The Impact of Corporate Medicine

by Courtney Pokallus and Bob Kieserman

In 1990, there were 6,650 hospitals in the United States. In 2016, there were 5,530. That is because around 2010, a new chapter in healthcare management began to take place. Between 2010 and 2017, the country saw the growth of hospital systems with major hospitals in various regions of the country buying smaller hospitals and/or merging with similar size hospitals to form large regional healthcare systems. And as part of the game plan of the hospital systems to become the major supplier of healthcare, doctors in private practice were approached to sell their practices to the healthcare systems. At first, many doctors, especially older very established private practitioners, resisted, but the offers by the hospital systems were so lucrative, that the doctors accepted the offers. Some of the older doctors retired at that point, while others who wanted to continue to practice medicine became employees for the first time in their medical careers. For those doctors, life became very different. No longer were the doctors making decisions about the business operations of their practices. That now became the responsibility of the hospital systems who took over. The doctors were employees and their job was just to practice medicine. The hospital systems took care of everything else.

At the same time, the hospital systems placed many protocols on the doctors and their staffs. Important protocols like how much time a doctor should spend with a patient, how many patients the staff needs to schedule in a certain day, whether a patient should see a doctor or a physician assistant or a certified nurse practitioner, and many other rules that became the universal protocols of all system-owned offices. At the same time that the not for profit hospital systems were growing, for-profit healthcare corporations who owned hospitals and created their own network of employed doctors were quietly increasing in number. Over the past two years, the hospital systems and these for-profit corporations have continued to grow even larger. This has been called the rise of corporate medicine. The big question is whether this change has benefited the patient or whether it has not.

The Presence of Healthcare Corporations

A recent study by the Physician Advocacy Institute and Avalere Health, a consulting firm, found that the pandemic actually accelerated this trend of corporate medicine companies acquiring physician practices with over 25,000 physicians leaving their private practices and joining these hospitals and companies since the pandemic began. It is estimated that in the beginning of 2021, nearly 70% of physicians were employed with just 3 out of 10 doctors still practicing independently.

The Doctors Are Not Happy

Late last year, the Physicians Advocacy Institute sent an open letter to members of Congress to warn against this “major shift toward the corporatization of healthcare”. According to the open letter, if Congress did not take action to monitor the activities of these big hospital systems and prevent them from reducing the clinical autonomy of doctors to provide high-quality, cost effective care for patients, this could have major implications for the overall American healthcare system and definitely affect the welfare of patients across the country.

This is the real issue. With the change of how healthcare is delivered, under the model of corporate medicine, doctors have lost the ability to practice medicine as they were trained to do and to make clinical decisions for the good of the patient, and not for the good of the bottom line of the companies that now own their offices.

An article titled Financial Profit in Medicine: A Position Paper From the American College of Physicians brings up multiple points about corporate medicine and its effects on patient-centered care and the patient/physician relationship.

The article relates that “in 2013, neurosurgeon Russell J. Andrews blamed the nation's health care crisis on two factors: the erosion of the patient–physician relationship, in which physicians take personal responsibility to ensure that patients receive the best possible care, and the transition from medicine as a humanitarian function of society to a revenue stream for healthcare professionals, drug and medical device companies, hospitals, and insurance companies”

We believe that these two factors go hand in hand. From the way the healthcare system in the United States has evolved, it seems that the only way we have arrived at this revenue centered system is by deteriorating the patient-physician relationship. There is no other way to make the amount of money that hospital systems are making other than compromising on the way physicians are able to take care of patients. To many patients, it seems like physicians are always running around, overbooked and only able to give each patient a few minutes of their time. A doctor cannot possibly resolve a patient's concerns correctly when the doctor is only allotted a small amount of time with each patient. Physicians are taking on many patients at one time mostly for the reason that more patients at a time means more money coming into the office. This system has destroyed the patient-physician relationship in the name of generating more money.

The paper also states that “the American health care system of the 21st century resembles the medical-industrial complex that drew Arnold Relman's concern in the 1980s. What many imagine to be a lean, market-based system is actually bloated, complex, and fragmented, increasingly directed toward generating profit. The same profit motive that can encourage new thinking and innovation can also cultivate the profit-over-patients orientation warned of in medicine's historic oaths and professional guidelines. Ultimately, professionalism, medical ethics, and the patient–physician relationship must guide how physicians navigate the business side of medicine. Nonprofits must act like nonprofits and have a community-oriented mission. Likewise the private equity firms and investor-owned healthcare organizations must focus on the needs of patients and not just shareholders. Most importantly, physicians should not have a financial stake in an organization with which they have a referral relationship.”

When you think about it, the amount of money being made could be used to further expand our healthcare system, creating new devices, new treatments that can further help the patient. It is true that we have scientists who are innovating new ways of healthcare, but the large hospital systems are not the ones doing the innovating. There are some hospitals that are renovating and changing the ways hospitals are supposed to look, from gloomy and cold to looking like a spa, but unfortunately there are not many hospitals doing that. Most keep the uncomfortable chairs, vinyl flooring and white walls, not expanding and innovating new ways to do healthcare. They are only overbooking physicians, causing them to burnout, leading to a strained relationship between patient and physician, all for the purpose of funding corporate greed.

Hospital systems need to be putting their efforts into improving the way healthcare is provided in their facilities. In order to reach a system of better quality healthcare, there needs to be an implementation of innovative and new techniques to enhance the patient and physician experience. We need to move away from the current system that we have in place, overworking physicians and underwhelming patients, in order to change the way that patients are given healthcare and overall enhance the healthcare system.

How This Affects Patients

And so, we see that the big hospital systems and the for-profit healthcare companies, because they are seeking high financial returns  in  reimbursements  and  fees  for  service,  have pressured their employed doctors to see patients more often for followup visits, order more tests that the third party insurance companies will pay for, and a push for virtual visits rather than live in-office visits, since they can charge the same for a virtual visit as they do for an in-office visit, but the virtual visit usually ends up being shorter and easier for the doctor. In addition, practices are being told to schedule more appointments with the physician assistant or the certified nurse practitioner instead of with the doctor, but charge the same for the visit.

The increase in physicians being employed by hospitals has proportionately compromised the patient-physician relationship. This shift has caused a huge change as patients are not the top priority anymore, making money is. Many of the hospital systems that took over the small practices are investor owned. These for-profit hospitals also tend to be more expensive and charge at higher rates than Medicare, but have a larger proportion of uninsured patients compared to non-for-profit healthcare centers. This means they predominantly care about making as much money as possible, not the care of the patients. The change has caused patients to get less time with doctors, less quality of care and an overall higher costing service. The patient-physician relationship is vital to having a good patient-centered care system, but this relationship and patient-centered practice has been damaged since the influx of hospital systems. Patient-centered care focuses on both a healthy practice for the patient and for the physician. This includes improving access to care, preventing burn out for the physician, integrating family and patient into healthcare decisions and overall improving the visit for both patient and physician. This corporate medicine approach has not only added cost to healthcare, but deteriorated the patient-centered ideals that are crucial to a seamless experience for everyone involved.

Patients have also complained that doctors spend more time looking at the computer during a visit, than talking to the patient and examining them. This is due to new protocols connected with the use of electronic medical records. Because many offices are scheduling three patients or more for the same appointment time, the doctor is rushed and in some cases, no longer fully examining a patient, as they once did. We have come to learn and appreciate that the doctors are not happy with the situation. They are doing the best they can, but they know they are not giving their patients the same personal attention they once did. In some cases, this new way of practicing medicine has caused physician burnout with many excellent doctors retiring earlier than planned or leaving medicine altogether and getting into a different career path. For many older patients, in particular, the doctors who have cared for them for decades, are deciding they have had enough, and are retiring, leaving the older patients to find new doctors and start new relationships late in life, when they need doctors the most.

What Can Patients Do?

There are really two major things patients can do to help the situation. The first is to be understanding and verbally support your doctors. Tell them how much you appreciate them, tell them that you understand they are under new pressures that they never had before, and try to be less demanding on what you know should be, but just can’t be right now. The other thing that patients can do is to let the hospital systems and/or the healthcare companies know that you value your doctors and that they need to give as much autonomy to the doctors as they need to practice medicine the way the doctors want for the benefit of their patients. Patients can make a difference. The large systems and corporations are big on surveys. They send them out all of the time, especially after an office or virtual visit. Be sure to be honest about your experiences and let them know that doctors, even though they are now employees, need to be able to practice medicine with full decision making powers, deciding what is best for the patient including what tests need to be ordered, what specialists they need to see, how often they need to return for followup visits, and how necessary it is for certain medications to be prescribed or not prescribed.

Corporate medicine has changed the way healthcare is delivered. As healthcare has shifted to more of a business structure than patient centered, it is taking time away from patients just to squeeze in more patients to make more money. In order to make it a more efficient system for both patients and staff, we need to restore the patient-physician relationship and ensure that all parties, both the providers and the patients, are content in the way treatment is delivered.