sample includes some of the largest national health
insurers and suggests that, despite their size and power, insurers are either
not able to or not willing to exert downward pressure on prices in negotiations
with these entities,” Singh said.
Higher health care prices per se are not problematic, Singh
said, especially in primary care, which has been characterized by
under-investment. However, she said, consolidation is not associated with
reinvestments that improve quality or access to care.
“Higher payments might be a good thing if that expanded
access to care, or attracted talented physicians within the specialty,” Singh
said. “But we know from longstanding data in health economics and health policy
that in general, the higher prices that result from consolidation do not seem
to be reinvested in ways that improve the quality of care for patients or the
compensation received by physicians.”
She added: “And so then the question becomes: are these
higher prices just going back in the pockets of investors or executives rather
than being invested in ways that can improve the overall care experience or
workforce experience?”
In the study, researchers said that additional evidence on
the growth in hospital and private equity affiliation in primary care can shed
light on recent changes in physician organization and help guide competition
policy in health care markets. This type of research may also help identify the
sources of the wide variations in prices paid for physician services observed
across geographic areas for similar services, they noted.
Additional study contributors include Christopher Whaley and
Nandita Radhakrishnan from Brown and Loren Adler from the Brookings
Institution.