[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
THE COLLAPSE OF PRIVATE PRACTICE:
EXAMINING THE CHALLENGES FACING
INDEPENDENT MEDICINE
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HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
MAY 23, 2024
__________
Serial No. 118-HL04
__________
Printed for the use of the Committee on Ways and Means
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
__________
U.S. GOVERNMENT PUBLISHING OFFICE
56-472 PDF WASHINGTON : 2024
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COMMITTEE ON WAYS AND MEANS
JASON SMITH, Missouri, Chairman
VERN BUCHANAN, Florida RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona JOHN B. LARSON, Connecticut
DARIN LaHOOD, Illinois EARL BLUMENAUER, Oregon
BRAD WENSTRUP, Ohio BILL PASCRELL, Jr., New Jersey
JODEY ARRINGTON, Texas DANNY DAVIS, Illinois
DREW FERGUSON, Georgia LINDA SANCHEZ, California
RON ESTES, Kansas TERRI SEWELL, Alabama
LLOYD SMUCKER, Pennsylvania SUZAN DelBENE, Washington
KEVIN HERN, Oklahoma JUDY CHU, California
CAROL MILLER, West Virginia GWEN MOORE, Wisconsin
GREG MURPHY, North Carolina DAN KILDEE, Michigan
DAVID KUSTOFF, Tennessee DON BEYER, Virginia
BRIAN FITZPATRICK, Pennsylvania DWIGHT EVANS, Pennsylvania
GREG STEUBE, Florida BRAD SCHNEIDER, Illinois
CLAUDIA TENNEY, New York JIMMY PANETTA, California
MICHELLE FISCHBACH, Minnesota JIMMY GOMEZ, California
BLAKE MOORE, Utah
MICHELLE STEEL, California
BETH VAN DUYNE, Texas
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio
Mark Roman, Staff Director
Brandon Casey, Minority Chief Counsel
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SUBCOMMITTEE ON HEALTH
VERN BUCHANAN, Florida, Chairman
ADRIAN SMITH, Nebraska LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania MIKE THOMPSON, California
BRAD WENSTRUP, Ohio EARL BLUMENAUER, Oregon
GREG MURPHY, North Carolina TERRI SEWELL, Alabama
KEVIN HERN, Oklahoma JUDY CHU, California
CAROL MILLER, West Virginia DWIGHT EVANS, Pennsylvania
BRIAN FITZPATRICK, Pennsylvania DANNY DAVIS, Illinois
CLAUDIA TENNEY, New York DON BEYER, Virginia
BLAKE MOORE, Utah
MICHELLE STEEL, California
C O N T E N T S
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OPENING STATEMENTS
Page
Hon. Vern Buchanan, Florida, Chairman............................ 1
Hon. Lloyd Doggett, Texas, Ranking Member........................ 2
Advisory of May23, 2024 announcing the hearing................... V
WITNESSES
Dr. Jennifer Gholson, Family Practitioner, Summit, Mississippi... 4
Dr. Timothy Richardson, Independent Physician, Wichita Urology... 16
Ms. Chris Kean, COO, The San Antonio Orthopaedic Group........... 29
Dr. Seemal Desai, Founder, Innovative Dermatology................ 38
Dr. Ashish Jha, Dean, Brown School of Public Health.............. 48
MEMBER QUESTIONS FOR THE RECORD
Member Questions for the Record and Responses from Dr. Jennifer
Gholson, Family Practitioner, Summit, Mississippi.............. 104
Member Questions for the Record and Responses from Dr. Timothy
Richardson, Independent Physician, Wichita Urology............. 107
Member Questions for the Record and Responses from Ms. Chris
Kean, COO, The San Antonio Orthopaedic Group................... 110
Member Questions for the Record and Responses from Dr. Seemal
Desai, Founder, Innovative Dermatology......................... 117
PUBLIC SUBMISSIONS FOR THE RECORD
Public Submissions............................................... 120
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THE COLLAPSE OF PRIVATE PRACTICE:
EXAMINING THE CHALLENGES
FACING INDEPENDENT MEDICINE
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THURSDAY, MAY 23, 2024
House of Representatives,
Subcommittee on Health,
Committee on Ways and Means,
Washington, DC.
The subcommittee met, pursuant to call, at 9:02 a.m. in
Room 1100 Longworth House Office Building, Hon. Vern Buchanan
[chairman of the subcommittee] presiding.
Chairman BUCHANAN. Good morning. I want to thank our
witnesses for being here today to discuss the crucial issues
before us, the collapse of the private practice and the impact
it is having on patients, as well.
Americans across the country are hurt by skyrocketing
inflation from the past four years. I am a former business
owner, and I know firsthand how inflation harms small
businesses trying to benefit their communities. Physicians are
no different. Nearly 90 percent of the medical groups reported
increased operating costs last year, according to the Medical
Group Management Association. Physicians' costs increased by
over 63 percent from 2013 to 2022, making it harder to run a
business, let alone their own practice.
During the same timeframe, Medicare's formula for
calculating physician payments has increased by only 1.7
percent. In fact, the--adjusted for inflation, the practice
cost--Medicare physicians' pay rate plummeted 29 percent over
the past 2 decades, with large changes year over year. So how
can we get doctors to afford to stay in private practice when
their costs are skyrocketing, their reimbursement rates
continue to get cut?
Many times, physicians are forced to sell their practice or
consolidate, and with a larger system stay afloat. Let me be
clear. Whether or not to sell a practice should be the choice
of the physician based on what works best for them, their
family, their practice, and their patients. They should not be
forced into a practice consolidation.
And I will just tell you myself, as a businessperson for 30
years before I got here, I started, my wife and I, a small
business. It was the American dream. We created 5,000 jobs from
nothing as a couple of blue-collar kids. So a lot of times that
leads to other opportunities. I am not saying that is good or
bad or indifferent, but that is just my story. But there is
other stories like that. So when I hear people are getting
crunched in terms of whether they can even stay in practice, I
don't like hearing that. But I will talk more about that today.
Further, I am concerned that our--being transformed from
entrepreneurs into employees. According to American Medical
Association, the AMA, between 2012 and 2022 the share of
physicians working in private practice fell by 13 percent
compared to 3 decades ago, where there were--there are now 30
percent fewer physicians in private practice. A thriving health
care ecosystem should be included in a balance of large health
systems and small, local, mom-and-pop practices.
Back in the day, it was much easier and less expensive for
young doctors coming out of medical school to start a practice
in their hometown. Now, when I talk to young doctors coming out
of medical school, many of them tell me it is too expensive of
an endeavor, and they would rather work for a larger system,
where they can collect a steady paycheck and not worry about
the increasing administrative burdens associated with running a
practice.
Another issue I continue to hear from our docs is the
growing rate of frivolous lawsuits against medical--the medical
community. AMA analysts show that in 2019 medical liability
premiums increased by 27 percent, almost double the rate from
2018. Between 2020 and roughly 2022, 30 percent of premiums
increase year to year. I am extremely worried about the
pressure the trial bar is putting on physicians, at least in my
state. I can talk about that, and then I hope that we can talk
about what it costs, defensive medicine, and many of the
doctors that are surgeons, maybe they are 60, they are leaving
their practices early because they don't want to take the
potential risk.
Chairman BUCHANAN. With that I look forward to the
discussion today. Now I recognize the Ranking Member Doggett
for his opening remarks. Thank you.
Mr. DOGGETT. Well, thank you very much, Mr. Chairman. This
is an important set of issues that affects our health care
providers, and it affects the quality of health care.
I come at it from the experience of having a father who was
in solo practice as a dentist for about 35 years. I handled the
yard work and the cleanup around there, but I still meet a few
people who were children when he practiced who valued that
personalized care and remind me of it.
Today's health care system is so much different. I don't
think in any part of health care that kind of experience could
occur. There are so many barriers to entry and getting a
practice started and then maintaining it and so, we find today
over 70 percent of physicians who are employed by a health care
system or a corporate entity. This consolidation is creating
greater obstacles for the few remaining independent
practitioners who are struggling to compete, and has
significant implications for taxpayers and patients.
There are so many challenges. Your testimony, from
reviewing it, deals with a number of them that our physicians
are facing. And while I agree that physicians are sometimes
over-regulated, the regulator that seems to be interfering the
most for many comes in the form of private 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 that 82 percent of denials that were appealed
were ultimately overturned and found to be necessary and
appropriate care. But a small, independent practice that is
struggling to get a prior authorization request approved often
can't afford to go forward with the appeal.
For the care that is delivered, many physicians face
inadequate payment, and I know you will be discussing that.
Medicaid reimbursement in my home state of Texas is pitiful. We
all know well that the Medicare physician fee schedule is a
source of stress that we hear about each year. We are hearing
about it from health care practitioners across the country.
Private MA plans, however, frequently provide lower
payments than traditional Medicare, which is difficult to
believe. At the same time, in an upside-down system, Medicare
Advantage is being dramatically overpaid, $84 billion in wasted
taxpayer dollars this year alone. Yet, insurers are not
required to reimburse doctors at least the traditional Medicare
rates. With Medicare Advantage now providing coverage for over
half of Medicare beneficiaries, physicians are being squeezed
further.
As recommended by the independent Medicare Payment Advisory
Commission, MedPAC--sometimes the source of great concern and
criticism by health care practitioners--but on this issue they
say that approval of an inflation update is very important. We
must find an acceptable way to pay for that update. But I think
that an inflation update alone, though that is a priority of
physicians now, is not a panacea. That schedule has become
largely irrelevant if over half of the people covered by
Medicare are being handled through private Medicare Advantage
plans that distort the payment system.
We need to strike a balance to protect the long-term
solvency of Medicare, and hold these MA plans accountable for
appropriately reimbursing providers. Payment tweaks alone will
not address what is already a broken market.
Due to a lack of antitrust enforcement, nearly 80 percent
of metropolitan areas have highly concentrated physician
markets. Independent physicians are struggling to compete, as
they not only face a competing practice being taken over by
private equity, but the same forces leading to vertical
consolidation that use their immense resources to buy a
hospital system and physician practices forcing the few
remaining independent providers out of network.
For many independent practices, private equity can appear
to be a savior. For physicians struggling to compete with a
large health care group, it is easy to understand the allure of
these PE buyouts and quick cash infusion. Private equity may
help some of these practices, but too often any benefit is
solely to the senior physicians who may be about to retire. In
my hometown of Austin, I have seen the aftermath of these
buyouts. Junior associates, nursing staff, administrative
support teams are fired. Prices increase and doctors are
pressured to prioritize profits over patients. Practices either
go bankrupt or are bundled until we have only one physician
group covering a particular specialty.
I look forward to your testimony and our discussion on the
many anti-competitive behaviors that have gone unrestrained for
too long, and how best we can advance a fair, just, and
affordable health care system that supports our health care
practitioners and their patients.
Mr. DOGGETT. Thank you so much, Mr. Chairman.
Chairman BUCHANAN. Thank you. I am really excited. We have
got great witnesses today, you guys that are actually in the
trenches. Many of us up here haven't been where you have been,
and you are dealing with the reality, especially in the last 10
years or so.
So the witnesses: Dr. Jennifer Gholson out of Mississippi;
Dr. Tim Richardson, a private physician out of Wichita, Kansas;
Chris Kean, a private--she is a chief operating officer, so
that will be interesting, San Antonio, Texas--Dr. Desai from
north Dallas; and Dr. Jha from--with Brown University.
So Doctor, why don't we start with you, Dr. Gholson?
We will move this way. Five minutes each.
STATEMENT OF JENNIFER GHOLSON, MD, FAMILY PRACTITIONER, SUMMIT,
MISSISSIPPI
Dr. GHOLSON. Chairman Buchanan, Ranking Member Doggett, and
distinguished members of the subcommittee, thank you for the
opportunity to testify today. My name is Jennifer Gholson, and
I am a family physician from Summit, Mississippi. I am honored
to be here today representing the more than 130,000 physicians
and student members of the American Academy of Family
Physicians. My remarks today are made in my capacity as a AAFP
representative, and do not reflect the opinions of my employer
or any other organizations with which I am affiliated.
As a former solo practice owner, I applaud the committee
for holding today's hearing. It was not long ago that the
majority of primary care was delivered by physicians in solo or
independent practice who were uniquely connected to the
community they served. However, over the last few decades, we
have propped up a health care system with misaligned incentives
that rewards consolidation and under-invest in primary care.
Every system is perfectly designed to achieve the results it
gets, and our current system is designed to ensure the death of
independent medicine.
I have practiced primary care for more than 20 years. In
2011 I opened my own brick-and-mortar family medicine practice
in my rural community which had lacked any primary care
practices previously. To say running my own practice was hard
would be an understatement, but it was also rewarding. Plans
provided no transparency on their contracted rates, meaning I
didn't know what I would be paid until I had already signed on
the dotted line. Many plans also closed their networks
completely and would not contract with me initially.
I was an early adopter of value-based payment through
participation in an ACO, where we achieved share savings while
providing quality care to patients. I am grateful that I had
the opportunity to participate in an ACO. There was at least
one year when the shared savings payment helped me keep my
practice doors open.
When the pandemic hit, and Mississippi required us to stop
seeing patients in person, we were able to pivot to providing
care via telehealth the very next day. I was able to cultivate
meaningful, trusted relationships with my patients, many of
whom became like family, while maintaining my own clinical
autonomy and decision-making authority.
Around 2021, the tide started to change. Prior
authorizations were increasing while payments were shrinking.
Physician practices already get paid two to three times less
for services than hospitals, who are able to charge facility
fees.
Primary care is at its best when it is delivered by a
physician-led team. However, it was hard for my practice and
others to compete with hospitals for the same staff. They can
offer signing bonuses, higher base salaries, an array of
technology that practices often can't.
Eventually, the draw of hospital employment became too
alluring for my staff. I had the privilege of working with an
incredible nurse for my--almost my entire career. She ended up
leaving because, as she put it, primary care had become too
hard, and she couldn't do it anymore. She went to work for a
hospital-employed pulmonologist. We both cried when she left.
Soon after, both MPs on my team decided to leave, as well. One
went to a hospital-owned practice closer to her home, and the
other to a subcontractor for managed care companies that offer
more flexibility.
After they left, I tried to make things work, but the hits
kept coming and burnout seemed inevitable. For example, health
plans started clawing back money that they had already paid me
because of minor billing mistakes, instead of allowing me to
resubmit claims. Eventually, for myself and for my patients, I
had to reevaluate whether keeping my practice doors open was
the right choice. I knew it would take at least six months to
try and replace my staff, and the administrative burden I faced
further eroded the time I was able to spend on patient care.
In the decades since I opened my practice, a pharmacy, an
urgent care, and a physical therapist had also opened in my
small town. The presence of my practice has made a positive
economic impact on the community and, most importantly, a
positive personal impact on my patients.
I decided to close my practice in the summer of 2022. While
this is my story, it is not unique. It is the story of many
other family physicians who have been forced into a false
choice of either selling their practice, often for pennies, or
closing their doors entirely.
Thankfully, Congress can advance policies that will better
support the success of practices of all sizes and ownership
types. These include improving payment for primary care,
addressing misaligned incentives such as facility fees that
encourage consolidation, and minimizing the administrative
burden that independent practices face.
Thank you again for the opportunity to testify and share my
story. I look forward to answering your questions.
[The statement of Dr. Gholson follows:]
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Chairman BUCHANAN. Thanks, Doctor.
Dr. Richardson.
STATEMENT OF TIMOTHY RICHARDSON, MD, INDEPENDENT PHYSICIAN,
WICHITA UROLOGY
Dr. RICHARDSON. Chairman Buchanan and Ranking Member
Doggett, I am Dr. Timothy Richardson, a urologist and partner
in Wichita Urology, an independent physician practice in
Wichita, Kansas. I also serve as a board member of the Large
Urology Group Practice Association.
My practice is a single specialty group of 12 doctors that
serve over 1.1 million lives in a geographic area covering two-
thirds of the State of Kansas. We have 13 clinic locations
throughout the state that makes it possible for the rural
patients to receive critical cancer care and advanced
urological treatments where they live.
We greatly appreciate the Ways and Means Committee interest
in examining the challenges facing independent physician
practices.
While Wichita Urology is no stranger to the mounting
pressures independent practices face, we are fortunate to have
remained independent. Unfortunately, this is not the case for
many of the other practices across the country, despite a
commitment to their patients and their communities.
In response to the double whammy of increasing regulatory
and administrative burdens alongside declining reimbursement,
independent physicians have responded by working harder and
more, leading to burnout and early retirement, thereby
compounding the shortages and the onus on those who remain in
the practice. In fact, yesterday I personally performed 10
surgical procedures and saw 24 clinic patients before racing to
catch a 3:00 p.m. flight to be with you here today.
I am reminded of what occurred to a colleague's practice in
Shreveport, Louisiana, which peaked at 20 urologists but over
time dwindled down to 8 as hospitals recruited their doctors,
who could be relieved essentially of 100 percent of their
administrative, practice management, and regulatory burdens
overnight, alongside an RVU pay schedule that substantially
reduced their patient care burdens.
In the face of seemingly endless, expanding workload in
private practice, hospitals can offer higher starting salaries
on the promise of a work-life balance that limits working
hours. Pay differentials, subsidized by site-of-service
disparities, made it impossible for them to compete for the
nursing staff. That practice eventually collapsed, and the
patient access plummeted as more physicians left the practice
and the hospital system that acquired the group closed all of
the outlying offices northern--in the northern part of the
state, where there had formerly been 11 clinic sites.
Just as important, patients lost a one-stop-shop of
coordinated and personalized care with physician-patient
relationships that had been built over the decades with
patients and their families.
This is not an isolated incident, but a nationwide trend.
Hospital-employed physicians increased by more than 70 percent
between 2012 and 2018, and another 5.1 percent between 2022 and
2023. More than half of the physicians are now employed by
hospitals.
It is not hard to understand why. Hospitals have focused on
acquiring physician practices because that strategy
simultaneously quashes competition in the local market and
captures downstream revenue from ancillary services such as
radiation therapy, imaging, and physician-administered drugs,
often times purchased at 340B prices.
The revenue a physician generates for a hospital employer
far surpasses the cost of the employed physician's salary. For
example, a recent Merritt survey found that urologists generate
$2.1 million while receiving an average salary of 386,000.
Similar returns on investments exist for other specialists.
A major factor contributing to provider consolidation is
the inability of private practices to remain financially
viable. Medicare reimbursement payment updates do not come
close to matching the rising practice costs. More recently,
physicians have taken payment cuts. Physicians only received a
nominal 10 percent increase over the last two decades, while
the practice cost inflation rose 47 percent. That is simply not
sustainable.
Meanwhile, hospitals have received compounding payment
updates based on their input cost, amounting to 70 percent over
the last two decades, and enjoy a substantial site-of-service
payment advantage for the identical services. As an example,
Medicare pays hospitals more than twice the amount a physician
receives for a cystoscopy with lithotripsy stent procedure at
an ambulatory surgery center, even though this requires
essentially the same staff, infrastructure, time, and technical
training to perform. Similarly, hospitals receive more than
two-and-a-half times more than physicians to infuse identical
part B drugs.
Studies have shown that Medicare could save over $150
billion by equalizing these payment disparities. Yet simply
cutting the hospitals does not assist physician practices. We
would suggest an approach that modestly reduces the HOPD
payments and modestly increases physician payments to protect
the patient access.
Just as troubling as the reimbursement challenges is the
regulatory burden physicians confront, and the lack of
alternative payment models available to most doctors. Only 17
percent of participating providers received an APM incentive
payment in 2023. CMS failed to implement or even test any of
the 17 physician-focused payment models that were recommended
by PTAC.
MIPS has been an even bigger disappointment, and only
served to burden physicians with onerous, expensive, and
largely meaningless reporting requirements. The MIPS reporting
program costs nearly $13,000 and takes more than 200 hours per
physician per year. That is time that could be spent with
patients.
Just as troubling, high performers were not properly
compensated because the MIPS's zero-sum game provides bonuses
only to the degree other physicians are penalized, and less
than 0.3 percent were penalized. We agree with MedPAC's
statement: MIPS is, as presently designed, is unlikely to
succeed in helping beneficiaries choose clinicians, helping
clinicians change practice patterns to improve value, or
helping the Medicare program reward clinicians based on value.
MIPS should be terminated.
The Stark Law also remains an impediment to value-based
care delivery. It must be modernized to reflect how care is
delivered today, not three decades ago, when it was first
conceived. The physician entrepreneur should be encouraged, not
vilified.
I would like to thank the committee for focusing on
promoting and protecting independent practices and patients we
serve. We look forward to working with you to reform these
programs to make them more efficient and improve patient
outcomes.
[The statement of Dr. Richardson follows:]
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Chairman BUCHANAN. Thank you. I do want to note our next
witness. She is the chief operating officer of a practice.
So you are responsible for paying the bills, so you have
got probably a unique insight. You know, everybody else is a
doctor, but you are actually up there having to pay the bills
and deal with that reality. Go ahead. Five minutes.
STATEMENT OF CHRISTINE KEAN, COO, THE SAN ANTONIO ORTHOPAEDIC
GROUP
Ms. KEAN. Thank you, Chairman Buchanan and Ranking Member
Doggett, for allowing me the opportunity to provide boots-on-
the-ground testimony about what it is like to be an independent
medical practice in health care today. My name is Christine
Kean. I am testifying on behalf of myself, as chief operating
officer of TSAOG Orthopedics and Spine, and all 41 physicians
of our group.
We are a fiercely independent, 100 percent physician-owned
group taking care of patients in the greater San Antonio region
for over 75 years. I have been fortunate to have worked
alongside the dedicated physicians and health care
professionals of TSAOG for the past 23 years. The group is a
fully integrated, private health care entity consisting of non-
operative physicians, orthopedic surgeons, and
anesthesiologists. Our physicians and the ones that came before
them built this group to help patients navigate an often
confusing health care environment by providing as much
physician-directed care as possible under a seamless umbrella.
Our patients are able to obtain X-rays or more advanced
imaging such as MRI or CT; receive their physical or hand
therapy in person, or even virtually; see us after hours,
during the week, and on Saturdays in our urgent care solution,
OrthoNow; be seen for preventive bone health care. And if they
require surgical intervention, we have two outpatient
ambulatory surgery centers that provide basic and complex
orthopedic surgeries to include spine and joint replacements.
If inpatient hospital care is required, this will also be
directed and led by our physicians at one of three community-
based hospitals in the region. Think of us as a small ecosystem
for orthopedic care in San Antonio.
Creating an entity like this is rare. It is extremely
challenging to do, and even more difficult to maintain. It
requires our physicians to be fully focused on all aspects of
the patient treatment plan, to include their own, as the
physician, not me, as an administrator, is solely responsible
for the liability of every patient they care for.
Meanwhile, they, alongside our administrative team, are
also responsible for the nearly 600 professional team members
they employ to make right business decisions taking into
consideration the complex health care regulatory environment we
live in today, as doing so ensures a future will exist for them
and our patients for generations to come under this model.
I am here today to help you understand the challenges of
maintaining this environment, and why so many private practices
across the country are collapsing. There are three main
challenges facing independent medicine in our market across the
country.
Number one--and I think you know what I am going to say--
the source of revenue to maintain this environment is fixed,
decreasing, and largely not in our control. A typical Medicare
patient 3 years ago reimbursed the practice $89.05. Today it
reimburses $2.59 less, and we face more cuts next year. This
must change. No entity can stay in business with reductions
like this, especially when the inflation rate over those 3
years was 16 percent. Physicians can no longer subsidize the
cost of care for the Federal Government, nor should they be
required to do so.
Number two, expenses have increased dramatically. And I
will give you one example, but there are many more: 3 years ago
an entry-level certified medical assistant hourly rate was
$13.50 an hour; today it is 16.50. This represents an annual
increase of over $200,000 to our organization for just one
position needed to care for patients. While giving pay
increases is something we are very proud to do and good for our
team members, increasing expenses without the ability to
increase our fee for services puts us at a disadvantage to
other non-health care employers in the market.
And number three, relationship with insurance carriers and
others has become at times hostile and not conducive to
maintaining a healthy balance required for the delivery of
health care today. Simply put, if any health care relationship
remains unbalanced, as it is in many of our communities, it
will severely limit patient choices, drive up costs, and
undermine the integrity of patient care. Patients may even lose
their ability to see their doctor.
I noted earlier that we have been in practice for over 75
years, longer than most insurance carriers have been in
existence. Believe it or not, we didn't always have health
insurance, but we did have doctors. As an independent physician
group we have taken pride in caring for our neighbors and
friends, not allowing for shortcuts in care, and making sure
that a return on investment is not the determining factor in
physicians' decision-making. And the results bear this out, as
we are consistently offering innovative, cost-effective
solutions while being recognized for the best care in the
region, and we have the patient outcomes to prove this.
Thank you for providing this forum to learn, and for
inviting me to speak to you directly. I am very happy to take
your questions. Thank you.
[The statement of Ms. Kean follows:]
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Chairman BUCHANAN. Thank you.
Dr. Desai.
STATEMENT OF SEEMAL DESAI, MD, FOUNDER, INNOVATIVE DERMATOLOGY
Dr. DESAI. Chairman Buchanan, Ranking Member Doggett, and
members of the subcommittee, my name is Dr. Seemal R. Desai. I
am the president of the American Academy of Dermatology
Association that represents more than 17,000 physicians
nationwide, and I am the founder of Innovative Dermatology, a
private practice with 2 locations in Dallas.
I see firsthand the lifesaving work that dermatologists
provide for patients, which is especially timely today, during
National Skin Cancer Awareness Month, when we are raising
awareness of statistics such as the fact that one person dies
every hour from melanoma.
I have seen how skin disease can devastate a family. At a
young age my brother was diagnosed with vitiligo, a devastating
skin disease that causes one to lose their own skin color,
resulting in large white patches all over the body, a disease
which can feel like a death sentence, especially for patients
with skin of color, often leaving patients feeling anxious,
depressed, and withdrawn. At the time of my brother's
diagnosis, my family would make a 450-mile journey from our
home in Atlanta to see the only vitiligo specialist in this
country. I saw how critical it was to be able to have access to
a high-quality specialist, particularly for a disease which
such profound psychological impact. And witnessing my family's
patient experience, along with watching my recently-departed
late father, a dentist, inspired me to go into medicine.
Now, I am proud that I achieved my dream of opening my own
private practice in 2011. The threats facing small practices
have grown immensely over the last decade, and the end is
nowhere in sight. I started my career with great optimism, but
the continual state of medicine in this country has continually
directly affected my practice. As president of the Academy,
this makes me incredibly concerned about the physicians I
represent and, most importantly, the patients we treat.
The greatest challenge facing practices and patients is the
failure of the Medicare physician fee schedule to keep up with
inflation, especially when physicians are the only Medicare
providers that do not receive any inflationary updates. Since
2001 the cost of operating a medical practice has increased
almost 50 percent--to be precise, 47 percent. And when adjusted
for inflation, Medicare physician reimbursement rates declined
by 30 percent from 2001 to 2024. What business can survive
under these circumstances?
This payment structure disproportionately threatens the
viability of all medical practices, as well as those serving
rural, low-income, and underserved communities. This issue is
further exacerbated by rising costs and inflation, ultimately
leading to less health care options for patients.
Congress must adopt a permanent Medicare payment update
that fully acknowledges the inflationary growth of health care
costs while working towards long-term reform. The Academy urges
Congress to establish a positive annual inflation adjustment,
and to increase the budget neutrality threshold by passing H.R.
2474 and 6371.
Since I began practicing, I have increasingly had to grow
my patient volume to keep up with demand while simultaneously
juggling skyrocketing overhead costs. In 2014 I brought on
another board-certified dermatologist to reduce wait times and
increase critical access for patients suffering from deadly
skin cancers like melanoma and a whole host of other skin
conditions. Keeping up with those increasing overhead expenses
and paying salaries of another physician, a part-time physician
assistant, and multiple medical assistants was costly and
became unsustainable.
To continue serving my patients in the best way, I made a
decision to combine part of my practice with a larger group to
help manage human resource burdens, the vicious cycle of
billing and insurance issues, and to help make sure my clinic
would continue to function, and frankly, because, as a solo
doctor, I was burning out. Fortunately, I maintain full
clinical autonomy in a patient-centric model, providing timely
and essential access to care.
Another challenge that I encounter multiple times every day
when I see patients is the incredible amount of resources we
spend on prior authorizations, on medications that will keep
patients out of the hospital. This includes staffing a
dedicated, full-time employee simply to handle prior
authorizations.
In closing, on behalf of our members and the patients I
represent as the president of the American Academy of
Dermatology Association, thank you for giving me the honor to
testify in front of you today. We stand ready to help the
committee as you confront the challenges facing practices and
health care in this country, and I look forward to your
questions.
[The statement of Dr. Desai follows:]
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Chairman BUCHANAN. Thank you.
Dr. Jha.
STATEMENT OF ASHISH JHA, MD, DEAN, BROWN SCHOOL OF PUBLIC
HEALTH
Dr. JHA. Good morning, Chairman Buchanan, Ranking Member
Doggett, and members of the subcommittee. It really is an honor
to be here.
I have practiced medicine for over 20 years, and in that
time I have seen American medicine change. I have also seen so
many colleagues and friends leave private independent practice.
Now, when I was a kid growing up in India, I would follow
my uncle, who was a physician, who made house calls. He mostly
made house calls. He got paid whatever the patient gave him.
Sometimes he didn't get paid at all. But he made an enormous
difference in people's lives, and inspired me to become a
doctor. During those years a doctor could keep in his or her
head everything they needed to know to care for people. Today a
primary care physician caring for a complex, sick population
must coordinate care across dozens of specialists, manage a
dizzying array of medicines, tests, and procedures.
Providing care in an independent, small practice has gotten
harder, to be sure. But on top of that, there is an array of
forces driving the demise of independent practices.
Let's start with hospitals and health systems. They have
been on a buying spree. Some of these purchases likely have
been helpful, maybe closely aligning hospitals and physicians
to provide high-quality care, but many have not. We have all
seen stories about how a hospital buys a practice. Nothing
changes, but because it is now billed as delivered in a
hospital-based location, the cost to the patient goes up due to
facility fees. The access isn't any better, the quality isn't
any better, but these fees make private practices an
acquisition target, and cost Medicare and consumers real money.
Large corporations have gotten into this game, the most
well-known of which is Optum, a part of the UnitedHealth Group.
Optum now owns or manages 1 in 10 practicing physicians in
America.
And then there is Medicare Advantage. The commercial
takeover of Medicare has made life much more complicated for
that independent physician. While payments that doctors receive
under MA usually don't match what they receive under regular
commercial contracts, they face all the same hurdles and then
some. The most obvious example you have heard about today is
prior authorization. Most MA plans require prior authorization.
Every MA plan has its own set of rules, and prior authorization
makes doctors' lives harder and hampers their ability to
provide the care they think their patients need.
Further, initial denials of care authorization have grown
substantially in recent years.
And finally, last but certainly not least, there is private
equity. Recently a colleague of mine in Florida sold his small
cardiology practice to a private equity firm. Although he was
initially reluctant to sell that practice he had run for over
20 years, he was persuaded by what seemed like a great price.
Over time he got pressured to change his documentation so they
could bill more aggressively, and eventually he found himself
changing the way he practiced medicine. And last, but not
least, he heard from some of his longstanding patients that his
practice had stopped taking their insurance, meaning he could
no longer take care of them.
My colleague is not alone. PE firms are spending hundreds
of billions of dollars buying up physicians, practices,
hospitals, and nursing homes across America. These acquisitions
usually increase costs. They can reduce access. They can even
harm patient safety.
So thankfully, there is action, action we can take, and you
have heard about many of these today.
First, I think congressional action on site-neutral
payments is essential. It just makes no sense to pay more for
the same care in the same location, just because the ownership
of that practice has changed.
I believe transparency around ownership is essential, so we
know who is buying up practices and what they are doing with
those practices.
And vigorous enforcement of our existing antitrust laws is
critical to ensure that we reduce market consolidation.
And finally--and you have heard this from my colleagues
today--it really is time to address the fact that there is no
inflation adjustment with the physician fee schedule. That just
makes no sense. Physician pay should absolutely keep up with
inflation, and we have got to make that a real priority.
My belief is, if we do all of these things, we can have a
dynamic health care system where independent practices can
thrive and flourish, and patients can have more choices, lower
costs, and better care.
Thank you very much, and I look forward to your questions.
[The statement of Dr. Jha follows:]
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Chairman BUCHANAN. I thank all of you. We are going to move
into the questioning session part of it.
But if you can be somewhat concise, I know there is--these
are not simple, but Dr. Gholson, let me ask you. You are
talking about your practice, 20 years. You had to unfortunately
close the business. If you look back, what--could you have done
anything different?
Or a lot of the rural communities that you are in, that you
service, the numbers don't add up, especially with--you know,
whether--you are getting cut many times every year over the
years. What are your thoughts on that?
Dr. GHOLSON. In my community one of the biggest barriers I
believe I had was that the local hospital considered me as
competition, instead of a community partner, and so they
continued to expand around me.
And so there were often times where, say, my patients would
go to their emergency room, and be admitted, and they would not
list me as the primary care physician because I wasn't employed
by the hospital. And then, when the hospital would discharge
that patient, instead of sending them back to me as their
primary care physician, they would send them back to one of
their hospital-employed physicians, which was disrupting the
care. That was a major issue for me, because managing a
transition from a hospital to your practice helps keep people
out of the hospital.
It was also very difficult to contract with insurers
because I am--it is just me. I am the CEO, the CFO, the COO. I
mean, I do all of that. And so, you know, often they would say,
``We don't know if we need you in our network,'' and I am like,
I am the only doctor in this town. How could you not need me?
[Laughter.]
Dr. GHOLSON. So I think that was--those were probably the
two biggest challenges, is not being able to be competitive
with contracting.
I mean, what we get paid for primary care, it is just--it
is prices, the price of goods increases.
Chairman BUCHANAN. Thank you. I have got to move along----
Dr. GHOLSON. Sure.
Chairman BUCHANAN [continuing]. Because I want every--Dr.
Richardson, you talked about administrative burden has gotten a
lot worse. Can you better--a little bit more--articulate that
aspect?
Dr. RICHARDSON. Sure. Most of it--well, I shouldn't say
most of it. A lot of it revolves around MIPS. I have three
staff that are constantly reporting following up--towards the
end of the year I had a conversation with our director of
operations and said, ``How much time do you spend reporting and
dealing with MIPS?''
She said, ``Towards the last two months of the year, it is
at least half of my day. Our head IT, it is at least half of
his day. Our head nurse managers, at least half of her day, and
throughout the year it is a never-ending game.''
Sure, the costs of practice are going up every year, so you
have to keep adding in administration for that, decreasing
reimbursement. So we are constantly pressured to try to add new
service lines of treatment for the patients to try to maintain
revenue. But at the end of the day, it is just the increased
cost, the increased need to try to employ more staff, and the
competition to try to employ those staff with competing
hospitals in town that can pay those staff more.
But MIPS, especially towards the end of the year, is a huge
burden for my office staff.
Chairman BUCHANAN. Ms. Kean, what is your--you got a unique
perspective. You know, like she said, everybody is the CEO, and
the CEO of their own practice. But what is your sense that is
the biggest challenge, the top one or two challenges that you
face every day or every week in your practice or your business?
Ms. KEAN. Yes. I think, you know, aside from the payment
issues, it--certainly, prior authorization has been just an
absolute disaster. And it really isn't--it doesn't do anything
to improve care. It does absolutely nothing to improve care.
But it does allow insurance carriers to deny care. And if they
don't deny it on the first prior auth attempt, you know,
doctors will get on the phone, spend all kinds of time with the
insurance carriers getting it approved.
We examined over 30,000 orders in our practice in 1 year.
We have a research entity that helps us do that. And more
than--less than one percent of the authorizations that we
requested ever fully got denied, and I think that that is just
because the patient abandoned the care. So if they are
approving it 100 percent of the time, why are they doing it? It
is because it is a billing game. Because if you don't have the
prior auth on the bill, which you will, then they can deny the
care later that you already performed.
And so I think prior authorization is a really big thing
that we have tried to address in Texas. We do have a gold card
bill there, which we are very proud to support. It is a good
start, but we need help with that. It only protects the fully-
funded plans.
Chairman BUCHANAN. Okay. Let me ask both of you about
private equity. You touched on it. Here is the thing--I see it.
Everybody is getting paid less, but yet private equities--I
have been in, you know, through the 1980s, with the junk bond
deals, and leverage, and all the other stuff, they are usually
looking to make 20 to 25 percent.
So one side you have got, you know, where people aren't
getting paid enough, but yet they are buying these practices,
and it is working for them. And I am sure in five to seven
years they are looking to get that kind of return. And I have
heard a lot of horror stories on some of it, where doctors
thought it was one thing and it ends up being another, they got
out of it.
But both of you, I would just like to have you quickly
weigh in on that issue of private equity.
Dr. DESAI. Thank you very much, Mr. Chairman, for the
question.
I think one of the things that I use as a litmus test when
looking at patient care models, be that solo private practice,
be that a group, be that a hospital system, multi-specialty,
private equity, invested, I think the important north star that
we have to consider is where patient care lands between the
sanctity of the physician and the patient. And my philosophy
and the Academy's position is that we want to ensure the
highest level of patient care when a patient sees a board-
certified dermatologist for their melanoma, to save their life
from skin cancer, or a horrible inflammatory skin disease.
I think we have to be very careful when evaluating models
because it is not a one-size-fits-all approach, as you alluded
to in your comments, Mr. Chairman. So I think the important
message here is that we have to make sure we understand what is
happening between the doctor and the patient in that exam room,
and how is that patient accessing the treatment in the best
way.
Chairman BUCHANAN. Private equity, Doctor?
Dr. JHA. Chairman Buchanan, so this is a really important
issue. And it is, first of all, even hard to know how much
private equity is in health care, because there is no real
transparency. But they have figured out how to make a buck in
the system.
Their general strategies tend to be they buy up a lot of
practices in a market, gain a lot of market power, and then go
to the insurers and say, ``We now own all of these practices.
What are you going to do? How do you run a network without
us?'' And they jack up prices. Ultimately, guess who pays that?
Consumers, employers. Guess who doesn't get to see any of that?
The physician who is in those practices. So that is their
number-one strategy for how they are doing it.
They are doing a whole bunch of other things, changing the
way they do billing. This colleague of mine I mentioned who
sold his practice initially thinking, well, I can just practice
medicine and not worry about the business, he found himself
practicing medicine differently because of the pressure he was
getting.
So private equity is a real problem. I think we need to
begin with transparency. We need to know what these guys--who
they are, what is--what the investments are. We need to have
vigorous antitrust enforcement so that you don't gain monopoly
market power. And I think there is a series of other things we
can do, but we have got to get on this.
Chairman BUCHANAN. And let me just say, you know, kind of
close to home for me, my nephew graduated as a doctor, a
radiologist, wanted to take a job in Florida, interviewed, all
that. And then he found out that they were selling out to a,
you know, a private equity firm. So he decided to look other
ways, and he went out of state to find another opportunity. He
joins that firm, is with it now, and then within six months
that equity firm bought that one out. So I know there is a lot
of discussion about that, but I am just concerned about where
all that is going, and the impact that has.
And with that I will turn it over to Mr. Doggett.
Mr. DOGGETT. Well, thank you very much. I would just
continue on that subject.
One study I have seen found that private equity-owned
medical practices charge 20 percent more, on average, per
insurance claim than independent practices, and that an
estimated 80 percent of private equity-owned physician
practices significantly increased prices just after the
takeover. I think the estimates I have seen are that, over the
last decade, private equity has invested more than $1 trillion
in health care.
You have given the example there in Florida, but overall--
similar studies have also shown a number of physicians exiting
from the practice after the private equity takeover. Overall,
is it fair to say that private equity's role, with reference to
physician practices, is to increase prices to both insurers and
to the Medicare system, and to decrease the quality of care?
Dr. JHA. Yes, Ranking Member Doggett, that is a--it is a
really important question. And here is where I think the
evidence is.
I think, first of all, you have cited the key studies on
this. There is a way that private equity firms do this. They
first make sure that people are billing kind of as aggressively
as possible. Second, as I said, they start getting market
power. And, you know, we all--I think all of us agree
physicians need to be reimbursed more. That is not what private
equity is doing. They are getting higher reimbursements, but
they are pocketing that difference. Physicians are not better
off.
And so what we are seeing is, as you said, a lot of
physicians who are just deciding they don't want to practice in
that kind of environment anymore, and leaving those practices.
And then there are studies like one that came out about six
months ago that showed that, when private equity took over
hospitals, over the next two years medical errors, adverse
events went up. And if you say, well, what happened there? My
best guess is, you know, that they probably cut back on
staffing in that hospital. That is another way to save money.
But we know staffing can make a real difference in terms of
patient safety.
So ultimately, what we need to do is we need to look at
behavior. When there is bad behavior, we need to have clear
policies and approaches to dealing with that bad behavior. I
don't want to paint too broad a brush stroke. I am sure there
are private equity acquisitions that have probably been fine.
But overall, when you look at the overall system and see where
people are going, it is causing increased costs for consumers
and the taxpayer. Doctors are worse off. Patients are worse
off.
Mr. DOGGETT. Thank you very much.
Now, Dr. Gholson, you really seem to be exhibit A for what
is wrong with the system now. You heard Dr. Jha also reference
the need for vigorous antitrust enforcement.
I know one of the things that the FTC has recently done
that sparked some controversy relates to these non-compete
clauses that seem to have a big impact within the health care
system. How with the FTC's recent action on that and other
enforcement, which has been lax for years, what impact do you
think that will have?
Dr. GHOLSON. I think it will have a positive impact. At the
heart of the issue is the relationship between a physician and
their patient, and there should be nothing that comes in
between that. And currently, with non-compete clauses, it does.
For instance, when I was considering selling my practice, I
considered going to work for the hospital, but I would have
been under a non-compete. And due to the expanse of where they
had practices and outlying hospitals, if I were to break that
non-compete, I think I would be 80 miles away from where I
live, and I would have had to uproot my family. So it just was
not an option.
One of the things that does concern me with the FTC ruling
is that it doesn't include non-profits, and we do have
hospitals that are--that would fall under that purview as a
non-profit. So I would urge that that be considered, that non-
profits should come under that ruling, as well.
Mr. DOGGETT. Thank you very much, and for your testimony,
generally.
Dr. Jha, let me also ask you about Medicare Advantage. I
have seen estimates that we are paying about $1,500 per
Medicare recipient more, per year out of the Medicare trust
fund to MA plans, than on traditional Medicare. And yet these
plans, some of them, won't pay the health care provider as much
as traditional Medicare. Could you just comment about any
recommendations you might have for what we can do about it?
Dr. JHA. Yes. So Congressman Doggett, as you alluded to,
Medicare Advantage has just taken off. It is now a majority of
Medicare patients are in Medicare Advantage. This is really a
phenomena of the last 10 years. If you ask the question why, it
is because we are overpaying for Medicare and--Medicare
Advantage. And that is not, again, translating into better care
for patients or better reimbursement for physicians.
There is a series of policy things--risk adjustment, how
you do regional, benchmarking--a series of policy options that
we have, but we have got to implement them. Just paying more to
insurance companies when they are not generating more value for
consumers, patients, or taxpayers doesn't make a lot of sense.
Mr. DOGGETT. Thanks to all of you.
Thank you, Mr. Chairman.
Chairman BUCHANAN. Mr. Smith.
Mr. SMITH of Nebraska. Thank you, Mr. Chairman.
Thank you to our panel, as well, sharing your perspective.
Thank you for being on the front lines of health care, where I
know it is challenging and it hasn't been getting any easier
for various reasons.
I am concerned that, instead of finding true reforms, we
have just seen over the last few years we just shift around who
gets paid, how much, and then there are more regulations, and
then there are responses to that. And ultimately, patients
aren't any better off with more government intrusion and
involvement.
But it is very interesting to hear, Dr. Gholson, your
experience, your perspective, that you found the competition to
be the local hospital, who wouldn't refer to you. Would that be
accurate?
Dr. GHOLSON. [Nonverbal response.]
Mr. SMITH of Nebraska. And that perhaps the full choices to
patients were not disclosed to the patient. That is--I am
troubled by that, and especially in the broader picture of how
we oftentimes hear about how referral, the referral process,
should or should not be in other respects.
But, you know, when we have these changes in ownership of
practices, it is disruptive, obviously, as was touched on, that
insurance plans may not be accepted anymore, and how disruptive
that is, ultimately, to patients, and especially those in more
rural areas. When I represent one of the most rural districts
in America, this can be very disruptive. There aren't that many
choices. Mere access is our goal sometimes, when in more urban
areas it is--you know, there might be more choices among
providers. But to take away even some of that very basic
access, I think, is troubling.
I will also point to the regulations and requirements that
oftentimes originate here in Washington being a huge problem,
and I think the latest is the new staffing mandate for nursing
homes. So just in Nebraska--we are a pretty rural state--just
in Nebraska, the Biden Administration expects us to come up
with 450 new nursing FTEs. Where will they come from? Will they
come from the hospitals and the practices that you mention--
which, I am guessing, you might already face a shortage in
their support staff or, you know, nursing providers. I find
this unconscionable, that they would even think of this. And we
have nursing homes in rural America already struggling without
the new mandates. And I think we all know what the mandates are
really about, but it is very unfortunate that these poorly
thought-out policies tend to be happening so much these days.
Dr. Gholson, though, could you perhaps elaborate more on,
you know, the recommendations or insights that you think we
should pursue to address the workforce shortages, whether it is
MDs, whether it is other providers that--you know, that full
spectrum there, what can we do to bring some relief to the
shortages?
Dr. GHOLSON. So in Mississippi one of the things we have
done is increased the number of residencies, family medicine
residencies in Mississippi, with the belief that where people
train they will stay. And so I would encourage--more GME
funding would be one thing that you could do to help increase
rural physicians.
Mr. SMITH of Nebraska. What did they do in Mississippi to
increase those slots?
Dr. GHOLSON. So we established the Office of Mississippi
Physician Workforce, and our state legislature appropriates
funding every year to assist with the start-up cost for
residency, because that seems to be the biggest issue for
starting new residencies, is that initial start-up cost.
Mr. SMITH of Nebraska. Do you ever find that there could be
some stakeholders who want to participate in creating more
slots, rather than just waiting for the Federal Government to
put more money into those?
Dr. GHOLSON. Yes. A lot of the hospitals, when they are
looking at supporting the Graduate Medical Education, they will
often put up some of their own funds because they see the
economic impact down the line.
Mr. SMITH of Nebraska. But there would not be something at
the Federal level that would stand in the way of their wishing
to do that. Would that be accurate?
Dr. GHOLSON. The only thing I see is that sometimes there
is a cap on payments at the Federal level that should probably
be looked at for GME funding.
Mr. SMITH of Nebraska. Okay, all right.
Thank you, I yield back.
Chairman BUCHANAN. Ms. Sewell.
Ms. SEWELL. Thank you, Mr. Chairman, and I want to thank
our witnesses.
Supporting our nation's physicians is pivotal to reducing
negative health outcomes. Dr. Gholson, I represent Alabama,
next door to Mississippi. And I think one of the reasons why I
am so passionate about making sure we increase the number of
slots, the GME slots--and I want to thank our colleague,
Representative Fitzpatrick, and I for working so hard to try to
increase the number of slots. We promote a bill, the Resident
Physician Shortage Reduction Act, and we have tried to increase
as many as we can in order to increase the workforce. The
belief is that, as you said, if they do a residency in these
smaller rural communities, hopefully they will stay.
My district, Alabama's 7th congressional district, is both
urban and rural. And like you, I have many independent
physicians that are struggling. In fact, one is Dr. Steve Furr.
Dr. Furr is a practicing rural family physician in my district
from Clarke County, Alabama. Not only does Dr. Furr practice at
the Family Medical Clinic of Jackson, Alabama, but he also
serves as the national president for the American Academy of
Family Physicians. Dr. Furr, like many family physicians, has
served in his community as an independent physician for 25
years without an inflationary update in 10 years. Yet, of
course, all of his medical equipment has--costs have increased.
And after COVID, obviously, the price of having good nursing
support staff has increased, as well.
We should be doing everything we can to ensure that
independent physicians have enough capital to sustain their
practices without having to resort to consolidation with large
health systems, which is why I am also a very proud cosponsor
of H.R. 2474, which is the Strengthening Medicare for Patients
and Providers Act. It has strong bipartisan support. I think it
is the right thing to do for our nation's physicians. This bill
would provide physicians with the inflationary increase that
they need by changing the Medicare payment rate to reflect the
Medical economic index for inflation. This would help providers
like Dr. Furr and other independent physicians.
I think it is really important that we do whatever we can
to level the playing field so that independent physicians have
just as much of a chance as these big, private equity firms.
And I am committed to trying to do everything I can to see that
through. I know our whole committee is.
Dr. Jha, thank you for sharing your expertise in today's
hearing. How can we best support independent physicians in
rural and underserved communities that do not desire to be
consolidated with larger systems and larger practices?
Dr. JHA. Yes, thank you, Congresswoman, and you actually
laid out a lot of the issues. And I think our--my colleagues
have here, as well.
I mean, first of all, I do think we really do need to look
at reimbursements for primary care more broadly. Nothing
against our specialist friends who are on the panel, but
primary care reimbursement continues to be a serious problem
for family practitioners, general internists, pediatricians. I
think that is an area that requires more attention. I think
that would be helpful to all primary care physicians, certainly
in rural areas.
There is no question about it in my mind that--you know, if
you think it is hard practicing in a world where a majority of
your Medicare patients are MA in an urban setting, it is
incredibly hard in a rural setting. You don't have the ability
to have a full-time person just managing prior authorization.
Ms. SEWELL. Yes.
Dr. JHA. That is untenable. So some of the policy issues
that I have talked about with MA, you know, with site-neutral
payments, those are all going to be helpful everywhere, but
particularly for the rural provider who is just much more
vulnerable to these kinds of things.
Ms. SEWELL. Absolutely. Dr. Gholson, can you talk a little
bit about your experience, and what recommendations you would
give this committee in order to help support independent
physicians?
Dr. GHOLSON. Well, I agree with my colleague. Paying
primary care is vital to the--being able to sustain primary
care independent practices in rural America.
And the budget neutrality issue is also something I think
that needs to be looked at. I love my colleagues. I don't want
them undervalued because I feel like I need to be valued more.
We have talked about prior authorizations, the
administrative burden. That is key.
It is just really paying us for the work that we do, and
the value that we bring not only to our patients, but we bring
value to our communities.
Ms. SEWELL. Absolutely. And often times you are in
communities where there is a medical desert. And so you also
provide economic opportunity.
Thank you so much, Mr. Chairman. I yield back the balance.
Chairman BUCHANAN. Mr. Kelly.
Mr. KELLY. Thank you, Mr. Chairman, and thank you all for
taking a day out of your life to be here today to try to
explain your business model. You guys have so much non-
productive labor, but everybody in business has that today.
I am just going to take a couple of seconds to push a bill
that we are going to be dropping on the 5th of June. It is the
Improving Seniors' Timely Access to Care Act. Ms. DelBene is on
this, Dr. Bucshon is on this, Dr. Bera is on this.
And at this point I want to take the time that I have
remaining and give it to my friend, Dr. Wenstrup, who is
actually in this business, and goes through what you go through
every day.
But I got to tell you, I wish I could say that there is
help on the way. I don't know how anybody runs a profitable
business anymore, especially anytime the government gets
involved in it.
So at this point, Dr. Wenstrup, take it away.
Mr. WENSTRUP. Thank you, Mr. Kelly, I appreciate you
obliging me and giving me more time, and I will use my time
when it comes about, too.
Before I get started, without objection, I would like to
enter a statement for the record on behalf of my friend,
colleague, and fellow co-chair of the GOP Doctors Caucus, Dr.
Murphy. He is away. He is going to be undergoing surgery. I
want you all to keep him in your prayers. And without
objection, I would like to submit his statement for the record.
Chairman BUCHANAN. So ordered.
[The statement of Mr. Murphy follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. WENSTRUP. So obviously, everyone--everything you have
said is spot on. We have covered all the points. But our
country is facing a critical shortage, and access to quality
care is definitely a problem.
One thing I do want to say is that I hope that we don't, as
the medical professionals, reduce the level of expectations in
our education and training, as it will make it even more
difficult to defend our value. We have got to do that. You
mentioned board certification. That is important in every one
of our specialties, because it represents ascertaining the
highest level of quality care that you can provide. And I get
that.
You know, it is so hard to fathom what has happened to
medicine because providers are the product. We are the product
and are the key to a healthy nation to begin with. And it
just--and we need a strong, uninterrupted doctor-patient
relationship to exist.
When I first started in practice, I set up my own practice.
I had two employees. And if someone was sick, my mom came in.
You like that, don't you, Dr. Gholson? And it was wonderful, it
was wonderful. And as time changed, I joined a large orthopedic
group, but I still practiced as an independent physician, I
felt it. You know, it was the type of practice where at
Christmas time people are bringing your gifts, you have
developed relationships, and I think that is the key to a
successful outcome.
One of the reasons I ran for Congress is I looked at
Washington and I said we have people making health care
decisions that have never seen a patient, have no idea what it
is like being out in the trenches. And the profession has
changed a lot since I started that practice which I valued, but
it was no problem when I went to a larger group because we were
all of the same ilk. We were independent, we were practicing.
Our reputation mattered in the community. That is what
mattered, not what Washington thought. I have always felt it
really didn't matter to me. Yes, you know, if you want us to do
this, submit this and that--which, obviously, as you know, and
as everyone has commented, got worse and worse and worse, and
more and more burdensome.
But I remember starting out in practice. And every day from
Washington I was hearing about greedy doctors, greedy doctors.
This is the 1980s. And I thought I am $185,000 in debt. That is
cheap today, that is cheap today. And I worked during school to
keep it down. I am not greedy. And I figured I will make a good
living as long as I do a good job and take care of people. That
is all it comes down to.
I am against fraud. We want to catch people that are
committing fraud and everything else. But other than that, get
out of our way. Let us take care of people.
We get on calls for prior authorization, and I am talking
to somebody who is not in my specialty telling me what I can
and can't do. I ask them for their license and how the patient
can make an appointment for them, because if they are going to
take over the care they should take over the liability. And I
am just sick of it. They take no liability, but they determine
the outcome of the patient, they delay the treatment of the
patient. All of these things.
We have got to take control, and we have got to start
telling Washington, as providers and as Members of Congress,
enough is enough.
My time has expired here, but I am just getting warmed up.
[Laughter.]
Mr. WENSTRUP. I yield back.
Chairman BUCHANAN. Stay tuned for act two. [Laughter.]
Chairman BUCHANAN. Ms. Chu.
Ms. CHU. Dr. Jha, thank you for your testimony. Every year,
especially over the last few years, especially during the last
half of the year, physician group after physician group will
come in pleading not to just get zero percent increase in their
Medicare fees. Current law has the updates at 2.93 percent for
2024, but it will drop to 0 percent for 2025 unless Congress
intervenes.
So the physicians say the updates are insufficient, and
that there is no means to deal with inflation. And of course,
they talk about that, with this insufficient Medicare payment
updates, it is really difficult to deal with their practices.
We have heard a lot about these challenges today from so many
of you who have testified.
What do you recommend we do to upgrade how Medicare pays
physicians in a way that will improve value without breaking
the bank?
Dr. JHA. Yes, Congresswoman, thank you for that very
important question.
I guess I would begin by saying that part of the reason
they come in every year is because we have a long tradition of
not fixing things for the long run, and then doing this kind of
BandAid fix every year. We did that for a year.
Eventually, MACRA solved one part of that problem, but then now
we have this issue.
Look, I think we need a long-term fix on inflation
adjustment for our physician fee schedule. I just--I have not
encountered someone who does not think that that is the case.
Where there is some disagreement is exactly how do we do that.
And do we use the Medicare economic index that tracks costs of
practice? What proportion of that over what time?
I think MedPAC has laid out a strategy and an approach that
I think is pretty reasonable. I suspect other people may be--
you know, may not disagree with their--I mean may not fully
agree with their approach.
But the bottom line is that, instead of fixing this--you
have plenty of other issues you need to be dealing with. Having
to do this every single year creates uncertainty, it wastes
time, and it creates hardship. And for physician practices
planning out next year, if they don't know what they are going
to get paid, that makes them more susceptible to being--to
saying, fine, I will just take the deal from the hospital or
the private equity firm. So a long-term fix is what we need at
this moment.
Ms. CHU. Thank you for that. Dr. Jha, you also highlight
the issue of frequent wrongful prior authorization denials in
Medicare Advantage plans. I am especially concerned that a
growing number of these denials are determined by flawed
algorithms and unvetted AI tools that fail to account for
beneficiaries' individual circumstances.
In 2022 the Department of Health and Human Services
inspector general found that AI denials led to amputations,
fast-spreading cancers, and other devastating diagnoses for
some seniors. In response to these AI denials, I sent a letter
to CMS last year detailing specific enforcement actions the
agency can take to increase oversight of AI tools in Medicare
Advantage coverage decisions. And earlier this year I was
pleased that CMS finalized new prior authorization rules
instructing plans to make coverage decisions based on
individual circumstances, as opposed to AI.
But questions about the enforcement of these instructions
remain. So Dr. Jha, can you elaborate on how the rampant use of
unvetted AI tools by MA insurers creates unnecessary burdens
for physicians, and contributes to harmful outcomes for
patients?
And what additional measures should be taken to enforce
these rules and ensure that private insurers are not leveraging
AI tools to unlawfully deny care for seniors on Medicare
Advantage?
Dr. JHA. Yes, and again, I think we have heard almost
everybody on this panel talk about prior authorization and its
problems. I think there was a report out--I want to say it was
ProPublica, but one of these news outlets--that looked at
Cigna. Their denial--they spent a second-and-a-half per claim
to make their denials. This is not a physician carefully
reviewing the circumstances and making a clinical
determination.
The way that most of these insurance companies work is, if
you can use an algorithm, you deny first a whole set of things.
You just have raised the bar for the physician to have to come
back, argue for the case. And a lot of physicians in a busy
practice will just give up. And that is actually the strategy.
Look, I think there are instances where prior authorization
can make sense. If you are doing something somewhat
experimental, extraordinarily expensive, extremely unusual,
going through an extra burden or an extra hurdle can make
sense. But I think, for more routine things, a lot of what CMS
laid out--I think it was in your letter, as well,
Congresswoman--is really smart. I think we have got to have
actual physicians involved in the decision-making, transparency
about authorized pre-authorization rates and denial rates.
There is a lot of work to be done.
But again, what I would love to see is long-term fixes on
these, because Medicare Advantage is here to stay, and we have
got to make sure that we solve these problems for the long run.
Ms. CHU. Thank you, I yield back.
Chairman BUCHANAN. Thank you.
Dr. Wenstrup. And we are going to move two to one now.
Mr. WENSTRUP. Thank you, Mr. Chairman.
You know, one of the things I want to continue with what I
was saying, when I said I didn't care what Washington thought,
I didn't want them to have to worry about what I was doing,
either, you know, at the same time. I cared about what the
patient's results were, what they thought, what my referring
doctor thought, what my hospital community thought, what my
fellows around me, my society thought, all those types of
things. Because when you do that, you are going to be fine.
But if you are doing something out of the extraordinary or
something inappropriate--Dr. Jha, you kind of touched on that--
I understand that. You know, let's have some oversight here and
there. Our society should have oversight over how people
practice. All those things are important.
But I remember in my first term here with the Doctors
Caucus, we were meeting with CMS, and they said to us, ``All
the things we are starting to implement are really starting to
work.''
I said, ``For who? For who?'' I said, ``You have taken the
joy out of taking care of people. You have made it such a
burden to actually put your hands on someone's shoulder, and
take care of them, and tell them you are going to be there for
them, because you spent more of your time trying to appease
they who never see the patient.''
You know, going forward, okay, what are we going to do
going forward? You know, at the GOP Doctors Caucus we talk
about our focus on making America the healthiest nation on the
planet. What are we doing? Is everything we are doing leading
to better health for all of America? And how do we incentivize
prevention, and how do we understand here in Washington the
return on investment when we actually have a cure for
something, and the cost of it pales in comparison to treating
someone for 25 years?
Those are the types of things we need to work on here, and
move forward as a nation so that we can do more for patients.
Because there is a greater value to the healthy human being,
and even those with chronic illnesses if we can keep them
healthy. Guess what? They can go to work. They can do things
and pay taxes, which is more money we can get our grubby little
hands on up here. And that is, you know--but the value of the
healthy human being is never really considered. We have to keep
promoting this.
I do want to spend time talking about something that I know
will be near and dear to Dr. Gholson. Xavier University in
Cincinnati, Ohio is starting a new DO school. Why are they
starting DO? Because DOs tend to gravitate more towards primary
care. And look, you know, the practice that I have as a
podiatric surgeon, you know, we are doing vascular, we are
doing orthopedics, we are doing dermatology, we are doing a
little bit of everything--sports medicine. We do a lot of
prevention. We do a lot of prevention, try to prevent
ulcerations, limb salvage, those types of things. So this is
near and dear to my heart, that we focus on preventive care and
incentivize it.
You know, the doctor that does the CABG, the open heart
surgery, that is great. You save a life, you should be rewarded
for that. That is tremendous. But the primary care doctor that
works with the patient that prevents them from ever needing
that CABG, you really don't get rewarded for that. We need to
focus on those types of things. That will be better for us as a
nation.
So Xavier started the DO school because they tend to focus
more towards primary care, which we need in southern Ohio
tremendously. At the end of the Trump Administration we did
pass 1,000 new residencies with--a large focus should be going
to rural. So I am trying to coordinate residency programs in
our rural areas because, as you said, people stay. These are
some of the solutions, though. These are the things we have to
focus on.
But I want to go back to the problem, and I really want my
colleagues to focus on this. We need to take control.
We passed the No Surprises Act in a bipartisan fashion to
take anxiety away from patients who worry about--so they don't
have to worry about their bill, it will be taken care of
between the insurance provider and the doctor. We did it in a
way that we hoped would be fair to everyone, and where doctors
would want to be in network, and insurance companies would want
you in network. And HHS went and changed the bill to exactly
what we said we didn't want. These are problems we have here.
But we need your voice to keep talking about these things so
that we can make the changes.
And so, I don't really have a question, but I want to go
back to that with Dr. Gholson and get your comments on that,
because I hope this is going to be a successful thing. And you
have somewhat mimicked that with--I think it sounds like what
you did at the state level by helping to get the residencies
underway. Can you comment on that a little more?
Dr. GHOLSON. On the work that the OMPW has done?
Mr. WENSTRUP. Yes.
Dr. GHOLSON. Yes. So we started that about 11 years ago
with the idea that we needed to increase physicians in rural
areas. Specifically, we needed to increase well-trained family
medicine physicians in rural areas because we felt like that
family physicians could take care of maternity needs, they
could take care of pediatric needs, they could take care of
preventative visits. It was--seemed like the best solution to
help with our lack of medical care in rural areas.
We too recently started a DO school in Mississippi. It is
relatively young. I think they have graduated their second or
third class, and it has been good to see their commitment to
primary care in the state. But it is a pipeline. It doesn't
happen overnight.
One of the things we also did is we started the Rural
Medical Scholarship Program. So we encouraged our medical
students at both the MD university and the DO university to
choose to go into primary care, and so they were able to
graduate medical school with no debt.
Mr. WENSTRUP. Thank you. My time is expired, but thank you
very much.
Chairman BUCHANAN. Mr. Hern.
Mr. WENSTRUP. I greatly appreciate it.
Mr. HERN. Thank you, Mr. Chairman. I would like to thank
the witnesses for being here today and, as my colleague from
Pennsylvania said, taking some time out of your life to come
talk to us about something that you do every single day.
I will--as my colleagues up here have described, I want to
describe a health care system that I grew up in many years ago
in the Ozark Mountains of Arkansas. I remember seeing the same
doctor for every ailment I had, from the time my brother
accidentally shot me with a bow and arrow to the scar on my
face from a barbed wire fence to broken bones and even the
common cold. This was a time before there were third-party
billers, electronic health records. If my mom couldn't pay the
bill that day, which she usually couldn't, she put it on the
ledger. And when she got paid, she paid the doctor. And guess
what? That system worked. I am here today, and getting to talk
about the very thing that I grew up in.
It seems so simple, you know, a patient and a doctor
together were the heart of the health care system. But sadly,
we are a long way from those days. Now we have third-party
billers, huge health systems, and no one knows how much
anything actually costs.
One thing that really concerns me that I am glad this
hearing highlights is the fact that the health care system will
buy up a physician practice, jack up the prices--and sometimes
overnight--and get paid much higher rates than private,
physician-owned practices for the same exact services. A lot of
times this is because these hospital systems tack on a so-
called facility fee. Study after study after study shows that
patients are being charged exponentially more for the same
services.
According to an analysis of six outpatient procedures
released last fall, hospital common procedure prices were
substantially higher, in some cases five times higher than when
performed at a physician's office. There is no evidence that
outpatient care in hospital-owned facilities for the same
services results in better outcomes. So patients are left with
no added benefits, just higher prices and less choices. This is
why I introduced H.R. 3417, the FAIR Act, which would require
all off-campus outpatient departments to have separate NPIs so
they cannot change--charge onsite hospital prices.
Dr. Richardson, you touched on this a bit in your
testimony. Would you agree that requiring unique identifiers
for on and off-campus facilities and other site-neutral
policies would lead to lower out-of-pocket costs for patients?
Dr. RICHARDSON. Thank you for the question.
Absolutely. We have a very comprehensive one-stop-shop
practice, where we offer radiation therapy, diagnostic therapy,
surgical therapy, medication therapy, clinical trials--
basically, treatments and diagnosis throughout the gamut. If we
sold to a hospital system overnight, by changing nothing, not
changing the sign on the door, not changing the physicians, not
changing location, overnight it would cost two to three times
more for any of the insurance companies or Medicare, and the
patient's out-of-pocket, as well.
So it absolutely makes a big difference, when all of a
sudden you are billing under a hospital code instead of an
outpatient procedure code or an outpatient clinic code, that
the price just skyrockets. And it has nothing to do with
quality of care. It has nothing to do with access of care. In
fact, most of the time it would actually decrease access,
because all of a sudden we are not motivated to work as much
because we are getting paid substantial rates on RVUs, because
the hospital can't afford to do it due to their site of service
disparity and benefits and advantages in that realm.
Mr. HERN. Thank you. Another issue that I am gravely
concerned about and interested in is this idea of physician-
owned hospitals.
I know we all have our opinions on the Affordable Care Act,
and my opinion is there was a lot wrong with it, but today I
focus on the ban on opening new, physician-owned hospitals. I
found it a bit foolish that we have sat back and watched
hospitals and health care systems take over and buy physician
practices now employing upwards of 75 percent of our
physicians, but do not let physicians, the ones providing the
care, invest and run their own hospitals.
Physician-owned hospitals have shown to provide equivalent
or higher quality care more efficiently and at a lower cost,
compared to community hospitals, resulting in significantly
better patient experiences and outcomes. Ms. Kean, you noted
the benefit patients see from going to an independently owned
hospital group. Do you think allowing physicians to own
hospitals would create more competition?
And also, what type of benefits have you seen regarding
patient care when physicians own their own place of work?
Ms. KEAN. Yes, I know a lot about that. You know, as I
said, we are 100 percent physician-owned, as a practice here in
San Antonio. We own two outpatient ambulatory surgery centers
100 percent, and we also manage them, and that is physician-
led.
We do not own a hospital. We were not able to do that,
unfortunately. But we did partner with a hospital in San
Antonio to help us, you know, get control over the care that
they are receiving in the hospital system.
But yes, I don't see a reason why a physician can't own a
hospital. I understand that there is regulatory, you know,
requirements as far as a referral relationship and where that
patient is going to go. But the physician actually knows where
the best place is for the patient to receive care. And I think
we just need to let them do that.
Mr. HERN. Thank you.
Mr. Chairman, I do want to note that when I said I got shot
with--by a bow and arrow from my brother, that they all kind of
smiled like they have worked on people who had been shot by bow
and arrows before. [Laughter]
Mr. HERN. So Mr. Chairman, I yield back. Thank you.
Chairman BUCHANAN. By the way, I have got two brothers, so
I know----
[Laughter.]
Chairman BUCHANAN. And three sisters. So I got--Mr. Davis,
you are recognized.
Mr. DAVIS. Thank you, Mr. Chairman, and I want to thank all
of the witnesses for very interesting insights and this
discussion.
I have been thinking I have been around health care now, I
guess, for a pretty good period of time. I have worked in
clinics, I have sat on the board of hospitals. I have taught at
medical schools. I hope that I can leave today with a feeling
that, yes, we are all concerned about conserving the private
practice of medicine, the independent, private practice.
I remember when I used to teach a course at the University
of Illinois School of Medicine, and we taught a course called
The Realities of Medicine. As young medical students would come
in, they would talk about their goals and what they wanted to
do. Of course, many of them would indicate that they wanted to
do family medicine, family practice. They wanted to be
internists. By the time they graduated, many of them would have
changed their positions and changed their minds, and would
decide that they needed to go into something that compensated
them a little differently, that the reality was they may have
wanted to do one thing, but when it got down to deciding, they
would find it necessary to decide that they want to do
something else.
And I guess there is always this business of economy, the
business of our economic system, and the business of where do
we and how do we equalize or try and equalize systems so that
the systems work together.
I am a sociologist. I am a big fan of a fellow called
Frederick Douglass, who used to say that he knew one thing if
he didn't know anything else, and that is that in this world
you may not get everything that you pay for, but you will
certainly pay for everything that you get, and that you pay one
way or you would pay the other.
I wonder if each one of us could give one thing you think
we can really do that would help conserve and preserve the
independent, private practice of medicine.
I have been reading the papers, and I have read several
stories in the last weeks or two.
So Dr. Gholson, why don't you just start and go?
Dr. GHOLSON. It is tough to give you just one thing, so I
am kind of torn between get rid of prior authorizations
absolutely, completely, and for--as primary care, paying us for
what we are worth.
Dr. RICHARDSON. Thank you. I think maybe one of the biggest
indicators or the biggest thing to keep us in business is just
updating the physician fee schedule so we can actually keep
pace with the cost of running a practice. Our overhead,
employee overhead, has gone up 30 percent in the last 2 years.
Our medical insurance goes up 10 to 20 percent every year. We
literally just can't keep pace with it, and we can't keep
hiring. So updating that fee schedule that keeps pace with that
cost would be beneficial.
Ms. KEAN. I would like to get the medical record back in
the hands of the physicians, instead of these AI tools and
insurance carriers. It has become a billing weapon, and not the
medical record that it used to be. I would like to see us get
that back.
Dr. DESAI. Congressman Davis, thank you for the question.
We have got to fix the Medicare physician reimbursement
schedule. And H.R. 2474 and 6371 need to be passed to allow
physicians to maintain practices to preserve that sanctity,
which you so appropriately referenced, between the patient and
the physician. We have got to fix that, and we need your help.
Dr. JHA. Congressman, my--if you--number one for me is
site-neutral payments. I think it is a major reason why we are
having--we are seeing physician practices get bought out.
Second, dealing with Medicare Advantage prior authorization
that we have talked about.
I also think physician fee schedule is important. But if I
had to order it, site-neutral; going after MA; dealing with
private equity. Those are major forces in the health system
that we have to deal with.
Mr. DAVIS. Thank you all very much.
Thank you, Mr. Chairman. I yield back.
Chairman BUCHANAN. Yes, Mrs. Miller, you are recognized.
Mrs. MILLER. Thank you, Chairman Buchanan and Ranking
Member Doggett, and thank you all for being here today.
I cannot agree more with the physicians on our committee
and the life that they have led, the lives you all have led,
and how important you are. You are so important.
I live in West Virginia, a very, very rural state. You
know, sometimes it can take from an hour to almost five hours,
really, to get to your doctor or to your hospital because our
terrain is just very challenging. But we need care. And, you
know, just for a routine checkup sometimes, it is critical that
our local, rural physician practices exist so that they aren't
always burdened, you know, with the far drive and the expensive
visits to a hospital for something very minor. That has worried
me for years, having to go to a hospital for something very
minor when you could go to your family physician.
Today's economic environment, with inflation through the
roof, and thanks to the reckless spending that continues to go
on with this Administration, many independent physician
practices cannot afford to keep their doors open. Frankly, I
think the Federal Government doesn't reimburse well enough to
make it feasible for you to do it at all. So this is a huge
issue for physicians, as well as patients.
Dr. Gholson, I was really disheartened to hear about your
struggles and your practice that you endured because of bad
policy. And I know firsthand how devastating it is to rural
communities to lose their local doctor. So to help paint the
picture for my colleagues that may not be from rural areas--and
there are a lot of them that aren't here that really ought to
hear this--can you go into detail about the different
physician-patient relationships that happen in independent
practices, particularly in rural areas, compared to physicians
in these huge practices?
Dr. GHOLSON. So to paint the picture of how rural my
community is, we are a one-stoplight town.
Mrs. MILLER. Yes.
Dr. GHOLSON. My patients would be able--they could walk to
my practice to see me, because we were right downtown. I was
able to do home visits with my patients, which gave you
incredible insight to what was going on in their life. I would
see them at Walmart, and they would talk to me about their
care. I would see them in church, and they would ask me
questions about which specialists they felt like they needed to
go to. And even though I closed my practice in 2022, I still
get those questions from my former patients, even today.
So you really are part of the community. You are part of
the fabric. You sponsor the local baseball teams. You are at
the team events for--as team physicians. The whole community
becomes like family.
Mrs. MILLER. You are almost the elder of the family, so to
speak. I mean, you are that--you are just that important.
As much as I would love to see every independent practice
thrive, I know that there are tons of challenges out there that
you all face that can drive you to close or sell your practices
and move into a larger health system. Prior to having to make
the impossible choice to close your practice, can you tell us
some of the pressures that come with competing for your
workforce with the larger health systems, or if there is any
pressure to consolidate your practices?
Dr. GHOLSON. So for me, competing with the local hospital
is probably the biggest thing with my workforce. I could not
compete with what they were able to pay my nursing staff. We
already had a nursing shortage going into COVID, and COVID
exacerbated the nursing shortage. A lot of nurses started doing
travel nursing.
Mrs. MILLER. Oh, yes.
Dr. GHOLSON. And so it was just very difficult to compete,
and physicians--and the hospitals had an advantage because of
the facility fees they were able to garner from the care that
they were receiving. So that made it very difficult to compete.
Mrs. MILLER. You are right.
Dr. Richardson, in order for people to understand more the
business side of Medicare reimbursement simply not being enough
to even cover the costs of operating in a rural area, are there
examples where Medicare regulations or reimbursement
requirements have limited your practice's ability to provide
high-quality services to your rural patients?
Dr. RICHARDSON. I think it is just more of everything is
more difficult when you are treating patients in rural areas.
Unless you actually have a provider in that area, from a
specialist standpoint, you are traveling. I mentioned earlier
we have 13 clinics throughout the state. Those are clinics
where we actually get in our car, grab our staff, and grab our
equipment, our scopes, our drugs, put them in our trunk, drive
to that community to run a clinic, and sometimes do some simple
outpatient surgeries at that local, rural hospital, and then
drive back. So it is just an increased burden. It is a burden
to your quality of life. It is a burden to your practice at
home.
We have had the discussion of consolidating care and making
patients drive to the Wichita metro area because we are so
overburdened there, and we just haven't had the heart to do it
because many of these patients simply cannot or would not make
the travel. They don't have the social support or the resources
to drive three to four hours.
Mrs. MILLER. That is right.
Dr. RICHARDSON. And honestly, I think one of the biggest
improvements we have had over the last couple of years, one of
the good things that came out of the pandemic, was actually
telemedicine.
Mrs. MILLER. Right.
Dr. RICHARDSON. There are so many of these patients in
rural Kansas that need a five-minute appointment with me that
can easily be done over telemedicine. And so we have tried to
take advantage of that when possible.
Mrs. MILLER. Thank you for that answer.
And I yield back.
Chairman BUCHANAN. Thank you.
Mr. Fitzpatrick, you are recognized.
Mr. FITZPATRICK. Thank you, Mr. Chairman. Thank you all for
being here today.
Medicare physician pay and its impacts on patient access to
care remains a major issue in my community in Bucks and
Montgomery Counties in Pennsylvania, as it has been and
continues to be across the country. While I was pleased that
Congress acted in the March 8 government funding package to
address the Medicare physician pay cuts, predictable,
sustainable reforms are still needed to prevent this in the
future.
As you all are well aware, adjusted for inflation and
practice costs, Medicare physician pay plummeted a total of 29
percent from 2001 to 2024, and physicians now face another
steep 3 percent payment cut at the end of this year.
My first question to you, Ms. Kean: Can you discuss some of
the impacts that this pressing financial instability is having
on physician practices, including things like difficulty in
retaining staff, trouble keeping their doors open, rising
costs, administrative burdens, and the like?
Ms. KEAN. Thank you for the question. Yes. I mean, trying
to retain our staff has been very, very difficult, and it is
not just the hospitals that we are competing against. I am
competing against retail entities that can just simply raise
their prices. We can't do that. And so that is probably the
biggest thing that is the impact there.
And yes, Congress, you know, must act. You know, Congress
must act to avoid these cuts. And we all cheer that, you know,
it wasn't as bad as it could have been. It is as bad as it has
ever been, and it needs to be addressed immediately. If this
panel is trying to figure out how to protect private practices,
that is the number-one thing. There is nothing else after that.
Mr. FITZPATRICK. And have you seen a disparate impact in
rural communities, underserved communities?
Ms. KEAN. Yes, absolutely. I mean, the rural communities
are impacted in a greater way. They are losing their doctors.
And, you know, just listening to the physicians here--I am
not a physician, but I am an advocate for them, and when I hear
these stories, it just breaks my heart. It shouldn't be like
that. And it is because of these things that, you know, we are
talking about today that are getting in the way of taking care
of patients, and for patients--or for doctors to even want to
be doctors. We need help.
Mr. FITZPATRICK. Dr. Desai, you had stated in your
testimony that since 2001 the cost of operating a medical
practice has increased by 47 percent. Could you explain how
these operating costs have impacted your practice and others
like yours?
And how do you think Congress can address this?
Dr. DESAI. Congressman Fitzpatrick, thank you for the
question.
You are absolutely right. The cost of seeing patients and
providing the care that these patients deserve and need is
astronomically different from when I started in practice. When
you look at the inflationary updates that Medicare hospitals
and skilled nursing facilities get that physicians simply
haven't been a part of and have been excluded from, it makes it
incredibly difficult to see patients on a day-to-day basis.
I can just give you an example. In my practice alone we
have to increase the volume of patients that we have to see on
a day-to-day basis to justify the increasing overhead costs
that I have to pay for these medical assistants to be able to
be in the exam room typing on an iPad, when I should be
spending time with you, checking you for skin cancer and
melanoma and creating that relationship, which I do on a
clinical basis, but I am challenged at the same time to make
sure I have assistance there to help me that I can afford to
keep to be able to see those patients that I need to see
because the overhead is high.
So it is an incredibly vicious cycle. And what concerns me
the most is that my job is to save lives from skin cancer, make
people's skin disease better, keep people out of the hospital.
It becomes incredibly challenging to do that when the day-to-
day practice of medicine keeps it very hard to simply keep the
lights on and to pay the bills to run the practice.
Mr. FITZPATRICK. Thank you, Dr. Desai.
I just want to associate myself with the comments of Dr.
Wenstrup. The world needs the United States of America, and the
only way we can be there for America and the world is if we are
healthy. And the only way we can be healthy is if the doctor-
patient relationship is healthy, as well. And the more--the
criticism that I have always shared with my colleagues about
the CFR, it is a cumulative registry. We always add to it, we
never address what is redundant, what is duplicative, and what
is actually outcome-determinative in the opposite effect, the
opposite direction of what the intended purpose of that
regulation was.
So I am hopeful that we are going to continue to work
together on this committee to address the redundancies. We
talked about several of them here. Prior authorization is
probably--I mean, in addition to physician cuts, Medicare
payment reimbursement, the amount of time you have to spend
dealing with bureaucrats rather than serving your patients
could lead to the death of health care in America. And we have
to address it with urgency.
I yield back, sir.
Chairman BUCHANAN. Mr. Beyer.
Mr. BEYER. Mr. Chairman, Ranking Member, thank you for
holding this and thank you for being here today.
My sister, my father-in-law, and my uncle all had full
careers as independent physicians, and I very much appreciate
that this is one of those wonderful pieces of Ways and Means
where almost everybody on the committee agrees that we really
need to make sure that we preserve the independent physician
practices.
To that end, Dr. Jha, I am the father of two Brunonians, so
I am glad to have you here. But you championed site neutrality.
And 10 years ago Mike Pompeo, when he was a humble member of
the House, and I sponsored a site neutrality bill, and I have
done that every year since, which means I get a lot of visits
from hospitals who tell me why this is such a bad thing, that
they deserve to get more because they are taking care of the
indigents. They have to be there 24 hours a day. They have all
these arguments.
From your perspective, why is site neutrality still so
important?
Dr. JHA. Yes, Congressman thank you.
Site neutrality is just critical for all of the reasons you
have heard today. Look, if the issue for hospitals is they have
to take care of a sicker, a more indigent population, we should
figure out how to pay for that directly. But what site
neutrality does is it totally perverts the health care
marketplace, where there is now this very large incentive for
hospitals to buy up physician practices. And that doesn't
increase access, it doesn't increase quality. All it does is it
just allows Medicare to pay a lot more. Consumers pay a lot
more through private insurance.
And there has been progress on site neutrality. I don't
want to say we have made no progress, but there are really
large sets of issues that are still not addressed.
I think I have heard from my friends and colleagues in the
hospital industry who worry about this. You know, we have a
long history in American health policy of doing X to solve Y.
If the problem is that hospitals are not getting paid enough
for certain things, let's pay them more to do those certain
things. Let's not have a policy that totally perverts the
marketplace. I think that is not the solution.
And it is creating--I mean, if you think about where
private physicians have been largely getting bought out, it has
largely been hospitals. Yes, private equity more recently. Yes,
MA is a huge part of the problem. But it is hospitals that have
been buying out practices because of a government policy that
we can reverse.
Mr. BEYER. By the way, that was exactly my family's
experience. My father-in-law retired, turned the practice over
to his younger colleague who, two years later, sold it to the
hospital because he had to.
So Dr. Gholson, we really appreciate all the challenges
that you and your practice have faced. You talked about--let me
quote--50 percent of your time on cumbersome administrative
tasks. We spent a lot of time up here on AI, and one of the
things that seems to be exciting is ambient clinical
documentation. Can you use that? Is it affordable for a
practice in Mississippi? Would that change your life much?
Dr. GHOLSON. So yes, I use AI now to help create patient
education materials. It saves time. I do have to review them.
I am really looking forward to seeing what AI does in the
documentation arena, because we spend a lot of our time
documenting. So I think there is some promise with AI.
I also am concerned on the flip side of what insurers are
going to do with AI that may be detrimental. So I think it
needs to have some guardrails.
Mr. BEYER. Yes, yes, yes. Every doctor I know is terrified
of a machine algorithm making the decision of what patient care
is.
Ms. Kean, you are not a big fan of the way we do EHRs. How
would you fix the electronic health record system?
Ms. KEAN. Oh, boy. That is a big question.
You know, I think that interoperability is probably the
biggest thing, and that is, you know, every single one of us,
when you come to our practice, we are going to ask you the same
questions. Why do we have to keep asking those questions over
and over again? Isn't there a way that we can communicate so
that, you know, if the first physician asks those questions, it
can be passed through to all of us?
We need help with that. It doesn't seem like it is
happening. We do get medical records from other providers, and
it does come in automatically. But in order to actually figure
out what the care happened, you have to go through all of the
MIPS checkboxes of everything that somebody has asked the
questions about that does not provide any real information to
the doctor that needs to treat the patient. We need to know
what that other doctor had to say, and what they are sending to
us for----
Mr. BEYER. Yes.
Ms. KEAN [continuing]. And how we are going to be able to
evaluate that, and then get that information back to them. The
rest of the information that we are being asked is really for
the record, from a billing perspective, and that is it.
Mr. BEYER. Great, thank you. I know the Veterans Affairs
Department and the Department of Defense are trying to work
hard just to make veterans and active duty military EHRs work
together, and it has been a huge and problematic problem.
All right. Thank you, Mr. Chairman, I yield back.
Chairman BUCHANAN. Ms. Tenney, you are recognized.
Ms. TENNEY. Thank you, Mr. Chairman, and thank you to the
witnesses and for your expert testimony.
I also really appreciate the insight that we receive on
this committee from some of our doctors: Dr. Wenstrup, also Dr.
Murphy, and also Dr. Ferguson, who serves on the main
committee.
And I have also served on numerous hospital boards, nursing
home boards, and we have seen this shift away from the doctor-
patient relationship that we were all concerned about happening
if we tried to centralize and federalize our system, our health
care system.
I am a practicing attorney. We see this, a similar thing,
happening in our legal field, where the bureaucrats decide what
legal questions are answered. The bureaucrats decide what
decisions judge make--judges make. My dad was also a judge.
But I want to just touch on a couple of things, but I first
want to ask all of you, because we have talked about these
issues in getting more doctors, better doctors, getting--more
interested in getting into the health care system. Could I ask
you, do you agree--and I am going to ask each one on the
panel--that we need to have and protect a merit-based system in
our health care field, that we have the very best people going
into this field?
And I just want to start with Dr. Gholson and go all the
way across the board. Do you think that that--we should
continue--or continue to protect a merit-based system in terms
of who gets to be a physician?
Dr. GHOLSON. I do think we need to protect the merit-based
system, but I also think that the merits need to be
transparent. We need to know the playing field by which we are
being judged. And right now that is not happening.
Ms. TENNEY. Okay. Can you just go on and give us, like, a
one-sentence answer? Thank you.
Dr. RICHARDSON. Yes, definitely merit-based. You can't walk
into an ER and have someone treating you that was there because
of other factors besides their merit.
Ms. TENNEY. All right, thank you.
Ms. Kean.
Ms. KEAN. Yes, I absolutely agree.
Ms. TENNEY. Dr. Desai?
Dr. DESAI. Thank you, Congresswoman. Absolutely. I think we
need to cultivate the best and brightest minds in this country
to go into medicine. We need that for the future of the health
care system. We have those people in our country. We need to
promote them to become doctors.
Ms. TENNEY. So transparently, we want to make sure that
everyone is qualified based on a neutral standard, not we don't
know who they are, we just know they are excellent when they
take their boards.
Dr. DESAI. And if they want to be a doctor, they can become
a doctor.
Ms. TENNEY. That is great. Thank you.
Doctor Jha.
Dr. JHA. Yes, I think I agree with my colleagues.
Transparent standards, merit-based. Very clear that we want a
workforce that can take care of the American people at the
highest quality possible.
Ms. TENNEY. Thank you so much.
I just--I want to jump into a couple of questions. So
Medicare reimbursement to these providers, various providers,
doctors who are failing to keep up with the increasing costs of
operating a physician practice, I hear--almost every doctor I
have had in the last 20 years has retired or been--ended up as
a hospitalist. You know, the cost of operating a practice, we
have outlined this all day today.
Medicare beneficiaries in my underserved area--Dr. Gholson,
I have towns in my district that have a stop sign, not even a
stoplight, so--and we have a dire physician need in upstate New
York, way up in the rural areas. So these are huge problems.
And the 2023 Medicare Trustees report identified ongoing
reimbursement gaps as a threat to long-term access to
physicians for Medicare beneficiaries. I wanted to ask you to
what extent has the growing gap between the operational costs
of independent physician practices and Medicare's actual
payment affected the viability of practices, and how has it
impacted patient access in rural areas?
And I want to ask Dr. Gholson that, and also Dr.
Richardson. If you could, just comment. We are struggling to
get any kind of MD in federally-funded health care spaces in
my--in entire counties in my district. If you could just say--
--
Dr. GHOLSON. Yes, I would--it impacts it tremendously.
Every January I hold my breath, waiting for the fix. In the
meantime, I am having discussions with my office manager of
what staff I am going to reduce hours or let go, which is going
to impact the access that my patients have to me.
Ms. TENNEY. And Dr. Richardson.
Dr. RICHARDSON. Yes, I think I mentioned earlier that our
employee overhead has gone up 30 percent in the last year, and
that is not the only sector within our business that we are
paying more for. So I would venture to say Medicare Advantage
plans actually decrease access because, at least where I am,
most of the specialists try not to participate in them. The
patients are always coming in saying, ``Well, I am trying to
find an insurance plan that my doctor accepts,'' and those
Medicare Advantage--or disadvantage plans, whatever you want to
call them--are actually decreasing access in my area.
Ms. TENNEY. Well, let me ask you, outside of congressional
intervention, you know, to update the physician fee schedule,
what else can we do? What kind of targeted reforms can we do
generally to the practice of medicine to create a stable,
predictable fee schedule that you can rely on, not knowing, you
know, year end to the changes?
What can we do? And I only have a few seconds left, but if
you could, jump in.
Dr. RICHARDSON. It has got to be tied to just the cost of
taking care of patients. As long as we are taking care of--and
we are able to keep a business open to take care of the
patients, whatever that fee schedule is----
Ms. TENNEY. Well, what can we do in Congress?
I mean, we would love to be able to give you better access
to that care, and better access to a reliable, stable,
predictable fee schedule.
Dr. RICHARDSON. Well, mark the index to the MEI, you know,
the updates need to be, I think, indexed to the MEI to adjust
for the cost of business.
Ms. TENNEY. Great. Thank you so much. I thank you all for
your great testimony.
And I yield back.
Chairman BUCHANAN. Mr. Moore, you are recognized.
Mr. MOORE of Utah. Thank you, Chairman Buchanan. Thanks for
holding this important Health Subcommittee hearing today on the
challenges facing independent physician practices.
And your expertise is very much appreciated today. Thank
you, witnesses.
A contributing factor to the collapse of private practice
are maybe well-meaning but overly burdensome reporting and
administrative requirements placed on physicians such as the
Merit-based Incentive Payment System, or MIPS. Quality
measurement in MIPS can be costly, time-consuming, and, at
times, bear little relation to physicians' actual performance
in providing quality care to beneficiaries.
One estimate found physicians spend an average of $12,800
annually to comply with MIPS's quality measure reporting,
devoting approximately 53 hours per physician.
A 2022 study in the Journal of the American Medical
Association found that MIPS scores are inconsistently related
to performance, and physicians caring for more medically and
socially vulnerable patients were more likely to receive low
scores, despite providing high-quality care. Kind of
counterintuitive, if you will.
And among a survey of small, rural providers, few
participants felt that MIPS would improve quality care or--
sorry, improve care quality, or provide administrative relief.
I had a group--as soon as I came, one of my first meetings
I came on when I came on the Ways and Means, even--came and
laid all this out for us on the issues that exist within the
quality care standards within this program. And this is not a
big attention-getting issue. This isn't going to cause a lot of
bickering back and forth between parties. This is a fundamental
problem, the way that CMS operates and it has existed for
years. It should be low-hanging fruit.
And I would love to just get a little perspective to find
ways to accurately reflect patients' outcomes and the value a
physician is providing to the Medicare program. Dr. Desai, do
you feel that quality reporting metrics and MIPS, more broadly,
do a good job of accurately assessing the level of care you
provide to patients?
What recommendations do you have to reform these quality
measures?
Dr. DESAI. Congressman Moore, thank you very much for that
very pertinent and valuable question, and I appreciate you
bringing up the challenges of reporting burdens, because
reporting is burdensome.
MIPS has not shown to help make care better as a well-
rounded outcome for patients. I can tell you, from my
experience, the art of that office visit, the 20 minutes that I
want to spend with you talking about your skin disease, some of
that goes into clicking buttons on an iPad that have nothing to
do with what you are there to see me for. For example, if you
are coming in to see me to take care of a melanoma, which is a
deadly skin cancer, half of the things that I have to report in
your chart that day have nothing to do with your medical
history related to your skin cancer.
We know that MIPS has caused challenges, and I will give
you one example. There was a study that actually showed doctors
who took care of patients from a higher social risk perspective
ended up with lower MIPS scores, and actually got decreased
reimbursement, even though they were taking care of patients
who are much more at risk, and have much more complex medical
illnesses. So we have got to fix MIPS. It hasn't improved
anything.
And what is challenging is CMS is now going into the next
phase of MIPS value pathways and other systems which are
seemingly supposed to improve that process, and have already,
prior to implementation, posed major challenges.
Mr. MOORE of Utah. So again, counter-intuitive.
Dr. Richardson and Dr. Jha, I saw you nodding, as well.
Anything to quickly add to that?
Dr. RICHARDSON. No, the reporting is largely meaningless.
He is spot on. Most of what we are reporting and spending
office time and personnel time to do has nothing to do with the
care that the patient is there for, especially when you are
dealing with specialists.
I take care of a lot of advanced prostate cancer patients,
and we are spending time charting, documenting, following up,
finding out if they had their colonoscopy or if they want to
stop smoking. And granted, those things are great from a
general practitioner standpoint, but many of these reporting
details, from a specialist's standpoint, are completely
meaningless.
Mr. MOORE of Utah. Thank you.
Dr. RICHARDSON. And there is no tie to quality or value.
Dr. JHA. Yes, and I will say this. This is a very classic
problem of policy. I think it was a well-intended program when
it was first created. It had bipartisan support. Some of us
were hopeful that it would actually work. It really hasn't.
Like, the evidence here is MIPS doesn't improve quality, it
just burdens physicians. And at this moment we have just got to
find a path forward.
And I will say quality reporting is important, as a
concept. The measure should be we should have a smaller number
of measures, it should be automatically collected, and they
should focus on things that patients care about, patient
outcomes. We can do that. We have the technology. That is not
what MIPS is achieving today.
Mr. MOORE of Utah. Even in my remarks that talked about
being well-meaning, well-meaning at first and it just hasn't--
it hasn't hit the mark.
We are working on a lot of things to enhance transparency
and incorporate provider, patient, and other stakeholders'
perspectives. Right from your initial responses, like, you give
me more motivation to continue on with that initial
conversation I have. Our team is all in on this, and would love
to engage with any of you and continue to any of my colleagues.
So again, thank you, Chairman, I yield back.
Chairman BUCHANAN. Mrs. Steel, you are recognized.
Mrs. STEEL. Thank you, Mr. Chairman.
Apart from Hawaii, California ranks first among the states
with the highest cost of living, between 35 to 45 percent above
the national average. California consumers have been--I mean,
have seen--prices grow about 20 percent overall in 2020, and
many are experiencing continued rising prices, especially in
services such as medical care, housing, and electricity, and
others.
At the same time, California seniors are facing a physician
shortage heightened from the pandemic, physician burnout,
rising overhead costs, and declining reimbursement. And the
physician shortage is impacting patients across--access to
necessary care. And it is much worse in California.
And I am just so glad that all the witnesses are coming
here that, you know, we can discuss about independent
physicians. And thank you for all coming.
And I just want to ask all the witnesses. California's
physician practice landscape is rapidly changing toward an
increase in market consolidation and vertical integration. That
is what I see in California. What do these trends mean for
patients I represent and to the doctors, for especially
independent doctors?
You can just--anybody who wants to answer it is going to be
great.
Dr. JHA. Well, maybe, Congresswoman, I will just start by
saying very quickly the evidence on consolidation is actually
quite clear when--whether it is vertical consolidation, it is
horizontal consolidation, consolidation that is really not
focused on integration and improving care tends to cost more,
patients have worse experience, physicians who practice in them
are--worse experience. It is sort of one of those rare things
where everybody is worse off, except maybe the provider
organization that can make more money.
So there is a series of things that we can do to deal with
that consolidation. We have talked about a lot about some of
those policies: site neutrality, dealing with MA, vigorous
enforcement of antitrust. But this is an issue that is really
prominent in California, but it is prominent across the
country.
Dr. DESAI. Congresswoman Steel, thank you very much for
bringing that up, and I appreciate you asking about seniors,
because I think it is incredibly important that we realize
that, when we talk about Medicare payment system, we are
talking about seniors being able to see a doctor for the health
care they deserve, that they have dedicated their lives for,
and that they need.
And I think that all of my panelists agree that, once we
get the appropriate level of inflation-adjusted reimbursement
tied to the MEI with bills like H.R. 2474 and 6371, we can at
least start to preserve and ensure that seniors have the access
that they need.
I will also mention that when we talk about access to care,
we need to make sure that the health care system still attracts
young students and young, bright minds to go into medicine who
want to become doctors and serve patients. Otherwise, when we
all become seniors, who is going to take care of us?
I give you an example of my daughter, an 11-year-old. She
wants to be a dermatologist and take care of patients with skin
disease when she gets older. I hope there is a practice of
medicine and dermatology for her to become one. I honestly
don't know what the future holds, and I really appreciate you
bringing up the aspect of seniors' care, because it represents
a phase of life that we will all be in at some point. Thank
you.
Mrs. STEEL. Ms. Kean, before you go, you know, you were
talking about the redundancy that, you know, you were asking
these questions that every patient is coming in, and AI is a
really big part of it. And I am glad that I am not on the--just
the Ways and Means Committee and our Health Subcommittee, but I
am on the AI task force, too.
So we have been talking a lot about health care issues
because we want to prevent that redundancy and time wasting
with the patients, and you can see--actually give more to, you
know, patients' attention instead of that, you know, asking
same questions over and over and then try to get the records,
you know, from the other doctors. So I just want to talk about
just a little bit more that, you know what--we have a policy,
and you cannot really share much about these patients and other
stuff. How are we going to help, and how are we going to store
these, you know, data?
Because I am on the Select Committee on China, too. So, you
know what? We see a lot of these data that has been stolen. So,
you know, how are we going to really, you know, store all these
data, and how are we going to share only with our physicians?
Ms. KEAN. Yes, I think that, you know, putting the care
back in the hands of the patients, and the medical records back
in the hands of the patients, I think, is probably the primary
thing that could happen. If you allow them to contain that, to
have access to the medical records, we are huge proponents of
that. We want patients to be 100 percent involved in their
care, and that means knowing what is in their charts.
I think that that is probably a way to go, and to find some
way to protect that would be, you know, critical.
Mrs. STEEL. Mr. Chairman, my time is up. I have a lot of
questions here, so I am going to just submit in writing.
Chairman BUCHANAN. Okay.
Mrs. STEEL. Thank you.
Chairman BUCHANAN. Ms. Van Duyne, you are recognized.
Ms. VAN DUYNE. Thank you very much, Mr. Chairman.
Two weeks ago the House Committee on Small Business held a
hearing on examining the impacts of the regulatory burden on
small practices. I am glad to see us holding this hearing in
this committee, and it is clear that over-regulating is killing
private practices.
In Texas's 24th district I have hosted a number of
roundtables with doctors, who have--many of--are attendees here
today as a witness.
Dr. Desai, thank you so much. It is great to see you here
today. I appreciate you making the trip up. I always make it a
point to ask our physicians how much time that they spend in a
screening. You were talking about this earlier, doing
administrative work versus face to face with their patients.
And it is shocking to hear the time that our medical providers
have to spend on compliance. And they would rather, obviously,
strongly prefer to spend the time with their patients.
In fact, one local doctor--I am sure you remember this--she
even shared a heartbreaking story about how she had finally
achieved the American dream. She had opened her own practice,
only to be forced to sell it because it got too expensive to
keep up with all of the government red tape.
When regulatory costs reach the point that it is no longer
feasible for small, private health care practices to keep their
doors open, it leads to one thing, and you have been mentioning
this all day: consolidation. That decreases quality of care, it
limits competition, which increase costs, and it limits the
possibility of physicians owning their own businesses, thereby
restricting access to care and ultimately hurting patients.
We can't continue to allow over-regulation to shut the
doors of small care providers, and I am glad that our committee
is focused on finding solutions to provide better and more
affordable patient care.
Dr. Desai, it is great to see you again. And I would like
to ask you what reforms that you would like to see that would
encourage higher quality care in Medicare, while reducing those
kind of burdens for physicians.
Dr. DESAI. Congresswoman Van Duyne, it is great to see you,
as well. And thank you, in particular, for your leadership and
all of the work that you are doing in this space, along with
the subcommittee and the committee.
I think you hit the nail on the head. I think the fact that
we are here in a meeting talking about physicians not being
able to dedicate their time to serving the patients' needs
because they are too busy filling out paperwork, clicking
buttons, on a phone call, hiring dedicated employees that are
full-time equivalents with full salaries simply to do
burdensome paperwork like prior authorizations like we have
talked about is the problem.
I think we have got to make sure that we, as physicians,
get reimbursed for the care that we are providing. And I think
the important message here is, with all of your leadership on
bills like H.R. 2474 and 6371, we can at least start to make
sure that those of us in private practice, those in academic
practice, those in large groups--this is all across the entire
health care spectrum--can continue to practice, and see those
patients, and keep the doors open.
I will give you one quick example. I had a patient with
severe eczema, which typically is something that we treat on a
very common daily basis, itchy red rash over the body. I can
get that better pretty quickly. This patient, a young law
student, an SMU law student, ended up in the ICU in the
hospital with total body erythroderma. Just picture a full-body
burn. The reason she ended up in the hospital, a 21-year-old
law student, highly-functioning, bright young lady ended up in
the hospital because of the fact that the insurance company
would not prescribe her the biologic medication that would get
her clear in two to three doses because they wanted her to--a
cream for a rash that covers 80 percent of her body.
Ms. VAN DUYNE. That is crazy.
Dr. DESAI. She was in the hospital in the ICU, almost died,
and now is recovering from that. So----
Ms. VAN DUYNE. Thank you for sharing that.
Dr. DESAI. Thank you.
Ms. VAN DUYNE. You know, we have heard many of the
Democrats that have labeled private equity as a villain, and I
have heard from a significant number of physicians that they
are starting to look into private equity as an investment so
they don't have to consolidate. What are the positive impacts
of private equity investment in medical practices?
Dr. DESAI. I think when we talk about competition, I think
competition is a good thing. I think access is a good thing. I
think when you have only one or two players in town, if you
will, that is a problem.
We, everyone in this room, is a patient at some point in
their life. We want to be able to pick the doctor that we like,
that we believe in their credentials, that we connect with,
that we can have a rapport with. If you have only got two to
choose from, that is going to limit your options. And I think,
when we encourage competition broadly in the best interests of
the highest quality patient care, that is where we need to
land.
Ms. VAN DUYNE. And you are saying private equity is
something that actually helps increase the competition within
those markets, as opposed to decrease?
Dr. DESAI. Well, and I think I would frame it in the way
that private--not all private equity is bad. Not every academic
medical center is great. Not every hospital system is great. I
think we can't label a one-size-fits-all approach. I think we
have to be open minded to make sure, hey, if you are a doctor
in this practice model and you can deliver exceptional care,
then you are doing a great job.
Ms. VAN DUYNE. Excellent.
Thank you, and I yield back.
Chairman BUCHANAN. Mr. Estes, you are recognized.
Mr. ESTES. Well, thank you, Mr. Chairman, and thank you for
allowing me to waive on to the Health Subcommittee, which I am
not currently a member of.
And thank you to all the witnesses who spent a lot of your
time today talking about issues that are important to you, but
also important to us. I want to particularly welcome Dr.
Richardson to our committee who is from Wichita, and I have
been to their facility there, and I appreciate the opportunity
to see, you know, the day-to-day activities.
You know, as you noted, Dr. Richardson, your practice
doesn't just serve patients in Wichita, but across the State of
Kansas and into Oklahoma. And also, you know, across the
country, physicians like you are serving rural Americans,
providing quality health care to parts of our country that are
too small to support specialists on their own.
Unfortunately, we are seeing the bureaucratic red tape,
lower reimbursement rates, rising prices are all weighing
heavily on your independent physician practices. And we are
seeing those private practices close or consolidate as a
result.
Mr. Chairman, I have a letter that Dr. Wenstrup gave me
from a primary care physician who talked about being an
independent physician versus being a hospital employee, and I
would like to submit that for the record.
Chairman BUCHANAN. Without objection.
[The information follows:]
[GRAPHIC] [TIFF OMITTED] T6472A.054
Mr. ESTES. Thank you.
You know, as I have spoken with patients and physicians and
support staff throughout Kansas, consolidating or closing
practices is not helping Kansans receive more or better-quality
care. With fewer and fewer doctors and nurses in private
practice, patients are seeing increased costs and, in some
cases, worse outcomes.
The Kellogg School of Management notes that prices increase
14 percent when a private practice is acquired by a hospital,
and a National Opinion Research Center survey found that 45
percent of physicians report deteriorating patient-provider
relationships after consolidation. These increased costs and
diminished outcomes are not the recipe for a healthy society,
and our committee must prioritize solutions that preserve the
vital role of private practices.
Dr. Richardson, I am especially intrigued by your practice
because you have been able to stay independent while serving
more than a million patients throughout rural parts of our
state. In your testimony you highlighted the fact that Wichita
Urology has managed to remain independent, in part because of
the shortage of urologists in Kansas. Unfortunately, urology is
far from the only specialty with a physician shortage in
Kansas, which, as you know, often impacts, most importantly,
the rural parts of our state.
Can you elaborate on how your private practice is still
open to serve these rural areas, and how that is not often an
option for physician groups that have been acquired?
Dr. RICHARDSON. Yes, thank you. Thank you for being here,
and nice to see you.
Yes, we are not unique in the specialty in our area that
does these outreach clinics. Gastroenterology, cardiology,
rheumatology, a lot of the specialists do the same outreach
clinics throughout rural Kansas because they know it is needed,
because they know that those patients can't drive three to four
hours, and those patients don't often have any specialists in
those areas.
Speaking on consolidation, there is a hospital system that
does own specialists that do no outreach, right? So that is--
that is the picture of consolidation in our area. The
independent physicians are reaching out doing telemedicine,
driving, having clinics at these rural communities to reach
those rural patients while the consolidated hospital system is
not. They are allowing those patients to drive.
You also mentioned the increased cost of running a medical
practice, the inflation. It is that reason only that we have
considered consolidating ourselves back to Wichita, and taking
our staff out of those outreach clinics. It is not because we
don't enjoy seeing those patients in the rural areas. It is not
because those rural patients don't need it. It is because we
almost can't afford it with the difficulty in hiring new
nurses, new MAs, the increased cost of running health care. We
have talked about, just from a financial standpoint,
consolidating. And like I said, we haven't had the heart to do
it, and I hope we won't, and I don't think we will. But that is
the only reason we have even had that conversation.
Mr. ESTES. Yes, I thank you for that. I know we have much
more importance around--the folks that live in Wichita or other
urban areas don't realize and take--I mean, they take health
care for granted because you may have 10 or 20 specialists 10
or 20 minutes away that you can actually interact with. It is
not necessarily the case in rural areas.
You also mentioned about site-neutral payments, and they
don't necessarily equalize. Can you provide further details on
how policies could be managed without necessarily reducing
payments to hospitals?
Dr. RICHARDSON. Yes, like I said in my opening statement, I
don't think the right thing is to just decrease payments to
hospitals. That doesn't necessarily help physician practices
stay in business. It doesn't help access, it doesn't help the
patients. But I do think that it is an unfair, unlevel playing
field. Right now we are competing with those systems for the
same providers, the same doctors, the same nurses, the same
MAs, which makes it difficult for us to run an independent
practice.
So I think site neutrality is, if not the most important,
one of the top two important things of keeping independent
physicians in practice. We are simply just competing against
someone that we can't beat. And so I think a more reasonable
solution would be to modestly have a decrease in the HOPD
payment and a modest increase in the physician. Knowing that is
asking to just decrease payments for hospitals. That doesn't
help our practice to stay in business, that doesn't help us
serve patients, and it certainly doesn't help increase access.
Mr. ESTES. Well, thank you, and thank you to all the
panelists.
Again, I yield back, Mr. Chairman.
Chairman BUCHANAN. Thank you.
I would like to submit a letter in the record from a doctor
in my community.
[The information follows:]
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Chairman BUCHANAN. Let me just kind of give you one easy
one, but I need to get kind of your thoughts and ideas on this
because we are going to wrap up, we are just about done.
Tort reform. I am from Florida. We have a lot of frivolous
lawsuits, a lot of lawsuits, and I am curious about how that
impacts your business--one, from premiums and two is just from
defensive medicine. I don't know how you can measure that, but
I think it is something that probably can be measured, where
people do procedures or things because they just want to be
careful or be sure about that.
The other thing is I can just tell you in our area we have
a lot of doctors, in their late 50s, early 60s, that have made
good money, surgeons and others, and they want to hang onto it,
and they are worried about practicing out there. If something
goes wrong, someone is going to take their net worth. And so it
is a big, big issue in Florida.
But Doctor, why don't we start with you, and we will just
run through here real quick? This is going to be the wrap-up
question.
Dr. GHOLSON. Thank you for the question.
In Mississippi we had state-level tort reform in the early
2000s, which made a huge impact on our ability to continue to
practice medicine. For family medicine in particular, it did
decrease the number of family medicine physicians who did OB,
and we are actually seeing the consequences of that now.
But I do know, for family medicine doctors who want to do
OB, the price of malpractice is still an issue. It is still
overtly high.
Chairman BUCHANAN. Yes.
Dr. Richardson.
Dr. RICHARDSON. So tort reform is never going to be turned
down by physicians, and it is a very important thing to
discuss, and I think it is a very good thing. It is very
specific, or it is very specialty-specific and very state
specific. There are some specialties where tort reform is
absolutely crucial to allow them to stay in business and
continue to work until they are 65. In some specialties, it is
not as crucial.
I think it pales in comparison to moving the needle
compared to site neutrality and physician fee updates. But it
is certainly an important thing to address, especially in some
specialties in states.
Chairman BUCHANAN. Yes, and I do know every state is
different. I put that--50 states, you all look at this a little
bit differently.
Ms. Kean.
Ms. KEAN. Yes. We in Texas passed tort reform a little over
20 years ago. And it--I can tell you, it just, you know,
firsthand, it absolutely impacted the malpractice rates our
physicians were paying. It decreased it substantially.
Texas is a very friendly state for physicians. We see a lot
of physicians that want to come there because of tort reform.
They feel like, you know, they won't lose, you know, everything
that they have worked so hard for if something terrible
happens. And so I would absolutely look to Texas to see how
they did that, because it is working very well for us.
Chairman BUCHANAN. Yes, I have heard good things about
Texas.
Dr. Desai.
Ms. KEAN. It is working.
Dr. DESAI. Mr. Chairman, thanks for this important question
and topic.
I will quote you a statistic. I read a study by the AMA
that said in 2022 over 30 percent of physicians reported being
sued. That is a staggering number, and that is exactly, to your
point, why there is so much concern from physicians to even go
into medicine or to continue practicing and doing procedures
that are well within their scope of practice, but out of fear
that they could be sued, potentially by anyone, depending on
their state legislation.
At the American Academy of Dermatology Association, we
certainly support broad, Federal medical liability system
reform, but we have got to put in common-sense limits into
these medical liability regulations. Thank you.
Chairman BUCHANAN. Doctor Jha.
Dr. JHA. Yes, very briefly, I am going to largely echo what
Dr. Richardson said. I mean, this is an important issue. I
think there is good evidence that the malpractice system in our
country leads to over-utilization of certain types of testing.
The defensive medicine we talked about, the data on that, I
think, is quite clear.
There has been progress at the state level. There are
certain specialties that are still at risk. It is one part of
the bigger picture we have been talking about today, which is
how do we keep independent physicians in check. We have got to
deal with all of the other stuff: site-neutrality, Medicare
Advantage, physician fee schedule updates. If we do all of that
and make this a part of that solution, I do think we can get to
a better place.
Chairman BUCHANAN. I think part of the reason that they go
after--in our state, again--the doctors is because they have a
reputation to protect, and they know that. And I think for some
of them, they take advantage of it. But I am glad to see what
Texas and some of the other stuff has done. Now, everybody
should have their day in court, in a sense. But my point is we
need to take a look at stuff that is frivolous.
But I want to thank all of you. I think it has been very
productive. I think our members are excited about the input we
have gotten. As someone mentioned earlier, you are all busy,
all successful people. We really do appreciate you coming up,
and you do have a big--you do make a big difference. Thank you,
and have a great day.
[Pause.]
Chairman BUCHANAN. Again, let me just add one thing. I
would like to thank our witnesses for appearing before us
today.
Please be advised that members have two weeks to submit
written questions to the witnesses--with answers later in
writing. Those questions and your answers will be made part of
the formal hearing record.
With that, the subcommittee stands adjourned.
[Whereupon, at 11:21 a.m., the subcommittee was adjourned.]
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