Independent medical practices are being smothered by excessive and costly government regulation, fueling greater hospital market consolidation and resulting in ever-higher health care costs for individuals and families.
There is, however, a glimmer of good news.
In a recent hearing, Republicans and Democrats on the House Small Business Subcommittee on Oversight, Investigations and Regulations, chaired by Rep. Beth Van Duyne, R-Texas, generally agreed that the status quo imposes an unacceptable administrative and regulatory burden on small medical practices.
In his remarks, for example, Rep. Kweisi Mfume, D-Md., the ranking member of the subcommittee, emphasized that the current situation is driving physicians out of private, independent medical practices.
“This growing overhead pushes many physicians away from their private practice and toward hospital employment. … Private practice was once a shining cornerstone of the small-business community,” he said.
While hospital conglomerates win, patients lose.
Independent practices have long provided more personalized care and care delivery, while also allowing doctors to spend more time with their patients. Independent practices are also indispensable in rural areas, where access to health care is limited.
Regrettably, those services are becoming more and more rare in the face of increasing consolidation. Fewer than 1 in 3 family practitioners now work at an independently owned principal practice site.
In his testimony before the subcommittee, Dr. Brian Miller, a practicing physician and professor of medicine and business at Johns Hopkins University, emphasized that decades of conventional regulatory policy has brought America to this point:
Every time we see a problem in health care policy, we design a static, regulatory administrative agency-driven solution. And then a couple of years later, that problem is still there—and the solution is another administrative intervention.
So, what we are experiencing now with all these small practices leaving is the cumulative effect of 30 years of administrative, state-driven interventions in health care policy.
This cumulative regulatory pileup has left physicians drowning in compliance obligations, leaving less time for their actual profession; namely, treating patients.
Researchers writing in JAMA Network published a time-motion study revealing that, on average, medicine residents spend only 12% of their day in direct patient care activities. So much for patient-centered care.
In his testimony, Dr. Henry Punzi, a practicing physician and clinical assistant professor at University of Texas Southwestern Medical Center, summarized the problem facing practitioners.
“The key there is being able to do a good history and physical that allows me to identify 80% of the problems that patient has. But I have to have time to do that,” he said.
Miller agreed, stating that doctors today are forced to work in a system where they are “practicing to document, rather than practicing to treat the patient.”
Beyond the deterioration in patient care, this growing consolidation of care delivery, particularly in hospital markets, leads to higher health care costs.
Matthew Fiedler, senior fellow in economic studies at the Brookings Institution, told the subcommittee: “If the hospital buys up the local physician practice, it can now charge more for those services than it could before, which is a powerful incentive pushing towards consolidation.”
Mfume reinforced Fiedler’s point: “It endows hospitals with … monopolistic power in insurance negotiations. And most, if not all, studies show that the most concentrated hospital markets have 5% higher insurance premiums than those that are the least concentrated.”
In 2015, researchers writing in Health Affairs estimated that physicians spent an estimated $15.4 billion annually just in complying with the reporting of quality measures.
In 2017, the American Hospital Association published a study finding that health providers generally incurred an annual cost of $39 billion in complying with government regulatory requirements.
This steady stream of directives—including those imposed by the giant federal entitlement programs, Medicare and Medicaid—shows no sign of slowing down.
In its 2022 survey of group practice experience with this regulatory burden, the Medical Group Management Association found that 89% of respondents said that the regulatory burden had increased over the past year, and 97% said that a reduction in their regulatory burden would enable them to increase their allocation of resources to patient care.
Upon taking office, the Trump administration issued an executive order requiring agencies across the government to remove two regulations for every new regulation it imposed. It was a commonsense idea, but one that has deteriorated under the Biden administration.
Congress can solve the problems that Congress created. While an enormous task, a good place to start would be to require the Government Accountability Office to review and reevaluate federal health care regulations on an annual basis and provide Congress with specific recommendations to reduce or repeal counterproductive, outdated, or superfluous regulatory requirements.
The policy goal should be to free up the time, energy, effort, and money of overburdened physician practices, enabling doctors to spend more of their valuable time with their patients. If Washington’s policymakers are serious about improving Americans’ quality of care, they need to reduce the regulatory burdens they impose on doctors and allow them to reinvest in the art and practice of medicine, their noble profession.
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