6 days Ago
Facebook Twitter WhatsApp SMS Email Print Copy article link Save At the beginning of this year, Medicare hit doctors with a pay cut. Congress must reverse that cut soon — and enact a permanent fix in the way it pays doctors. Absent action, many independent physician practices may be forced to shut their doors.
That's not hyperbole, it's reality. That would deprive countless patients of access to high-quality, lower-cost care in their communities. It's the fifth consecutive year doctors have seen reimbursement from Medicare decline.
At the same time, the costs associated with running a practice are set to rise 3.5% this year. Medicare reimbursement has been shrinking for a long time.
When adjusted for inflation, it's fallen 33% since 2001. When independent physicians can no longer pay their overhead, they have few options for staying in business. They can try to negotiate higher payments from private insurers — a near impossibility, given the leverage the insurers' huge size affords them over doctors.
They can reduce services. They can close up shop. Or they can sell their practices to larger entities.
Many doctors have opted for this last path and joined large hospitals, health systems or vertically integrated insurance companies that now deliver medical care. In the last five years, nearly 75,000 doctors have signed on as employees at hospitals and health systems. For reference, there are about one million physicians in the United States.
Hospitals acquired 2,800 additional physician practices in 2022 and 2023. As of January 2024, they owned nearly 70,000 physician practices. That number has grown 12% since 2019.
Paul Berggreen Hospitals have been all too happy to add physicians to their employment rolls because they're a source of referrals for tests and procedures. Referrals can be big moneymakers. Medicare pays hospitals more than private practices or ambulatory surgery centers for exactly the same services — everything from cancer screenings and X-rays to chemotherapy infusions and heart-imaging procedures.
All this hospital-driven consolidation has serious implications for patients. When an independent practice in their community closes, they may have to pay more for the same care they had been receiving. Hospitals' higher reimbursement rates can result in patients facing higher cost-sharing responsibilities than if they'd received the care in an office or independent ambulatory surgery center.
They may be forced to travel to a hospital that's much farther away for the care they need. The gradual disappearance of private practices has also given large hospitals, health systems and vertically integrated payers like UnitedHealthcare license to raise their own prices, since they face less competition. A study by the National Bureau of Economic Research found that physician services delivered within large health systems cost up to 26% more than those delivered by independent practices.
And there's no evidence that the higher prices lead to better care or outcomes for patients. Consolidation is driving Medicare's costs up, too. According to a study of five specialties conducted by health care consulting firm Avalere, total Medicare expenditures per beneficiary per year increased an average of more than $1,300 in the 12 months after the physician caring for the beneficiary moved from an unaffiliated private practice to a hospital affiliation.
Congress has the power to reverse these trends — and protect the viability of independent physician practice — by raising Medicare reimbursement for physicians. Undoing the ill-advised 2025 pay cut and making doctors whole this year as part of this year's budget reconciliation process are a start. The bipartisan Medicare Patient Access and Practice Stabilization Act of 2025, which was introduced in January by U.
S. Rep. Greg Murphy, R-N.
C., and has been co-sponsored by 120 of his colleagues, both Republican and Democrat, would do just that. But Congress must not stop there.
It's time to index Medicare reimbursement to inflation — permanently. For years, lawmakers have applied all manner of temporary fixes and patches to mitigate the impact of Medicare reimbursement cuts for physicians. Such slapdash policymaking makes no sense — and creates uncertainty for physicians about whether they'll be able to absorb the rising costs of running a practice, recruit and retain top-notch staff and invest in cutting-edge technology and equipment.
Medicare reimbursement for hospitals has more than kept pace with inflation over the past quarter-century. Independent physicians deserve the same treatment. By enacting such policy, Congress can expand access to care and help preserve competition within our health care market.
That's always healthy..
