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Independent doctors' group opposes regional health system merger

Nathan Baker • Oct 31, 2016 at 6:32 PM

A representative of a nationwide organization for independent physicians spoke out against the proposed merger between Wellmont Health System and Mountain States Health Alliance Monday, saying a joining of the region’s two hospital systems could force non-affiliated doctors to sell their practices or leave the area.

Marni Jameson Carey, executive director of the Association of Independent Doctors, accused health system executives of “playing a shell game,” in which they claim the merger will increase operational efficiency, but will actually cause heath care costs to increase and limit patients’ choices of physicians.

She said independent medical professionals in the community have contacted the organization for help, but are worried speaking publicly against the merger could have negative effects on their careers.

“When hospitals start buying up independent physician groups, when they dominate a community, some physicians feel they only have one choice unless they want to relocate their practices,” Carey said. “If they want to stay independent, it can be difficult, because, if the system tries to buy them and they resist, the system might bully them.”

In some cases, she said, hospital systems could assign the independent physicians unfavorable operating room times in an attempt to cause patient dissatisfaction, or could recruit other doctors in their specialties to siphon patients away.

When employed by hospitals, physicians are sometimes pressured to encourage patients to undergo unneeded testing or procedures to bring in more revenue and improve system metrics, she said. Even comparing two similar procedures, one conducted at a hospital’s outpatient department could be more expensive than in a freestanding doctor’s office, because hospital systems charge facility fees to cover operational expenses for which they aren’t reimbursed.

The two systems’ answers to charges of cost increases for services should the merger be allowed are to point to their applications for state regulatory approval in Tennessee and Virginia, which propose caps on price increases tied to the national consumer price index.

The applications, for a certificate of public advantage, or COPA, in Tennessee and a cooperative agreement in Virginia, also describe the systems’ market share for hospital and outpatient services.

In an emailed response Monday afternoon, the health systems’ executives detailed their dedication to the area’s independent doctors.

“Wellmont and Mountain States have worked closely with independent physicians throughout the merger process and have used their feedback to craft commitments that benefit independent physicians,” the statement read. “It is important to note several independent physicians are serving on the Integration Council and the Joint Board Task Force as we proceed with the merger.

“U.S. AID is a Florida-based business organization, and its membership includes only one physician in Tennessee and none in Virginia. In fact, their membership represents less than one-tenth of one percent of physicians nationally. In contrast, Mountain States and Wellmont have developed longstanding relationships with thousands of physicians in our area. U.S. AID cannot possibly understand the fabric of our region and our unique needs, and their statements about our intentions and plans are incorrect.”

According to the application data, about 70 percent of all practitioners within the geographical area served by the two systems are independent. Wellmont directly employs 9 percent, Mountain States employs 17 percent and 4 percent are affiliated with Mountain States through arrangements for certain hospital-based services. The proportion of independent doctors in most specialties is at least 50 percent, according to the systems’ documentation.

“Both Wellmont and Mountain States continue to value a robust and successful independent physician community,” the applications, filed in February, state. “The New Health System intends to collaborate where possible with the independent physician community in procompetitive arrangements to build an array of service offerings that will be accessible throughout the region.”

In the COPA documents, health system leaders pledge to maintain open medical staff at all facilities, to not engage in exclusive contracting for physician services (except for hospital-based physicians), to not require independent doctors to practice exclusively at the system’s facilities and to not inhibit independents physicians’ participation in health plans and networks of their choice.

Carey said she believes the promises made in the COPA are little more than lip service to convince state regulators to approve the deal.

“I don’t believe any of that is going to stand up for long,” she said. “Once they have some leverage, I think you’ll see that go by the wayside. ... It’s not enough. They’re going to find a way to pierce right through that once they get the entities combined.”

The Association of Independent Doctors has aided the Federal Trade Commission’s efforts against health care consolidation in the past — Carey wrote several amicus briefs used to help the anti-trust agency win court cases to block or undo other acquisitions and mergers — and could do so in the local health systems’ case.

Through the states’ processes, FTC officials spoke at several public hearings questioning the need for the merger, most recently at a meeting of the Southwest Virginia Health Authority. Officials at that meeting decided to push back an expected decision on the merger until later this week to have time to fully examine the regulators’ questions and the health systems’ responses to them.

Carey said it appears to her that the FTC is preparing a case to oppose the merger.

“I think the FTC is poised to take action,” she said. “They’ve invested a lot in this case, and it’s one they’re keeping a very close eye on. I don’t think for a minute they would back away from this, and if they need our help, we’ll be there to give it.”

Wellmont and Mountain State executives issued a separate statement aimed at the FTC’s interest in the merger.

“The FTC’s staff continues to dismiss what our communities and local stakeholders have expressed, which is the importance of local control,” it read. “While the FTC has the ability to take whatever action they deem appropriate, Mountain States and Wellmont believe our proposal, which falls squarely within the law and involves the investment of hundreds of millions of dollars of enforceable commitments, is the most appropriate solution for our community.”

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