Healthcare Consolidation: Changing Medical Practice

A Hospital War Reflects A Bind For U.S. Doctors by Julie Creswell and Reed Abelson.  The New York Times.  November 30, 2012.

Using Boise, Idaho as a springboard case for a larger discussion of health care consolidation, this article suggests several contributing factors including shrinking Medicare reimbursements, higher costs due to the implementation of technology including electronic medical records, the changing environment of health care delivery, and certain aspects of Obamacare.  Buyers driving the consolidation trend include hospitals and hospital chains, insurance companies, and private equity firms as well as individual doctors who choose to band together.

The patient-care rationale for consolidation is the belief that coordination of care is key to good care.  However cited are indications that prices are rising relative to pre-consolidation.  e.g. services performed in a doctor's office are sometimes cheaper that the same service performed in hospital which now owns the referring physician group.  Also cited by some physicians in the article are perceived difficulties in referral outside the consolidated health care entity.  Other problems cited are pressure on doctors to meet financial targets and admissions goals in addition to the structure of physician contracts.  Federal and state officials, including the Federal Trade Commission, are investigating some instances of anticompetitive consolidation.