Feature in Media

Richard Scheffler and Steven Shortell’s letter-to-the-editor and paper “The Seven Percent Solution: Costing and Financing Universal Health Coverage in California” was featured in a February 24th opinion piece in the New York Times. The letter addresses the possibility to implement universal care in California via a public/private model. Given that Medicare-for-All will be in the spotlight during the 2020 election, it is important to consider alternatives to achieving universal coverage.

To see the full letter, click here

In a December 27th article published in the Wall Street Journal, the Petris Center contributed an analysis demonstrating the growing trends for physicians being employed by hospitals rather than by medical groups or independent practices, seen in a graphic in the article. The article provides insight into the increasingly higher costs of care when provided by a hospital group as compared to a doctor’s office. It also points to doctors referring their patients to hospitals that they are affiliated with, despite the higher costs for not only the insurer, but in out-of-pocket costs for patients. This article describes the growing trend of hospital acquisitions of physician groups and the resulting increase in prices for patients, but it mainly focuses on the knowledge asymmetry of doctors referring patients to a more expensive option they are affiliated with and often times are “required” by their employer to recommend.

Read the full article here

Health Affairs article by Brent D. Fulton, Petris Center, UC Berkeley 

In a November 14th article by Reed Abelson of the New York Times, the Petris Center provided analysis that forms the basis of the piece’s discussion of hospital mergers and their effects on consumer prices. The article relies on data and case studies that compare regions with varying levels of hospital consolidation and how the prices in that hospital changed in relation to averages for the area. Ultimately, the article shows that these increased trends toward consolidation are costing patients more, as demonstrated in studies of metropolitan areas throughout the Northeast, Pacific Northwest, South, and Texas.

Although California metropolitan areas are not featured in the article itself, this research plays an important role in the state, with CA Attorney General Xavier Becerra claiming that one has to “watch for these systems throwing their weight around… we are looking for cases where consolidation does nothing for efficiency and leads to distortions of the market.” Earlier in 2018, Becerra’s office moved to sue Sutter Health, a sprawling system in the northern part of the state for these very reasons.

The article also discusses merger volume trends in both hospitals and the acquisition of physician medical groups, which Petris Center Director Dr. Richard Scheffler argues is a crucial factor that causes “prices to rise even more steeply.” Scheffler continues to describe the “enormous impact” of sharing a large market in a metropolitan area, when large hospital systems exert their market influence.

Read the full New York Times article here.

A recent article by the Daily Californian, “UC Berkeley study finds link between hospital consolidation, higher prices for patients,” cites the Petris Center’s September report that shows an association between a rise in ACA premiums and increasing hospital consolidation in Northern California.

The piece quotes Petris Center Director Dr. Richard Scheffler and shows that the “price increases that we document in this study have real relevance for the Berkeley community,” and that hospital consolidation in the Bay Area has led to “many physician groups now owned by hospitals or health systems.” Scheffler’s comments indicate that more attention from regulators and legislators is key in the future.

Check out the rest of the Daily Cal article here.

Read the full Petris report here.

This week, Petris Center Director Dr. Scheffler was quoted in the San Francisco Chronicle, “Bay Area doctor’s legal fight highlights medical industry pressures,” which detailed one doctor’s struggles with an increasingly consolidated health care system. Recently, the Petris Center released a new report in Health Affairs called “Consolidation Trends In California’s Health Care System: Impacts On ACA Premiums And Outpatient Visit Prices,” which deals directly with these pressures intensifying in California. The SF Chronicle article describes this doctor’s legal battle with her former hospital, then moves to a broader discussion of the current health care market, citing Dr. Scheffler.

“A health care system looks at cost and productivity, not just the care of the patient. It changes everything because the system has to deal with costs, improve productivity, it’s owned by the hospital and they want to tell (doctors) to do more so they can bill more. There’s nothing ethically wrong with that, but it does conflict with the autonomy of doctors, who are used to calling their own shots.”

This article was also featured as part of California Healthline‘s “As Hospitals Acquire Doctors’ Practices, Physicians Worrying Quality Of Care Is Taking Back Seat To Productivity,” highlighting market trends and the impact of stress that experts say “physicians across the country are feeling as consolidation ramps up.”

Read the whole San Francisco Chronicle story here.

Take a look at the full Petris Center report in Health Affairs here.

This month Health Affairs published a new Petris report, “Consolidation Trends In California’s Health Care System: Impacts On ACA Premiums And Outpatient Visit Prices.” Since, the study has been referenced heavily in recent days in such places as the San Francisco Chronicle, Modern Healthcare, California Healthline, and the American Journal of Managed Care, the last of which provided clear and concise analysis of the report, describing Petris’s use of “hot spots” to assess heavily concentrated markets in California. The report itself focused on trends, by both vertical and horizontal integration, towards a heavily-concentrated health care market in California and their impact on prices.

The San Francisco Chronicle quotes Petris Center Director Richard Scheffler that practices of hospitals buying physician groups are not “illegal,” but that there is a “potential branding effect” where “people are willing to pay more, insurance companies like to have that in their plan, and they charge more for it… You don’t see it, but the cumulative effect is higher premiums and higher prices.” Read the whole story here.

Modern Healthcare continues citing Scheffler, who says that “the impact of these type of verticals is much more powerful when the hospital itself has a lot of market power and can jack up prices.” They also quote Scheffler in describing some of the challenges in solving these problems in that “the problem is that they can’t make a simple ruling because they don’t have any vertical integration guidelines or even a good theory of verticals.” Follow up on the whole article here.

California Healthline also weighs the difficulties in assessing these impacts. They reference Scheffler’s claim that although many many acquisitions of physician groups by hospitals are small-scale, adding them up leads to clear impacts on outpatient prices and Affordable Care Act premiums, preferring to call it “conglomerate care.” Read the whole story here.

 

 

The Petris Center’s research on health care market concentration was cited today in the Wall Street Journal article “Why Americans Spend So Much on Health Care—In 12 Charts.” As the article explains, one reason health care prices are rising is due to increasing concentration across health care markets, particularly hospital markets.

You can read the full article on the Wall Street Journal’s website here.

To learn more about our findings on market concentration research, seem our recent blog on the Commonwealth Fund’s website “Market Concentration Variation of Health Care Providers and Health Insurers in the United States”, or visit our market concentration project page here.

In an article discussing expanded care in a new San Francisco hospital, Petris Director Dr. Richard Scheffler was quoted regarding the general trend of hospitals in California towards maternity care in general. The article, titled “SF’s newest hospital to expand maternity care, end long-term nursing,” appeared in the San Francisco Chronicle on July 29th, 2018.

According to Scheffler, “There’s big bucks in babies, hospitals know that,” Scheffler said. “I think this is a good thing, by the way. The more hospitals available in the Mission that can deliver babies, the better. … We get some form of increased competition. If it also happens to make money for them, this is America. This is the American health care system.”

He continues to state that moving subacute care out of hospitals is a “positive development,” and that “long-term stays in hospitals can increase the chances of contracting a serious illness such as pneumonia, which can be particularly dangerous for older patients.”

Dr. Scheffler concludes by claiming that the more services that can be performed out of the hospital, the “better off the patient is, and it’s good for our bank account. I’m in favor of moving things out.”

You can read the full SF Chronicle article that features his comments here.

Petris Center Research Director Dr. Daniel Arnold was quoted in the East Bay Express’ July 11th article, “Surviving in a Hospital Desert.” The article explores the impending closure of emergency services at Alta Bates in Berkeley and the consequences it has for communities in the East Bay, especially Richmond. In the article, Dr. Arnold discusses the role of California’s “managed care revolution” and the merging of hospitals and health systems in hospital’s financial woes, and ultimate closures.

You can read the full article on East Bay Express’s website here.