Protect Patients in Any Health Care Market Consolidation

TMA Testimony of Arlo Weltge, MD 

Senate Business and Commerce Committee
Relating to the consolidation of the health care market and its effects on consumers and competition

Dec. 11, 2018

Mr. Chairman and Members of the Senate Business and Commerce Committee, thank you for having me today. My name is Dr. Arlo Weltge and I am an emergency medicine physician from Houston. Today I am testifying on behalf of the Texas Medical Association and its more than 52,000 members. 

Rapid consolidation in the health care market is an issue of concern to physicians as well as the public. Insurance company mergers and hospital mergers, along with the ongoing hospital acquisition of physician practices, may result in: 

  1. Reduced patient choices; 
  2. Increased health care costs; and 
  3. Decreased physician input into clinical decision-making.   

As hospitals continue to merge in Texas, physicians on medical staffs may have less influence on hospital operations. And it becomes more difficult for small physician group practices to survive. Physicians, both solo and in established small medical groups, feel pressure to merge into large practice groups or enter into employment agreements in order maintain a viable practice. 

TMA’s bi-annual survey reveals that that the majority of physicians fear consolidation will cause them to lose their independence in clinical decision making. Additionally, 23 percent of respondents saw cases where physicians lost employment, contracts, or hospital privileges after raising issues about hospital regulatory compliance or patient care quality — and 35 percent of physicians were concerned it could happen to them.

In 2011, the 82nd Legislative Session passed SB 1661, which included certain protections that were designed to prohibit a 5.01(a) organization (which is an organization that is often used by hospitals to employ physicians in Texas) from interfering with, controlling, or otherwise directing a physician’s professional judgment.

This was an important step forward. However, the legislature must work to continue to enhance protections for physicians to retain their independent medical judgment.  

In order to promote optimal patient care, physicians must feel free to treat patients in accordance with their medical judgment and to voice concerns related to hospital interference with that judgment without fear of reprisal.  

Last session TMA supported the House Committee version of SB 833 by Sen. Bryan Hughes (R-Mineola) which would have enhanced the protections enacted in SB 1661 by:  

  1. Including additional non-retaliation provisions in the law; and 
  2. More clearly defining the complaint process under which a physician could file a complaint with the Texas Medical Board (TMB) if a 5.01(a) violated the Medical Practice Act.  

Under existing law, the TMB certifies the 5.01(a) health organizations and has the authority to impose administrative penalties for violations of the Medical Practice Act as well as to revoke a 5.01(a)’s certification. However, enforcement has been lacking, likely because a more robust system for complaints is needed.  

Finally, I would like to share physician concerns regarding pharmacy benefit manager (or PBM) interference in patient care. Some health plans have their own in-house PBMs, but there are also several large national PBMs. CVS is one such national PBM and they recently merged with Aetna. 

We are concerned that PBMs may be making unilateral decisions that override physician judgment concerning: 

  1. The best pharmaceutical treatment for the patient; 
  2. The medications that should be included on formularies; and 
  3. The cost structure that should be applied to medications administered in the physician’s office, as well as those obtained through prescriptions.  

The lack of transparency regarding these decisions is concerning. It is driving up the cost of health care and interfering with the physician’s medical judgment (ultimately to the detriment of Texas patients).  

As physicians, we would hope to see some level of oversight of PBMs addressed in the upcoming legislative session.  

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Last Updated On

December 12, 2018