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Five Questions To Ask About The Consolidation Of Healthcare

Tue, 03/11/2014 - 9:18am
Rhea Boyd, M.D.

Comcast recently announced it is merging with Time Warner, the 2nd largest cable company in the US. Together, this deal nets Comcast an estimated 57 percent of the cable subscriber marketplace and heralds a new oligarchy in US media and entertainment. It’s big news for Comcast, but many aren’t as excited.

Why?

Because both Comcast and Time Warner have been consistently rated the worst providers of customer service in the cable industry. Now as they grow their consumer base and build unprecedented influence in their field, the concerns are mounting. When choices are limited and quality is poor, what recourse do consumers have to demand more of their providers? And what will drive quality, cost containment, and new product development in a market vacuum where the experience of the consumer is at the periphery of the business? The risk is that, with little competition, consumers may be forced to choose between service and no service and the cost of services and breadth of services provided will be divorced from consumer demand.

No service isn’t such a problem when you are talking about cable. But did you know the same thing is happening with your healthcare?

Since 2009, there has been a surge in the number of hospital mergers and acquisitions. The name of the game is market share and across the country, hospitals, clinics, and in some cases even insurance plans and pharmacies, are combining forces to form large conglomerates that will control where, how, and at what price you receive your healthcare. This is being touted as the future of medicine, an organized system where regional populations receive coordinated care. The question is, will the consolidation of healthcare networks create a vacuum where patients’ choices are constrained within a narrowing marketplace? To answer that question, you need to know a bit of the back story.

Basically, the Affordable Care Act changes how we pay for (read: how profits are made off of) your healthcare and hospitals are realigning their relationships with each other and their referring clinics, to vie for your healthcare dollars. Now, instead of receiving care from independent physician practices and hospitals that contract with local doctors, most Americans will be placed into regional systems where the local physician practice not only works with the hospital, but is in many cases, owned by the hospital. Combined, the hospital and clinic will be given a lump sum of money to be accountable for your care (hence the name “accountable care organizations“). This new payment structure incentivizes collaboration between hospitals and clinics, distributes the costs of managing health and preventing disease across the system, and encourages the appropriate and thoughtful use of limited healthcare resources.

But despite these obvious advantages, there are some important things to consider as we enter this new oligarchical era in medicine:

1. While it may not be a problem if the hospital that owns your local clinic is down the street, what if it is in another town entirely, and like many working class families, you don’t have the resources to get there? Does regionalizing care create geographic barriers to access?

2. What if the hospital that buys your clinic charges higher prices? What recourse will patients have to ensure their care is affordable when clinics choose sides and the local options for providers dwindle? If this happens, will more patients opt for “no service” because they simply cannot afford the cost of care?

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