Hospitals defend physician employment model amid FTC scrutiny

When it comes to healthcare consolidation, hospitals are standing their ground, maintaining that physician practices merging or affiliating with larger hospitals is necessary to coordinate care across the continuum, AHA News Now reported.

In response to a New York Times article, the American Hospital defended hospitals' employment of physicians, in recent letters to the editor.

"Care coordination aren't just buzzwords," said AHA President and CEO Rich Umbdenstock, but rather the product of multiple forces driving hospital and physician integration.

For example, collaboration and electronic medical records, mandated under the Affordable Care Act, and changing reimbursement models have pushed hospitals to team up with other facilities and physician practices.

Practicing physicians also chimed in, calling hospital-doctor consolidation "appropriate and inevitable" but cautioned against partnerships that put volume ahead of value.

In the letters, the American Medical Association called for increased scrutiny from the Federal Trade Commission over processes that stifle competition and hurt care quality. According to AMA President Jeremy Lazarus, the Medicare physician payment formula is not only outdated but also prevents physician-led, coordinated care.

Healthcare consolidation is already coming under fire, as several recent mergers ended up in court. Similarly, healthcare consolidation in California has faced increased scrutiny, with the state attorney general looking into whether hospital-physician partnerships are driving up prices in a way that violates antitrust laws.

For more:
- here's the AHA News Now brief
- read the letters to the editor