Physicians blast health care consolidation, unneeded regulatory burdens in U.S. House hearing

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Health care is a hot topic in the House of Representatives, with lawmakers saying they want to help physicians and patients optimize care and value while minimizing administrative headaches.

Smaller and independent physician practices were part of the discussion in the hearing “Burdensome Red Tape: Overregulation in Health Care and the Impact on Small Businesses,” by the House Small Business Subcommittee on Oversight, Investigations, and Regulations. Meanwhile, lawmakers brought their editing pencils for the House Energy and Commerce Committee’s full markup of 15 health bills. Both hearings were held July 19 in Washington, D.C., and were broadcast online.

‘Consolidation decreases quality of care’

Subcommittee Chair Rep. Beth Van Duyne, R-Texas, opened with citations from the American Hospital Association (AHA) and the Medical Group Management Association (MGMA) to illustrate the disproportionate burden of regulations on small health care practices. She mentioned meeting a doctor who owned a practice but sold it “due to the ever-growing cost of keeping up with government-imposed red tape.”

Joining large health systems is not necessarily the answer for physicians or patients.

“When regulatory costs reach the point that it is no longer feasible for small, private health care practices to keep their doors open, it leads to one thing: consolidation,” Van Duyne said. “While proponents of consolidation claim that health care mergers decrease cost and improve access to care, the reality is quite different. Far too often, consolidation decreases quality of care, eliminates competition which increases cost, and removes the possibility of physicians owning their own businesses, thereby crushing the American dream.”

Where to start?

Describing over-regulation in health care, it’s hard to know where to start, said Brian J. Miller, MD, MBA, MPH. Miller is a practicing hospitalist and assistant professor at at Johns Hopkins School of Medicine and a nonresident fellow of the American Enterprise Institute.

This screen shot shows Brian J. Miller, MD, MBA, MPH, during his testimony in the hearing, “Burdensome Red Tape: Overregulation in Health Care and the Impact on Small Businesses,” held July 190, 2023, by the House Small Business Subcommittee on Oversight, Investigations, and Regulations

“What does consolidation look like?” Miller said. It raises prices, lowers quality, results in a worse patient experience, and crushes small business, he said.

Miller used the example of a contract dispute involving a hospital system and an insurance company, but at a deeper level, it showed monopolistic business practices allow companies to “beat up on other businesses,” and even the government, he said.

“I sort of argue that we did this to ourselves, it’s sort of our fault,” Miller said. There was a successful move to ban physician ownership and operation of hospitals, now hospital ownership is concentrated in 90% of America’s metropolitan areas. Physicians may not own integrated care delivery, but large-scale health systems have bought everything from clinics to home care.

Practices that remain open are regulated into the ground. The U.S. Centers for Medicare & Medicaid Services have 2,466 quality metrics, so a diet is needed, Miller said.

A graduate of Northwestern University, Miller said that medical school offers all kinds of advanced care, but its huge size makes it hard to navigate. Small practices are important because they offer greater customization of care and customization of the process of care delivery, he said.

Doctors need time with patients

What do government agencies monitoring health care have in common? Physicians surrounded by red tape, said Henry Anthony Punzi, MD, FCP, FASH. An internal medicine private practitioner since 1984 and clinical researcher since 1986, Punzi has worked with pharmaceutical companies and the National Institutes of Health, along with other government regulators.

This screen shot shows Henry Anthony Punzi, MD, FCP, FASH, during his testimony in the hearing, “Burdensome Red Tape: Overregulation in Health Care and the Impact on Small Businesses,” held July 190, 2023, by the House Small Business Subcommittee on Oversight, Investigations, and Regulations.

For many physicians, medicine has lost what made it desirable, Punzi said. The key for a physician in private practice is time with patients, now rushed into 15-minute visits crammed with patient histories and examinations. He described anecdotal evidence training medical students and, with a cousin, encountering a physician facing the electronic health record monitor instead of the patient during an appointment.

Prior authorizations cause patients to delay or avoid care, which drives up costs of health care Punzi said, describing a patient who waited 2 ½ weeks for approval for an MRI to diagnose a fractured bone in her right foot.

“Those are things that we see on a day-to-day basis in my practice and in many practices,” Punzi said. “I think the key here is that we have to be allowed to talk to the patient.”

That allows physicians to make the correct diagnosis, which in turn lowers health care costs, he said.

Three reforms

Health care providers interact with insurers and payers in many ways, such as negotiating contracts, prior authorizations, submitting claims, and reporting on quality of care. Those activities all are costly, said Matthew Fiedler, PhD, a health economist and senior fellow of the Schaeffer Initiative for Health Policy of the Brookings Institution.

This screen shot shows Matthew Fiedler, PhD, during his testimony in the hearing, “Burdensome Red Tape: Overregulation in Health Care and the Impact on Small Businesses,” held July 190, 2023, by the House Small Business Subcommittee on Oversight, Investigations, and Regulations.

Insurance-related administrative costs consume 13% of physicians’ revenues a year, totaling hundreds of billions of dollars. The end result is higher costs for patients and taxpayers, Fiedler said. Due to economies of scale, the burdens are harder for smaller practices than larger ones, he said.

Fiedler suggested three targeted reforms:

• Eliminate the Medicare merit-based incentive payment system (MIPS), which is meant to encourage high clinician performance. The administrative burden is costly and, because physicians choose which criteria to be evaluated on, make it difficult to compare quality across providers. There is little evidence it is improving care.
• Changing how provider-insurer payment disputes are resolved under the No Surprises Act. Using arbitration to settle disputes for out-of-network care is costly to physicians and their insurers. Congress could eliminate arbitration and set benchmark payment rates.
• Improve the Medicare Advantage (MA) risk adjustment system, which spurs plans to document ever more enrollee diagnoses. This increases payments to MA plans, and the MA plans often enlist providers to search for diagnoses, which increases their administrative burdens.

MGMA response

The Medicare merit-based incentive payment system (MIPS) and advanced alternative payment models “contain specific policies that increases administrative burden, without adding value,” said written testimony from Anders Gilberg, MGA, senior vice president, government affairs, for MGMA.

One 2019 study found physicians spent more than 53 hours a year on MIPS requirements, time that could be used to see an additional 212 patients a year, and cost $12,811 per physician to participate, Gilberg said. In the past 20 years, Medicare physician payment has been cut by 26%, he said, citing a study by the American Medical Association.

Inflation and staffing shortages are problems, along with prior authorization requirements now “routinely identified by medical groups as the most challenging and burdensome obstacle to running their practices and delivering high-quality care,” Gilberg wrote.

Pending legislation

The House Energy and Commerce Committee had a full markup of 15 health bills dealing with a range of health care issues.

Chair Rep. Cathy McMorris Rodgers, R-Washington, cited the Support for Patients and Communities Reauthorization Act, which would reauthorize parts of the SUPPORT Act. It includes public health programs focused on prevention, treatment, and recovery for patients with substance use disorder, and a permanent extension of Medicaid’s required coverage of medication-assisted treatments, according to the official summary. The Subcommittee on Health this month forwarded the bill to the full committee.

Those are “a number of key bipartisan wins,” such as help for people in the criminal justice system and caring for foster youth in need.

Committee Ranking Member Rep. Frank Pallone Jr., D-New Jersey, agreed on the bipartisan support for that legislation. But he ripped Republicans for failing to work for consensus reauthorization of the Pandemic and All-Hazards Preparedness Act.

“I believe I believe that is dangerous considering we have just witnessed first-hand with COVID-19 how important pandemic response is,” Pallone’s opening statement said. “It should not be partisan, and we should be working together to protect the health and well-being of the American people.”