Independent physicians are cornerstones of communities across Florida. They build long-term relationships with their patients and provide trusted, high-quality care close to home.
But independent physician practices are being swallowed up at an alarming rate by hospitals and large health systems. Such consolidation is hurting patients in Florida and nationwide. It’s nothing short of a public health emergency.
The fundamental problem is that Medicare has repeatedly cut reimbursement for doctors in private practice. Without meaningful intervention from Congress, more independent practices will be forced to close, and just a few corporations will end up dominating the healthcare market.
Reverse Medicare pay cut
To prevent that outcome, lawmakers need to reverse the Medicare pay cut that took effect earlier this year — and permanently index physician reimbursement to inflation.
Most health care providers —including hospitals, hospices, and surgery centers — received a pay increase of 2.9% from Medicare this year. Physicians, on the other hand, got a 2.8% pay cut. It’s the fifth year in a row that Medicare has ratcheted down reimbursement for physicians.
Since 2001, Medicare physician reimbursement has fallen 33% when adjusted for inflation. Meanwhile, the costs associated with running a practice — including staff salaries, rent, and equipment — has surged by over 50%.
The financial squeeze that practices face is tightening. The Medicare Economic Index, a measure of inflation, is set to increase another 3.5% this year.
Independent physicians cannot continue to absorb shrinking reimbursement while the cost of running a practice escalates.
Hospitals are capitalizing on this financial distress — and are buying up independent practices at a significant clip. Since 2019, hospitals have acquired 7,600 practices. In 2012, one-fourth of physicians were employed by hospitals or healthcare systems. By 2024, that number had doubled to more than 55%.
This wave of acquisitions eliminates competition and drives up costs for patients. Research shows that prices paid to physicians affiliated with health systems and hospitals are significantly higher than those paid to independent practices.
For example, an MRI at an independent practice can cost around $450; the same scan at a hospital can be $3,000.
When hospitals are the only option, patients have no choice but to pay more.
Congress should not stand by and watch independent physician practices go extinct. Lawmakers can start by reversing the cuts that took effect at the beginning of this year — and raising Medicare reimbursement for the rest of the year to make physicians whole for the losses they’ve already incurred.
Rep. Greg Murphy, R-N.C., has introduced legislation to do just that — and 120 of his colleagues, both Democrats and Republicans have signed onto his bill. It must advance — ideally as part of the budget reconciliation process this year.
Short-term fix not enough
But a short-term fix isn’t enough. To ensure the long-term viability of independent physician practices, Congress must tie Medicare reimbursement to inflation. Doing so would provide physicians the financial certainty they need to invest in their practices, recruit and retain high-quality staff, and resist pressure to sell to hospitals.
Patients in Florida and across the country deserve a choice in where they receive care — whether that’s at a big hospital system or an independent physician practice in their community. Raising Medicare reimbursement for physicians will help preserve those choices and prevent hospitals and health systems from accumulating even more control over our healthcare system.
Congress must act — before it’s too late.
Dr. Eugenio Hernandez is chief medical officer for Gastro Health and a practicing gastroenterologist in Miami. This op-ed ran in the Palm Beach Post.