Congress must act to preserve independent primary care practices

a doctor meets with an elderly patient

COVID-19 has laid bare the weaknesses of the U.S. health care system, threatening the financial solvency of physician practices across the country. Many risk being purchased by those with deeper pockets: hospitals, for-profit entities such as Optumcare, or private equity firms. To prevent further consolidation, which is well known to lead to higher prices, Congress should target some of the next rounds of emergency funding to preserve the viability of small, independent primary care-focused practices and consider increasing funding to the regulatory agencies charged with monitoring anti-competitive behavior in health care markets. 

Independent primary care practices are instrumental, yet a shrinking piece of our nation’s health care system. A study just published in Health Affairs finds that they provide equal quality care to integrated delivery systems. Combined with corroborating evidence on lower prices and spendingbetter performance under payment reformsfewer avoidable hospitalizations, and better patient satisfaction with care coordination, these practices need and deserve support during this time of disruption.

Our study reports on a survey of over two thousand primary care practices that assessed the degree to which practices adopted care delivery and payment reforms intended to improve quality, including the adoption of evidence-based guidelines, care coordination for complex, high-need patients; participation in quality-focused payment programs; screening for clinical conditions and social needs; and use of registries and decision-support tools.

We compared quality scores across physician practices under different ownership structures, including independent practices and those owned by several types of integrated delivery systems.  Independent practices had higher quality scores than integrated systems on two measures and equal scores on six measures. On only one measure — participation in quality-focused payment reforms, did independent practices have significantly lower scores, almost certainly due to the current complexity of joining these programs.

Hospital and health system ownership of physician practices have both increased substantially in recent years. For example, in some regions in California, the proportion of primary care physicians employed by hospitals increased from less than 30 percent to over 50 percent between 2010 and 2016. These changes were associated with a 12 percent increase in marketplace premiums. With COVID-19, practices are expected to lose almost $70,000 per physician in 2020. The return of rising COVID-19 infection rates makes it increasingly unlikely that smaller, independent practices will survive. 

We know that increasing consolidation is one of the primary reasons that the United States spends so much more on health care than other countries. When hospitals or health systems own all (or most) of the physician practices in a community, private health insurers have no choice but to pay the price they demand. Besides, those who own practices can steer referrals for inpatient or ancillary services, such as imaging, to the parent organization, reducing choice, and further increasing costs. 

Rather than accepting these trends as if they are a force of nature, policymakers and other stakeholders should take advantage of the tools at their disposal. State and federal antitrust authorities should carefully review proposed mergers and acquisitions and monitor anti-competitive behavior. But for many practices, such reviews could be too little, too late. Congress has already created the Provider Relief Fund, but only a tiny fraction focused on independent primary care practices. Congress can build on this step by targeting some of the next rounds of COVID-19 relief to preserve small and independent primary care practices. Commercial insurers should also consider providing ongoing support for these practices.

Many have argued that integrated delivery systems are the solution to the fragmentation and lack of coordination that many Americans now experience. These larger, financially integrated delivery systems are not the only path to better care. Further innovations in care delivery will require a strong foundation of primary care. Small, independent primary care practices could be a vital piece of the puzzle and should be preserved. 

Elliott Fisher, M.D., MPH, is a physician and professor of medicine and health policy at The Dartmouth Institute. Carrie Colla, Ph.D., is an economist and professor of health policy and clinical practice at The Dartmouth Institute. 


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