Another Example of How Hospitals Employing Physicians Harms Patients

Physician journalist, Elizabeth Rosenthal, wrote about yet another downside of hospital-employed physicians. Granted, she did not realize that is what she was writing about. Rather, she wrote about how patients get caught in the middle when health care systems (multi-hospital chains) get in fee disputes with health insurance companies.

Sarah Feldman, 35, received the first ominous letters from Mount Sinai Medical last November. The New York hospital system warned that it was having trouble negotiating a pricing agreement with UnitedHealthcare, which includes Oxford Health Plans, Feldman’s insurer.

In the game of who can gouge patients and employer health plans more, hospital systems are mailing their physician employees’ patients ominous news, hoping to force insurers to pay more for services. Your physicians likely do not share in any higher fees, although you may have higher cost sharing for their services. I have yet to get such an email or letter in the mail, but I have read several articles over the years when various Dallas-area hospital systems talk to the media about dropping BlueCross of Texas or something similar.

One of the most unfair aspects of medical insurance, in a system that often seems designed for frustration, is this: Patients can change insurance only during end-of-year enrollment periods or at the time of “qualifying life events,” such as a divorce or job change. But insurers’ contracts with doctors, hospitals and pharmaceutical companies (or their middlemen, so-called pharmacy benefit managers) can change abruptly at any time.

That is particularly galling for patients because, whether obtaining insurance through an employer or buying it on the marketplace, they generally choose a policy based on whether it covers their desired doctors and hospital or an expensive drug that they need.

In years past all your local hospitals were probably in your health plan. Most doctors were also in your health plan. Those doctors who were not in your health plan did not want to be in any plan. You can blame Obamacare for increasingly narrow networks. We should also blame the Federal Trade Commission for allowing hospitals, private equity-backed physician practices and health insurers to consolidate to the point where each is a member of a local cartel.

In my area, searching for physicians often pulls up a major hospital system (my former employer). I worry that when I select my doctors, he or she will try to refer me to his or her employer’s services. An outpatient complete blood count costs several times what I pay at Walk-in Lab, for example. It is increasingly difficult to avoid falling into the trap of seeing hospital-employed physicians since 75% of physicians are now employees.

There has been a flurry of news lately about hospital systems threatening to no longer accept local Medicare Advantage plans. That threat was likely just empty rhetoric, but seniors are more dependent on their doctors than younger people who may not see their doctor but once a year. It undoubtedly works or hospitals would not engage in scare tactics. The risk is that chronically ill patients, who may have had a relationship with their physicians for years, must scramble to find new ones.

It is not appropriate to put patients in the middle of reimbursement battles between providers and payers. At least a portion of this problem is directly related to allowing the corporate practice of medicine where large hospital systems buy physician practices and employ doctors directly. It is one thing for my health insurer to inform me I will get lower cost-sharing if seeking care at Presbyterian instead of Methodist. It is another conundrum entirely to discover my local doctors (most of which are employed by Baylor) are no longer in my health plan.