How Physician Employment Affects Hospitals, Patients
Heated negotiations between a payer and a provider can leave patients caught in the middle. Such was the case with Select Health of South Carolina, which lost access to GHS’ network and physicians when the pair had a payment rate dispute in 2010. GHS dropped the contract, resulting in patients needing to be referred to a hospital 90 miles away for certain services, such as pediatric inpatient and subspecialty care.
Reiboldt says the natural forces at work within the market will keep this situation in check. Indeed, earlier this year, the American Medical Association released a statement to the Subcommittee on Health of the U.S. House Ways and Means Committee stating that the consolidation of the insurance industry could “exacerbate the harm caused by the exercise of market power.” As Nantz suggested earlier, employing physicians helps strengthen the negotiation power of the provider to equal that of a payer in the market.
How much, or if, individual consumer cost of care could be influenced by the rise in physician employment is hard to discern and being carefully watched by lawmakers. However, Reiboldt says ultimately the individual markets will dictate. “I don’t think the employed physician is presenting any harm to quality of care or driving up prices. Competition between hospitals should keep prices at bay.”
This article appears in the November 2011 issue of HealthLeaders magazine.
Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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