Increased commercialization within healthcare should be tempered with “guardrails” to ensure the industry continues to focus on patients’ care quality first, according to a new policy paper from the American College of Physicians.
The paper, published Tuesday in the Annals of Internal Medicine, warns the increased prevalence of more profit-motivated entities within the medical field runs the risk of creating “a bloated, complex and fragmented healthcare system,” which pits the desire of caretakers to provide quality patient care against the corporate need to generate better margins.
“We need to be sure that profits never become more important than patient care in the practice of medicine,” said Dr. Thomas Cooney, chair of ACP’s board of regents in a statement.
ACP acknowledged there was a need for more research to assess the full influence and impact of for-profit companies and corporatization in the healthcare market.
For-profit entities, particularly private equity firms, have increased their presence within healthcare over the past two decades. From 2003 to 2017, private equity firms closed 42 deals that acquired more than 280 hospitals, according to a Health Affairs analysis published in May.
ACP recommended lawmakers move forward with a public option or single-payer model to deter commercial interests. The group’s single-payer advocacy is in stark contrast to the American Medical Association, which has opposed proposals for a “Medicare-for-All” type system in favor of expanding the Affordable Care Act to cover more uninsured individuals.
ACP also called for requiring not-for-profit hospitals to provide measurable community benefits and to show the amount they spend is in line with the value of the tax exemption they receive from their not-for-profit status. Many of the largest not-for-profit health systems have come under criticism for their community benefit spend, with some saying it is only a fraction compared to the financial benefits they receive from having tax-exempt status.
The Lown Institute recently found 72% of 2,400 not-for-profit hospitals studied spent less on providing free or discounted care and community investment programs than the value of their tax breaks.
“Providing high-quality care needs to remain paramount in all of our interactions with patients,” Cooney said.
The physician group recommended having all Medicare-participating hospitals adopt fair pricing and billing policies, and for public authorities to evaluate all mergers, acquisitions and buy-outs involving healthcare entities for their potential impact on communities to determine whether those transactions might reduce healthcare access or increase patient costs.
“Physicians, hospitals and other healthcare organizations can, and should, earn a reasonable income as long as they are fulfilling their responsibility to provide high-quality patient care,” Cooney said. “We just need to have the appropriate guardrails in place to protect against outsized influence of profits.”