The Ethics of Quality Care and Financial Resources
Tensions Comparing the Private Equity, For-Profit, and Non-Profit Business Models
Moderator Paul Weismantel brought forth the following questions:
Can a healthcare system with financial return obligations truly prioritize patients over profits?
With pricing driven by provider-insurance dynamics and a common need for revenues and margins to serve operations and growth, is there an inherent advantage to the non-profit model over a for-profit one in prioritizing outcomes, access, and the public health?
Can the Center for Medicare and Medicaid Services Value-Based Care bridge the ethical and financial divide?
Does the Private Equity business model conflict with the ethical provision of healthcare in hospitals, Primary Care Practices, and Specialty Care Practices?
Audience Response:
Today’s health system shows uncertainty, chaos, and lack of confidence. Patient’s health is first, not the health of the company.
Money is needed for all medical services to keep going.
Do doctors sign a Hippocratic oath or an employment contract?
We have to look at costs. This is reasonable.
DOCTORS (not companies) can prioritize patient over price.
Medicare limits the amount patients are charged. This is not so for those under 65 who are paying inflated rates due to Medicare limits.
A participant reported he was charged $112,000 for a knee replacement. The doctor received $3,000 with the remaining funds going to the hospital.
What is the value of service? If $1.00 worth of medicine saves a life, is the value $1.00? Or is the value of service billed on the value of a life?
There is more to this discussion than the doctors and patients. Insurance Companies also play a big part.
What is to be done for those who can’t afford medical care?
Is there an advantage of a non- profit over a for-profit for outcomes and access?
Private Equity and For- Profit companies can pay excess out in dividends A Non-Profit may use any excess for patient care or local giving.
Patient Experiences-PE Acquisition vs Control
Three years after PE acquisition patient ratings went down as well as patient recommendations for the hospitals.
Audience comment: Patient doesn’t know if he is getting good care.
Private Practice Consolidation
Hospital and PE Affiliated PCPs
Although PE-Affiliated PCP’s were only 1.5% vs Hospital Affiliated at 47.9%, trends of concentrated “roll-up” in focused areas may magnify the impact.
Pricing for Independent vs Affiliated PCPs is complex.
Higher prices for hospitals affiliated PCP’s could be due to insurance negotiation power.
Is higher price reflected in higher value?
Audience comments:
Private Equity is not necessarily bad.
Investors want to see a return on their investment
Is Private Equity Medical Care a business venture or a patient venture?
Value based programs reward health care providers for quality care.
The CMS (Centers for Medicare and Medicaid Services) value based pricing system aims to shift the US health care model from volume-based (fee for service) to value based care.
Providers are rewarded for quality care.
Private Equity Business Model
This revolves around acquiring, managing, and exiting investments in private companies to generate high return from investors.
Audience Comment: Hospitals don’t care, Doctors don’t care, Investors don’t care. Patients care, but doctors are a small part of their lives. Bureaucracy drives up the costs of medical care.