"America's doctors are rapidly disappearing into hospital systems. And government distortions, through Medicare's payment rules, are a big reason why. Higher premiums and out-of-pocket costs for patients are the ultimate result. According to a new study from the Government Accountability Office, the share of the country's doctors employed by or affiliated with a hospital system rose from 29% in 2012 to 47% in 2024."
"This discrepancy has enriched hospitals and strengthened their ability to acquire physician practices. Adopting site-neutral payments - that is, paying hospitals and private physician offices the same amount for the same care - would allow independent physicians to compete on equal terms with hospital-affiliated doctors. Such competition will ensure that patients have choices in where they can seek care and cut premiums and copays in the long term."
The share of doctors employed or affiliated with hospital systems rose from 29% in 2012 to 47% in 2024. Consolidation of physician services reduces competition, raises prices, and can lower care quality. Medicare reimburses higher rates for services provided in hospital outpatient settings than in independent physician practices, creating financial incentives that favor hospital acquisitions of practices. Adopting site-neutral payments would reimburse the same amount for the same service regardless of setting, enabling independent physicians to compete and promoting care delivery in the lowest-cost appropriate setting. Eliminating payment disparities would align care decisions with quality and access instead of facility status.
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