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In the News: Modern Healthcare Profiles Altais, and the Burdens Facing Doctors and Other Providers

Modern Healthcare profiled Altais, the services company which Blue Shield invested in. The story also highlighted the administrative and financial burdens placed on providers in California.

Blue Shield created Altais because fewer and fewer doctors are staying independent. Physician practices are burdened by administrative work and sometimes can't afford to upgrade their technology or acquire tools to succeed in new payment models, Bailet explained.

Burned out doctors may feel compelled to retire early or join health systems or other organizations that employ physicians, which leaves patients having to find a new doctor or learn to navigate a health system, he said.

"When these physicians go from independent practice into an integrated delivery system, the costs go up, and one of our objectives is to make healthcare more affordable," he said. "So keeping physicians independent but professionally gratified and technologically enabled is very, very important."

A wealth of research backs him up. Economists say it is well-established that consolidation among healthcare providers increases costs. A 2014 study by Stanford University researchers also found that hospital acquisition of physician practices led to significant increases in hospital prices and spending.

In California, the percentage of physicians in practices owned by a hospital increased from 25% to more than 40% between 2010 and 2016, according to a 2018 study funded by the Commonwealth Fund. The same study found that hospital acquisitions of physician practices is associated with higher prices for outpatient visits and higher insurance premiums in the individual marketplace.

Health insurers have also started employing doctors in a bid to gain better control over spending. UnitedHealth Group's healthcare services subsidiary Optum has led the charge to buy medical practices; most recently it bought DaVita's medical group, which employed more than 750 primary-care physicians.

Read the full story here.