Doggett Opening Statement at Health Subcommittee Hearing
(As prepared for delivery)
Thank you, Mr. Chairman, for today’s hearing on increasing consolidation in health care and the challenges independent physicians face. My father was in solo dental practice and I remember the personalized care he offered our community.
Today’s health care system looks dramatically different with over 70% of physicians now employed by a health care system or corporate entity. This consolidation is creating greater obstacles for the few remaining independent providers struggling to compete and has significant implications for taxpayers and patients.
There are many challenges doctors are facing to remain in private practice. While I agree that doctors are sometimes over-regulated, the regulator seems to be private insurance Medicare Advantage plans. MA plans continue to interfere with the doctor-patient relationship through burdensome prior authorization requirements, step therapy, and other management tools.
Intended to reduce unnecessary health care utilization, these tools often lead to delays and denials of urgent medical care. One study found 82% of denials that were appealed were ultimately overturned and found to be necessary and appropriate. Small practices are struggling to file all of the prior authorization requests MA plans are requiring. They do not have the resources to appeal the many unjustified denials.
For the care that is delivered, many physicians face inadequate payment. Medicaid reimbursement in my home state of Texas and elsewhere is woefully insufficient. And we all know well the Medicare Physician Fee Schedule is a source of stress each year. Shockingly, private MA plans frequently provide lower payments than Traditional Medicare.
Yet, in an upside-down system, Medicare Advantage is being dramatically overpaid, $84 billion in wasted taxpayer dollars this year alone, yet they are not required to reimburse doctors at least as much as Traditional Medicare does. With MA now providing coverage for over half of beneficiaries, doctors are being squeezed further.
As recommended by the independent Medicare Payment Advisory Commission, an inflation update to Traditional Medicare payments should be approved. But we must find an acceptable way to pay for this expensive reform. We must also recognize an inflation update is not a panacea.
Private MA plans will continue to distort the payment system and with the vast majority of physicians now employed, the Physician Fee Schedule is irrelevant for most. We must strike a balance to protect the long-term solvency of Medicare and also hold MA plans accountable for appropriately reimbursing providers.
Payment tweaks alone will not address what is already a broken market. Due to lack of antitrust enforcement, nearly 80% of metropolitan areas have highly concentrated physician markets.
Vertical consolidation is creating immense challenges as independent doctors are forced out-of-network by insurance plans that are buying up hospital systems and physician practices. Independent doctors struggle to compete with these consolidated groups and their immense resources. Meanwhile, these massive companies rake in more profits hidden as costs.
For many independent practices, private equity is often seen as the great savior. For a physician struggling to compete with a major health group, it is easy to understand the allure of a PE buyout and quick cash infusion. PE may help some of these practices, but too often any benefit is solely to the senior physicians about to retire. In my hometown of Austin, I’ve seen the aftermath of these buyouts. Junior associates, nursing staff, and administrative support teams are fired. Prices increase and doctors are pressured to prioritize profits over patient care. Practices either go bankrupt or are bundled until you have one major physician group.
I look forward to today’s discussion on the many anticompetitive behaviors that have gone unrestrained for too long and how best to advance a fair, just, and affordable health care system that supports doctors and their patients.
###