Changing The Structure Of Health Care Delivery Systems: To Benefit The Patient, The Providers, Or The Insurers?

Josh Freeman | Medicine and Social Justice | January 12, 2014

Changing the structure of health care delivery systems: to benefit the patient, the providers, or the insurers?

In an important series of 3 articles beginning on the Sunday before the New Year, “Doctors Inc.”, Alan Bavley of the Kansas City Star looked at the increasing acquisition of physician practices by hospitals, and the impact this has on access to, quality of, and cost of health care for patients. The first article, “Medicine goes corporate as more physicians join hospital payrolls”, describes the “what”, that:

“Since 2000, the number of doctors on hospital payrolls nationwide has risen by one-third, according to the American Hospital Association. In the Kansas City area, fully 55 percent of physicians are now employed by hospitals, Blue Cross and Blue Shield of Kansas City estimates. That includes virtually all cardiologists and most cancer specialists.” 

These changes are not limited to the KC area; he cites both national data and that from disparate regions such as Spartanburg, SC and Phoenix, AZ. Part of the reason, the "financial model", which is described in this first article, is that such “integrated” practices generate internal referrals, keeping patients within the system, as well as generating lucrative procedures. Physicians get a piece of the action; they get guaranteed salaries paid in part by the hospital or health system which is getting downstream revenue for their referrals.