Corporate giants are buying Rapid Pace’s primary care practices

Not surprisingly, the shortage of primary care doctors — so crucial to Americans’ health — is getting worse.

They practice in one of the least lucrative and least glamorous areas of medicine. Most of them are exhausted, seeing as many as 30 people a day; Find out if the sore throat is a bacterial infection, or manage the patient’s chronic diabetes.

So why are multi-billion dollar corporations, especially giant health insurance companies gobbling up primary care practices? CVS Health, with its sprawling pharmaceutical business and ownership of major insurer Aetna, has paid nearly $11 billion for He buys Oak Street Health, a rapidly growing chain of primary care centers that employs physicians in 21 states. and Amazon’s bold purchase of One Medical, another large physician group, for Almost 4 billion dollarsis another such step.

The appeal is simple: Despite their inferior status, primary care physicians oversee large numbers of patients, who bring business and profits to a hospital system, health insurance company, or pharmacy looking to expand.

And there’s an added lure: The increasing privatization of Medicare, the federal health insurance program for older Americans, means that more than half of the 60 million beneficiaries have signed up for policies with private insurers under the Medicare Advantage program. The federal government now pays insurance companies $400 billion annually.

“That’s the big money pot everybody’s aiming for,” said Erin C. Views-Brown, director of the Center on Law, Health, and Society at Georgia State University and author of the New England Journal of Medicine. condition About corporate investment in primary care. “It’s a one-stop shop for all your healthcare money,” she said.

Many doctors say they just became employees. “We’ve seen this loss of independence,” said Dr. Dan Moore, who recently decided to start his own practice in Henrico, Virginia, to have a greater role in the care of his patients. “You can’t become a doctor to spend an average of seven minutes with a patient,” he said.

The absorption of physicians’ practices is part of a broad and accelerating standardization of medical care, leaving patients in the hands of a shrinking number of corporate giants or hospital groups. Many of them were already patient insurers and controlled drug distribution through ownership of pharmacy chains or pharmacy benefit managers. But now, nearly seven out of ten doctors work for either a hospital or a company, according to the Recently Analysis from the Physicians Advocacy Institute.

The companies say these new arrangements will bring better, more streamlined patient care, but some experts warn that the merger will lead to higher prices and systems driven by the pursuit of profits, not patient care.

Insurers say their purchase of medical practices is a step toward so-called value-based care, in which the insurer and physician pay a fixed fee for an individual patient’s care. The flat payment acts as a financial incentive to keep patients healthy, provide more access to early care and reduce expensive hospital admissions and visits to specialists.

The companies say they prefer flat fees to the current system that pays doctors and hospitals for every test and treatment, which encourages doctors to order too many procedures.

Under Medicare Advantage, doctors often share profits with insurance companies if the doctors bear the financial risk of a patient’s care, and earn more if they can save on treatment. Instead of receiving a few hundred dollars for an office visit, primary care physicians can charge up to $14,000 a year to manage a single patient.

But experts warn that such major acquisitions threaten the personal nature of the doctor-patient relationship, especially if the parent company has the power to impose limits on services from the first office visit to an extended hospital stay. Once registered, these new customers can be directed toward related business chains, such as CVS Pharmacy or Amazon’s online pharmacy.

UnitedHealth Group is a sprawling example of Unified Services. The major insurer with nearly 50 million customers in the United States owns and oversees its ever-expanding subsidiary, Optum, which has purchased networks of physicians and medical websites. Optum can send patients from one of approximately 70,000 physicians to a surgical or urgent care center.

Sen. Elizabeth Warren, D-Massachusetts, is urging the FTC to take a hard look at some of these big deals, which regulators have not yet blocked on antitrust grounds. “I fear that the acquisition of thousands of independent providers by a few huge health care conglomerates could reduce competition on a local or national basis, hurting patients and increasing health care costs.” books to the organizers in March.

This standardization of Medicare may conflict with state laws that prohibit so-called corporate medicine. Such laws prevent a company that employs doctors from interfering with the treatment of patients.

And experts warn of potential harm to patients, when company management seeks to control costs through byzantine systems that require prior authorization to receive care.

For example, Kaiser Permanente, a giant nonprofit health plan that also owns physician groups, Settlement of malpractice case for approximately $2.9 million Last year with the family of Ken Flach, a former tennis player who contracted pneumonia and died of sepsis after a Kaiser nurse and doctor refused to send him for a personal visit or to the emergency room, despite his wife’s urgent plea. Medical decisions are made by providers in consultation with their patients, Kaiser said, and said the “deepest sympathy remains with the Flatch family.”

Doctors also resent censorship that does not benefit patients. “They try to run it like a business, but it’s not a business,” said Dr. Beth Cusack, MD, an internal medicine physician in Grand Rapids, Michigan.

Her group of doctors has teamed up with Agilon Health, an investor-owned company, to work with Medicare Advantage plans. Dr. Cusack said she should work longer hours, not to provide better care, but to provide additional diagnoses to patients, which increases federal compensation under Medicare Advantage. “It’s not because I provide better patient care,” she said. “It’s all about the bills.”

Corporate consumption of Medicare continues to grow. Walgreens Boots Alliance, one of the largest pharmacy operations in the United States, spend 5 billion for a majority stake in VillageMD, a primary care group, and teamed up with Cigna to buy another medical group for nearly $9 billion. Beyond purchasing outright, UnitedHealth is partnering with Walmart to provide care for older patients.

In touting the benefits of buying Oak Street Clinics to investors, Karen S. Lynch, CEO of CVS Health, says primary care physicians are cutting medical costs. “Primary care drives patient engagement and positive clinical outcomes,” she said.

Many of these companies are building chains of clinics. At a recent tour of the Oak Street Clinic in Bushwick, one of 16 open since October 2020 in New York City, patients were typically seen from 8 a.m. to 5 p.m., with a nurse available after hours for field questions.

Ann Greener, CEO of the Primary Care Collaborative, a nonprofit group, defended recent forays by private companies into this area of ​​health care, saying they instill practices with much-needed money and may improve access to care for people in disadvantaged areas. .

“The salaries of people in these arrangements are higher,” she said. “They’re offering more comprehensive care in many of those arrangements. They’re offering more technology and team-based care. That’s what the investment is all about.”

But she said those deals also risk shifting the balance from good handling to profit.

In recent years, some have turned to laws banning corporate medicine to challenge these large-scale private operations. Envision Healthcare, a private equity-backed company that employs emergency room doctors, is being sued in California by a unit of the American Academy of Emergency Medicine, a professional group that supports independent practices, accusing it of violating that state’s provisions.

“Perception exerts control and/or deep, wide-ranging direct influence and/or influence over physicians’ practice of medicine,” according to suit. The lawsuit asserts that Envision controls physician billing and establishes medical protocols.

While Envision would not comment on the lawsuit, it did say that it “follows an operating structure that is common throughout the healthcare industry and is widely used by nonprofit, private and public groups as well as hospitals and insurance companies.”

Major insurers find physician groups particularly attractive, even though many have reported significant losses. The acquisition of Oak Street, which has lost more than $1 billion over the past three years, could help CVS’s Medicare Advantage plans improve their quality or “star” ratings and increase payments for one of its plans.

Even small numbers of patients can translate into significant revenue. Owned by Amazon, One Medical is known for its stylish clinics. The company has acquired a practice that specializes in Medicare Advantage. Only about 5 percent of One Medical’s 836,000 members are enrolled in that federal program, but nearly half of its revenue comes from that small segment of patients, according to its 2022 financial statements.

Regulators are already pointing out questionable methods used by some practices. In November 2021, Oak Street revealed that the Department of Justice was investigating Selling scams like free trips to her clinics and paying insurance agents for referrals. A doctor at one center described recruiting patients with “gift cards, spoils, and goodie bags,” according to a shareholder lawsuit against Oak Street.

The lawsuit detailed concerns that doctors were inflating payments from the federal government by overestimating how sick their patients were.

Oak Street says the Department of Justice has not been accused of wrongdoing and says the lawsuit is “unfounded.”

These private Medicare Advantage plans have come under fire for raking in massive profits by inflating costs and exaggerating patients’ illnesses to charge the government more than it should.

Under the new rules, a Biden administration would eliminate some of the most problematic and overused diagnoses, and doctors and insurance companies could earn less.

But other profit paths also explain why companies want these deals. Unlike the restrictions on making money from insurance companies, where a Medicare Advantage insurer must spend at least 85 cents of every dollar on patient care, there are no limits to how much profit doctor practices and pharmacy chains can generate.

It may be too early to say whether standardized care will improve patients’ health. “So far, when you look across the industry, the record for these acquisitions has been mixed,” said Dr. Sachin H. Jain, CEO of the SCAN Group, a Long Beach, California-based nonprofit organization that provides Medicare benefits. plans.

And investments may not stop the rapid disappearance of the doctor, whom many people still seek for regular care, including newly a report Fewer medical school graduates appear to be entering the field.

“We’re dealing with incredible levels of burnout within the profession,” said Dr. Max Cohen, who works near Portland, Oregon. Since the pandemic, his low-income patients have gotten sicker, he said, with the disease level “through the roof.”