BK: Health systems have been actively consolidating — putting as many services as possible under one roof — in their markets, while at the same time continuing to lobby hard for higher reimbursements inside systems. They're acquiring primary care physicians now at a rapid clip, but many are also rounding out their specialty faculties. Everything will be designed for one-stop shopping without any need to limit cost, at least until there's a shift in reimbursement.

So over the past few years, many primary care physicians acquired by health systems have been incentivized to refer into the mother ship as often as possible for images and other diagnostics, and certainly for possible procedures. Under this widespread scenario, the cost of primary care services has skyrocketed compared to what it was when independent primary care physicians provided them. And the rate of unnecessary and inappropriate utilization has also risen, with horrendous cost consequences.
Employers have become demoralized and often don't believe they have alternatives. But they do. There's a growing sector of organizations like mine that have developed business models around disrupting the excesses that have become institutionalized in health care.
DMN: How is health system market dominance also working against what health care reform preaches — increasing quality and lowering costs in the system?

BK: At this point, many, many health systems claim that they're developing accountable care organizations, but all but a few are still operating off fee-for-service reimbursement, which means that they've had no incentives to change care and cost patterns or to invest in the infrastructure or cultural change that will be required to deliver care in different ways.

It is important to understand that, even while certain major aspects of the ACA remain unchanged, the health care lobby continues to work for changes in the law and in the rules that will define where the reform law's rubber meets the road. So far, we haven't moved much closer to real risk-based arrangements, and until we do, health systems have no real reason to improve quality or lower costs.

DMN: The Affordable Care Act clearly favors primary care over specialty care. You might disagree with that statement. Regardless of the law, how is primary care becoming more valuable than specialty care?

BK: The ACA really doesn't favor primary care in any meaningful way. If it did, then primary care would have "primacy" in terms of a change in its reimbursement and structure. There's been a lot of hoopla around primary care empowerment and medical homes, but the changes in what primary care doctors get paid has been pretty small, especially compared to their far better paid specialty colleagues.

Healthcare Act