Doctor Mergers Could Drive Health Costs Higher

A new survey by the consultancy Accenture shows that more doctors are selling their private practices to work at larger health-care systems.

By 2013, less than one-third of U.S. physicians are expected to remain in private practice, the survey said. Doctor groups note that the health-care reform law is driving this shift and worry that monopolization in health care could drive health costs even higher. All of that calls into question whether the quality and cost of American health care will suffer. For example, the doctor-merger trend comes at a time when more and more consumers are getting vaccinated in supermarkets and pharmacies, says the U.S. government

Doctors surveyed by Accenture said that theyre increasingly attracted to the benefits offered by hospital-based employment opportunities, such as relief from administrative responsibilities; greater access to health-care technology, tools, facilities and equipment; and a more manageable work week and stability.

Plus, merging with bigger operations helps them use the bigger muscle of their new partners in their fight with health insurance companies.

However, the doctor-merger trend comes at a time when the country faces a doctor shortage of as many as 120,000 less doctors by 2025, estimates the Association of American Medical Colleges.

Consolidation can lead to monopolization and higher costs. For example, the Robert Wood Johnson Foundation found that after the last doctor-merger wave between 1990 and 2003, 90% of large urban area hospitals obtained excessive market power, as defined by the Federal Trade Commission.

The study indicated that consolidation drove prices higher by a range from 5% to 40%. The study at the time said that promoting monopolies may be the biggest impediment to cost control going forward.

Another report from PricewaterhouseCoopers found that 2,910 physician offices were involved in mergers or acquisitions in 2009 nearly double the number in the previous year. Changes in Medicare reimbursements were to blame, changes which came down particularly hard on cardiologists. As a result, 60% of cardiology practices were planning layoffs and 39% were considering selling themselves to hospitals, the study said.

Another interesting trend is taking hold. And that involves where consumers are getting an important part of their health care from. Supermarkets and pharmacies were the most popular alternative to doctors offices for influenza vaccination in 201011, said the U.S. Centers for Disease Control in a new report published this week in Morbidity and Mortality Weekly Report.

While 39.8% of adults received their vaccine in a doctors office, supermarkets, pharmacies, and other stores came in second with 18.4%; workplaces were third with 17.4%, the CDC said in a statement.

This increase likely resulted partly from changes in state laws allowing pharmacists to administer influenza vaccinations to adults, and subsequently, more pharmacies offering influenza vaccinations, the CDC noted.