Consolidation continues to shake up healthcare, increasingly endangering the fiscal stability of independent practices.
Here are three leaders' thoughts on the state of healthcare consolidation in 2024. Their remarks have been lightly edited for clarity.
Robert Bell, MD. Founder and Orthopedic Surgeon at Cypress Orthopedics (Houston): Independent medical practices and surgery centers are facing significant challenges arising from diminishing insurance reimbursements. This trend is significantly impeding their ability to maintain financial viability and operational continuity. Conversely, large healthcare conglomerates or hospital networks have positioned themselves to capitalize on these shifts, leveraging their scale and engaging in questionable collaboration with insurers. The overarching trend toward consolidation raises concerns regarding potential constraints on patient choice and diminished competition in select regions, thereby posing substantive challenges to the long-term accessibility and affordability of healthcare services.
Andrew Lovewell. CEO of Columbia (Mo.) Orthopaedic Group: The healthcare market continues to experience consolidation, large group aggregation and mid-market mergers/acquisitions. One big trend that has dramatically stalled is the number of private equity transactions in the healthcare industry. The private equity slowdown is due to several compounding factors, the largest being the interest rates and the cost of the financial growth for these entities. Unfortunately, nothing is getting easier about running our business. The continued cost pressures and decreased reimbursements plague the private practice arena and everybody else as well. Luckily, our group is large enough that we can weather the storm to some degree. The ability to sustain growth and scale is a must in the modern era of private practice. Our goal is to continue to scale our business and create more value as we add differentiated services to increase the patient experience and access to our services.
Matt Mazurek, MD, assistant clinical professor of anesthesiology at St. Raphael's Campus of Yale New Haven (Conn.) Hospital: I think consolidation has not really produced the results that were promised by the consolidation. First of all, access has not improved. It's gotten worse. Second of all, costs have not reduced — they've actually increased across the board. I don't see consolidation fulfilling all of the promises that were made when it was pitched, with some health systems having approached the leaders in a particular community promising access to various resources. It really hasn't come to fruition. Same thing with the physician groups. They promised physicians if they joined they would have resources and funding, but I don't see that that's actually come to fruition either.
I think there has been a lot of hope and a lot of good ideas that at the end of the day, the money is being siphoned off for some communities into other areas without any return on the promises made. So everyone's kind of staring at themselves wondering what happened. We sold our souls and have nothing. It's a huge issue.