18-14 Segment 1: The Price Consequences of Doctor Consolidation

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In some areas, it has become almost impossible to find independent physician practices. Many of these smaller practices have opted into being bought by hospitals and other large medical groups. So, what has prompted the increase of consolidation in the medical field? And what does this mean for patients?

The incentives of consolidation have been researched, but the results do not point to one reason. Dr. Laurence Baker, Professor of Health Research and Policy at Stanford University School of Medicine, explains that physicians running smaller practices might benefit from no longer having their own business. Another possibility, Dr. Christopher Ody, Research Assistant Professor at Kellogg School of Management at Northwestern University, explains, is that some hospitals may view consolidation as a way to improve the quality of healthcare and decrease the costs to help physicians and their patients. However, data has indicated that the factor with the largest role in consolidation has to do with increasing the amount that hospitals are getting paid, and decreasing the amount paid to pharmaceutical companies. Even though research has not provided an overarching incentive that drives consolidation, the data seems to point to increasing income for hospitals rather than providing patients with better care. Furthermore, hospital consolidation has not been shown to benefit the patient. Dr. Baker explains that data indicates that the cost of healthcare has not gone down for patients with consolidation. Since the cost of healthcare has increased for patients, many have started to wonder how consolidation has been able to continue and what is being done to control it.

In the medical field, it is important to maintain consistency in market concentration and ensure that the markets are still competitive. One way in which authorities in the medical field work to maintain market concentration is by regulating transactions that reach a price threshold. However, Dr. Ody explains that hospitals have been able to avoid these regulations by partaking in multiple smaller transactions that invest in a small number of physicians at a time in order to ensure that the cost is below the threshold for evaluation. By avoiding regulations, hospitals have been able to grow into much larger entities that generate a lot of power and income from smaller practices. Since consolidation has prompted increased healthcare costs, it currently appears to be detrimental to the medical field rather than helpful. Yet, it could be worth it if hospitals were able to determine a method of consolidation that decreases healthcare costs and improves the quality of care that is provided to patients.

Guests:

  • Dr. Laurence Baker, Professor of Health Research and Policy at Stanford University School of Medicine
  • Dr. Christopher Ody, Research Assistant Professor at Kellogg School of Management, Northwestern University

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18-12 Segment 1: Hospitals and Housing

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In the past, healthcare has spent thousands of dollars on treating the homeless, and often times the hospitals are never paid for these treatments. Homelessness affects an individuals health and severely decreases their life expectancy. Stephen Brown, Director of Preventive Emergency Medicine at University of Illinois Hospital and Health Sciences, Chicago, explains that homeless people are admitted to the hospital more than the average person and on a more consistent basis. Yet, following these treatments, the homeless are often sent back to the streets and forced to fend for themselves again.

However, some hospitals around the nation are beginning to acknowledge their role in helping homelessness. In light of this growing problem, bigger cities around the nation have started to provide housing to the homeless. But, they have replaced the traditional model that required people to be clean of their addiction before they were provided with housing with a much more efficient model that has already shown higher success rates. Shannon Nazworth, President and CEO of Ability Housing in Jacksonville, Florida, explains that the new “housing first” model takes people straight from the street and provides them with shelter, and then gives them access to resources that help them get back on their feet. She explains that they have the responsibility to pay rent, but the program helps the individuals access funds through benefits. The end goal of this program is to help the person work toward a financial position in which they are able to to move from program housing to different community housing.

Since “housing first” programs began, they have shown a significant increase in getting homeless individuals off the streets and keeping them off the streets. But, the programs have still faced backlash. Nazworth explains that due to stigmas associated with mental health and homelessness there have been misconceptions about the individuals that would be allowed in these programs. In order to change this, Nazworth states that the program allows people to come in and observe the housing to acquire more knowledge on it. By providing homeless individuals with the opportunity to receive housing and aid, many of them are capable of redeeming their health and eventually no longer rely on the programs for help anymore.

Guests:

  • Stephen Brown, Director of Preventive Emergency Medicine at University of Illinois Hospital and Health Sciences, Chicago
  • Shannon Nazworth, President/CEO of Ability Housing, Jacksonville, Florida

Links for more information:

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