Anticompetitive Practices in Health Care Threaten FPs, Says AAFP

April 09, 2014 03:50 pm News Staff

Consolidation among health care institutions is reducing competition nationally, and the independence of many family physician practices is being threatened, according to a recent letter the AAFP sent to the Federal Trade Commission (FTC).

[Stock photo of doctor talking to his female senior patient at the office]

The FTC recently hosted a conference( that addressed how regulations affect competition in the health care marketplace. In response to the conference topic, the Academy sent a letter to FTC Chairwoman Edith Ramirez, J.D., expressing concerns about economic issues that affect family physicians. The letter addresses three main topics: public safety, hospital mergers and insurance consolidation, and it asks the FTC to be more vigilant about controlling the growing influence of large hospitals and insurance companies.

In effect, the AAFP is concerned that competition and consolidation are taking precedence over patient safety and choice. In select markets, a single insurance company can wield tremendous power, and that company's dominance could force physicians to join its network, said the AAFP. Large hospital systems are expanding by merging with smaller health systems or buying small physician practices. Both developments are limiting the ability of family physicians to practice, according to the AAFP.

In some states, officials are allowing medical professionals other than physicians to provide additional services with the goal of increasing competition. This policy could lead to an expansion of medical services that are delivered by individuals who are not adequately trained, said the Academy. "While all health care professionals -- physicians and nonphysicians -- play an important role in providing quality health care to consumers, they are not the same and their skills are vastly different based on their levels of education and training."

State medical boards and other state and federal health regulators are the appropriate agencies to judge medical competency issues. Public safety and ensuring that medical care is delivered by properly trained individuals are more important than expanding the market to provide greater access to some medical services, in the Academy's view.

As hospitals continue to merge with health systems, the AAFP expressed concern that access is reduced for patients in areas where they have limited or no choice in selecting a physician or a health facility based on their insurance coverage. Some physicians are under pressure to join a hospital or a health network in markets where a single medical institution dominates the market.

Large insurance carriers are becoming more involved in Medicare and the new insurance marketplaces that were introduced as part of the Patient Protection and Affordable Care Act. Their influence is growing nationally, and their policies could have a negative effect on patient care.

Patients are discovering that their primary care physician may no longer be part of their insurance network. Some insurers are choosing to reduce their networks by eliminating physicians, and such actions limit choice for patients and actually decrease competition in the marketplace.

"In many markets, a single insurance company may be the dominant market force for the employer, individual, health insurance marketplace, Medicare Advantage and Medicaid populations," said the letter. "This situation allows insurers to control, if not manipulate, the physician workforce in those marketplaces."

As a result of consolidation, there may no longer be multiple insurance companies in a single market; thus, a small number of insurers are establishing a stronghold in select markets, especially in regards to reimbursement rates for physicians, according to the AAFP. "More concerning is the consolidation and expansion of the plans offered, which allows insurers to narrow their networks by only contracting with those physicians who are willing to accept the lowest levels of payments for their services."

The Academy is asking the FTC to devote resources to ensure that such anticompetitive practices are reduced so patients have options regarding choice of physicians and medical facilities.

The AAFP will provide additional feedback on competition in response to the commission's request for comments on the issue in the Federal Register(