Monopoly Money

You know how good it feels. You finally did the right trade and now own Boardwalk and Park Place. Everyone who has the misfortune of landing on your block of expensive property pays through the roof, and you smile all the way to the bank. It is great fun owning a monopoly—unless, of course, you have those pesky regulators at your back, asking difficult questions about escalating rates and poor service. Converging issues in medical imaging bring to mind thoughts of the consequences of monopoly in health care. In the August 27, 2012, issue of the Wall Street Journal, Mathews1 chronicles the result of some of the deals currently in vogue in outpatient imaging. We have all experienced that little smile when we hear of a hospital acquiring majority control of an outpatient imaging practice, with the immediate upside of increasing reimbursement simply because of the change in ownership and the ability to bill at the hospital rate. Same physicians, significantly increased price: When you own Broadway and Park Place, you can do what you want. One important element has been missing from the due-diligence equation in these transactions, and that is consideration of the implications of a consumer-driven health-care environment. Now that patients are asked to pay much larger portions of their health-care bills, and now that health savings accounts and high-deductible plans have become the norm, consumers (patients) are newly empowered and are asking questions that are, frankly, not easy to answer. In the case outlined by Mathews, the cost of a routine echocardiogram in a cardiologist’s office increased four times over that of the previous exam—done in the same office, by the same people, a year earlier. For those who thought this was only of concern to health-care insiders, the article is very specific in stating, “As physicians are subsumed into hospital systems, they can get paid for services at the systems’ rates, which are typically more generous than what insurers pay independent physicians. What’s more, some services that physicians previously performed at independent facilities, such as imaging scans, may start to be billed as hospital outpatient procedures, sometimes more than doubling the cost.”1 The case is made for the role that competition plays in keeping costs (prices) down, and the case is made for a strong, continuing role for independent outpatient imaging providers. Consumer-driven choice, price transparency, and the generally negative effects of monopolies will drive business toward providers offering superior service, especially in those cases where it is obvious that the quality is comparable—and it is tough to argue that quality improves in acquisitions such as the one described earlier, when the physicians and protocols remain exactly the same. In California, arrangements such as these not only are having a negative impact on patients, but have also drawn the attention of the state’s attorney general, who is investigating whether affiliation agreements between physicians and hospitals violate antitrust regulations. As a raving capitalist, I am all for deals that make sense to everyone and that realign providers in ways that benefit the enterprise, while also providing for optimum patient care. Virtually every radiology practice that I have visited over the years has, as one of its core values, a focus on doing what is right for the patient: patients first, superior quality, excellence in care delivery, and so forth. We all have the right to maximize the wealth of our respective organizations, and in a free-market economy, the smart and hard-working among us will (and should) enjoy financial success. It is painfully obvious, though, that behind-the- scenes deals structured simply to get a short-term price increase—because the resulting monopoly can get away with it— are not in the best interest of the patient; will not succeed, in the long term; and are antithetical to the notions of competition and consumer choice. This profession has been wonderful for all of us. It provides a great deal of professional satisfaction, its financial rewards are exemplary, and the contribution that medical imaging has made to humanity gives us all a sense of pride in the roles that we have played in these achievements. As a result of the trust and responsibilities that we have earned, it is important that we continue to be worthy stewards of these precious resources. Monopoly might be a fun game, but in the real world, there is very little good that can be said about it. The national media and state regulators see through it, and they are shining daylight on deals that seem structured to control both Boardwalk and Park Place. Those who are currently benefiting from these arrangements had better enjoy them while they last.