The Risk of Creating Healthcare Monopolies

Bruce Feinberg, DO: As we look at this idea and landscape, one of the significant limitations in many markets has always been the fact that there’s a monopoly issue. I’m from Atlanta. How many could there be? Now we’re pretty much down to a consolidation of 4 major IDNs [integrated delivery networks] for the area. And yet there are so many midsize cities in which there has always been 1 large hospital provider. I always struggle with this. I don’t know now, Mike, in your consultancy world, whether this comes into your environment where you could be in a midsize city that really has a single IDN. Dana, you have knowledge of it. I wonder how much consolidation can take place. How much further can it go? Is it a legal barrier that is going to stop it because of this monopoly phenomenon that would happen? That doesn’t seem to make sense because in so many markets, it is a monopoly.

Mark S. Soberman, MD, MBA, FACS: I think it depends on whether it’s a preexisting monopoly or not. For example, we’re a health system that is the only IDN in a community of a quarter million. There are no other hospitals. There are no other provider organizations. There are private practices. But look at how the FTC [Federal Trade Commission] has stopped some, as you know. We’ve seen it. There have been regulatory barriers. You could argue whether that’s a good or a bad thing, but the fact is that there have been barriers. Northwestern/Advocate was shot down. In the Northern Virginia market, Inova wanted to buy Prince William County, but they ended up being purchased by Novant in North Carolina. I’m still trying to figure out the logic of that acquisition.

Dana Macher: State law.

Mark S. Soberman, MD, MBA, FACS: Oh, I understand the logic from the FTC standpoint. I don’t understand it from Novant’s standpoint.

Dana Macher: Yes.

Mark S. Soberman, MD, MBA, FACS: I don’t know where it’s going because there are some that are de facto monopolies, but then sometimes the FTC says, “No, it’s not a good thing.”

Michael Kolodziej, MD: I’ve practiced in Albany, New York, and there are 2 Legacy Health systems. They hate each other. They will always hate each other. It’s almost unfathomable that no matter how compelling the business case was, they would work together. Just amazing. In Cleveland, you’re either chocolate or vanilla, and this is the case for Cleveland Clinic. Every single provider, every single hospital system in that entire area, is chocolate or vanilla, that’s it. They’re both too big to fail. I think from the payer’s perspective, having at least 2 helps you out because if there’s 1, then you have issues. I think that’s behind the FTC’s saying there’s a limit on how much you can consolidate this market because it will hurt way more than it could possibly help in any way, shape, or form.

Mark S. Soberman, MD, MBA, FACS: Interesting yet that they collaborate in a medical school in Cleveland.

Michael Kolodziej, MD: Yes.

Dana Macher: I would agree with that. Even when we’re thinking about life science companies and talking about these particular issues, we’re always thinking about the payer’s perspective, the relationship between the payer and the hospital system, who actually has the market power, and who you’re going to need to negotiate with. It’s always a balancing act.

Bruce Feinberg, DO: So much terminology is part of the current language of healthcare delivery that I find troublesome. We can’t illuminate all of them. But one that comes up a lot is patient engagement. The argument often has been that IDNs can do this better than traditional independent private practice. Now, clearly, they can build phenomenal architecturally distinct facilities: cancer centers with 20-story atriums. But what does that really mean for patient engagement? Is a Starbucks in the lobby patient engagement? I’m trying to understand, What is it? What are we talking about when we talk about patient engagement? Where is it relevant to clinical outcomes? Where does that patient satisfaction really relate to better healthcare, not the experience of a better environment? I’m curious because it’s often touted as a differentiator for IDNs.

Dana Macher: I think it gets back to having that breadth of services and patient engagement. There are a range of things, but one that certainly bubbles to the top is adherence, for instance, and having the ability to engage that patient at certain points along the continuum if they’re not adhering to their therapy. There are so many options to be able to engage that patient throughout the course of their therapy. I think that IDNs are fairly well equipped to do that if they have the technology in place to do it because they’re able to coordinate their care better and make sure that patients are getting their meds. If they have issues, they will make sure they’re getting to the right place and shift their site of care if it’s cheaper to go here than there. There are a whole host of things in terms of patient engagement that you can do.

Bruce Feinberg, DO: It’s interesting because in my experience of talking to doctors, they will argue that’s exactly what the benefit is of being in a community private practice where the doctors all know each other. In the huge monolith of the institutional setting, where nobody knows who you are, there are none of those things. It’s just interesting from their perspective.

Dana Macher: We’re not there now, but we could certainly be there. I think that from a services standpoint, they would be very well equipped to do that.

Mark S. Soberman, MD, MBA, FACS: But when I think of patient engagement, I really think about patients’ being a participant in their care, really being a stakeholder in their care, and helping to facilitate their care. IDNs do have a lot of resources. You have care managers, case managers, people. One of the things that I find fascinating is that there’s a lot of stuff going on in terms of technologies that can enable patient engagement, whether it’s automated phone calls or apps. There are a whole host of technology solutions. It’s the connected scale for your congestive heart failure patient that sends an alert to the nurse who can say, “Oh my goodness, Mrs. Smith gained 4 pounds yesterday.” Or the patient can be promoted to call. I think as we leverage those things, community doctors can leverage a lot of these things because these are very scalable from the very small to the very large. I think that’s going to help a lot.

Dana Macher: I think that just brings us full circle back to our original mergers and acquisitions discussion about Amazon or Google or Apple and the disruptive forces here to make these types of things possible.

Bruce Feinberg, DO: I’ll offer a cynical response that at this point, most technology solutions have been embraced by the well, the worried, and the wealthy but not by the patients who really need them. It will be interesting to see whether that’s going to change. But I think we all hope it does. We all hope that’s part of that solution.

Dana Macher: Mike and I both alluded to millennials in different ways. I go back to that they demand it. I think we all have kids. We know that our kids are attached to their phones, and whether they’re in their 20s or older, that’s not going to go away. We have to have solutions and be able to utilize that.

Michael Kolodziej, MD: They care less that their doctor went to Harvard and more that their doctor answers their email.

Dana Macher: Absolutely.

Michael Kolodziej, MD: I am really serious about that.

Dana Macher: Yes.

Mark S. Soberman, MD, MBA, FACS: You’re absolutely right.

Michael Kolodziej, MD: And so I do think that the playing field is going to change big time.

Bruce Feinberg, DO: Well, we’ve come to the end of another segment. As always, this has been a great discussion. Before we end, I’d like to ask each of you for 1 last insight regarding the topics we talked about today. We’ll start over here with Mike.

Michael Kolodziej, MD: I would say that the world is changing, and it’s going to change in ways that we cannot predict. We should be humble in how well we are doing things today. We should be open to the possibility that innovative solutions will allow us to do things even better. Rather than arch our backs and decide we’re just going to resist all this stuff, think about 2, 3, or 4 steps down the line. How is this going to make the care of my patients or my family members better in the end? If we do that, then I think we’ll get to a better place.

Dana Macher: Yes, I would say that we are at a critical juncture. I think everyone agrees that things are not sustainable either on the public side or on the commercial side, and I think everyone is working really, really hard to find solutions. To Mike’s point, we need to stiffen our backs because we ultimately will get there. I think that there are really exciting things that are a little bit down the road that will help us to get there. But we will definitely get there. There’s a lot of exciting stuff going on right now.

Mark S. Soberman, MD, MBA, FACS: I think there is a lot of potential. Two thoughts come to mind: The first is that we as providers need to make sure that we drive as much of this change as we possibly can rather than have the government or other folks tell us. At the end of the day, provider organizations, whether they’re community based or health systems, are at the point of the sphere caring for patients. The other thing I would say is to look at everything through the lens—anytime you’re looking to innovate or change something—of how you are creating value. Are you improving outcomes? Are you either maintaining cost or decreasing cost so that at the end of the day, you’re creating that value? Most important, create that value for the patient.

Bruce Feinberg, DO: Panelists, thank you. On behalf of the panel, we thank you for following this fall 2018 program of the American Journal of Managed Care® Oncology Stakeholders Summit® series. We hope you found this Peer Exchange information useful and that you’ll join us again as the series continues.