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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. Did you see the guest essay in The New York Times the other day with a headline that explains the premise? The headline was, "Your Exorbitant Medical Bill, Brought to You by the Latest Hospital Merger." The article is by Elisabeth Rosenthal, senior contributing editor at KFF Health News. She's a former ER physician and author of the book, An American Sickness: How Health Care Became Big Business and How You Can Take it Back. She'll join us in just a minute. Here's one soundbite, first, just to show that this issue now has President Biden's attention, too.

Joe Biden: This morning, the Department of Justice and the Federal Trade Commission released their new merger guidelines. Anti-Competitive mergers can hurt people and drive up costs as well. For example, hospital mergers have led to price increases of 20% or more. Health insurance mergers have caused premiums to go up 7% on average. All told this kind of industry concentration cost a typical American household an estimated $5,000 a year.

Brian Lehrer: President Biden speaking to his administration's competition council last week, thanks to CSPAN for the audio. Now Elisabeth Rosenthal to explain what's going on with hospital mergers, why they're pushing up hospital bills, and why it's difficult to stop them. Elisabeth, thanks for coming on. Welcome to WNYC today.

Elisabeth Rosenthal: Thanks for having me, Brian.

Brian Lehrer: Can I start with a local example, to start out, even though I'm not sure New York is suffering the worst of this. You mentioned Northwell Health in your article, very dominant on Long Island. What separate medical institutions did that use to be and what is it now if you can do some basics on that?

Elisabeth Rosenthal: It used to be-- the main hospital in Northwell was, I believe, Long Island Jewish. It slowly grew by acquiring first other hospitals, and then increasingly what happens is the dominant hospital player will acquire physician practices, X-ray facilities, maybe outpatient surgery centers until Northwell rightly, first they rebrand their name, of course, and then they say they are the largest healthcare provider in New York. New York actually has others but, certainly, Northwell has become dominant in size, not just on Long Island, their tendrils extend all around New York now.

What happens when hospitals have a monopoly, it's a local monopoly, but in a big swath of area. The research shows, as President Biden said, the prices tend to go up 20%, choice goes down, and quality goes down despite all of the avert good things that will happen from efficiencies they don't.

Brian Lehrer: Northwell, including Long Island Jewish, as you mentioned. Also North Shore Hospital in Nassau County and other anchor institutions there. I have family members who wind up using the Northwell system a lot because it seems like every other medical practice you turn to on the island is Northwell affiliated. I was surprised to learn when I got a new eye doctor in the Bronx a couple of years ago that he is a Northwell Health physician.

Is New York a little bit exempt from the worst of what you write about in your article? We'll get to what the worst is and why you say 75% of the country, or 75% of the markets in the country are now considered consolidated, which often means there's only one medical system. In New York, of course, there is the Northwell System, there's the Montefiore System, there's the NewYork-Presbyterian/Cornell Weill Medical System. Would you say New York is suffering from monopoly healthcare in the way that many other parts of the country are?

Elisabeth Rosenthal: Not as bad as other parts of the country. I actually asked some of the FTC experts about this because New York is unusual in that it does. There's also Sinai and NYU. What economists will say is, yes, there are a lot of hospital systems in New York, but more competition is better than less. In fact, they don't really compete with each other that much in terms of price because, for example, once they own the surgery centers, and once they own the doctors, if you go to, say, a Sinai emergency room, you are going to be trapped in the Sinai system because they own everything, both horizontally and vertically.

I can give you a little example of that. My mom went to an emergency room, or it was one of these standalone ERs and she had a small sacral fracture. Where did she go? It was a Northwell standalone center. She was taken up past NYU and past New York Hospital where she had doctors to Lennox Hill. The big question is how do we define a monopoly? New York is a little unusual, but it's not exempt from the effects. In many other parts of the country, it is a genuine monopoly. There's like one game in town and you can't get out of the system. It's almost like those early days if you had a Mac computer, you were stuck with everything Apple. That's what healthcare has become.

Brian Lehrer: Listeners, if you're just joining us, our guest is Elisabeth Rosenthal from KFF Health News, a former emergency room physician herself, and the author of a guest essay in the New York Times the other day that maybe you saw called, "Your Exorbitant Medical Bill, Brought to You by the Latest Hospital Merger." We do want to invite your stories about this, help us help her report this story. If you're a patient, she was just telling the story of her mom, how about you as a patient? Do you think hospital consolidation has increased your medical bills in any way?

If you are a doctor, if you're a hospital administrator, you are invited to call in, 212-433-WNYC. What about the quality of care? 212-433-9692. You can also text to that number or tweet @BrianLehrer. There's a retired physician calling in whose call I want to take first because It seems like he has a long view on this and has watched this creeping era of consolidation over a lot of time. Don in Newark, you're on WYNC. Thank you so much for calling the show.

Don: As a physician in the past and now as a patient, I'm really amazed at how things have changed. For example, you did mention that 99% of physicians are really owned employees of these healthcare corporations, so their private offices are really these corporate offices you go to. The pressure is tremendous of physicians because they have to spend so much time with paperwork that they turn themselves over completely to these corporations. They no longer practice medicine or take the responsibility, but the way it's set up, when you enter as a patient, you think you're seeing this one physician and developing a patient-physician relationship.

You begin to see that, especially when you go to the hospital, you're in the hands of a lot of people that you've never heard of, you don't know anything about, and your relationship with the physician is very minimal. Besides the issue of costs is the issue of the quality of care is now being dictated at corporate level with 99% of physicians paid a nice salary, but then they're asked to turn over produced income with reviews every six months-- [crosstalk]

Brian Lehrer: To the system, yes. We did a separate segment on this recently on what many doctors see as a moral crisis in the field because they feel pressured by these systems that are employing them now when they're not in really private practice anymore, but they're in the system to skimp on tests and treatments that they might think are necessary and morally warranted because it's best for the bottom line of the system. You're relating to that piece of it as well as cost. Don, thank you very much for your call.

Elisabeth, could there be an upside to any of this? Do you report on any upside? Like if you're in a system and people are coordinating your care, especially if you have something complicated, is there something to be said for being in a system of coordination like that?

Elisabeth Rosenthal: Of course, there's a theoretical upside, and I guess the question is, when these systems form and when they come together to form this kind of local monopoly or regional monopoly, what's the motivation? Is it to coordinate care or is it to make more money? Of course, I think the evidence that your caller spoke about speaks to the make more money. You go into what looks like your longtime doctor's office and suddenly you get a hospital facility fee because that practice has been bought by a hospital.

When you speak to physicians, here's the problem. When our health system is dominated by these monopoly hospital systems, and hospitals, remember, are the single biggest cost to patients, what happens is those poor independent practices, they can't negotiate good rates with the insurers. They need that big hospital system to negotiate a good rate for them because if you're just a guy in the Bronx trying to practice, you don't have a lot of sway with the insurers but if you then join Montefiore or you then join Northwell, then they are negotiating with you and your rate will be better.

Also, it's a devil's bargain because then the overlords at the system are saying, "Okay, you have to increase productivity. Maybe you have to order more scans because that's where the money is," or maybe, "No, don't order that test because it's too expensive." Many doctors are now judged when they join these large monopolies, not on the quality of their care, but on how much revenue they're bringing in. They're told how many relative value units they are billing. Of course, that's the wrong motivation.

Brian Lehrer: Funny, maybe because we mentioned Northwell as one example at the beginning, but we're getting all kinds of calls from people who are saying Northwell has taken over from one local practice or another, and some callers are saying they're improving care. It's a better experience. Others are saying it's gone downhill. Let me take one of each just to get a little of this on the table. Doris on the Upper West Side, you're on WNYC. Hi, Doris.

Doris: Hi. Good morning. Yes, I wanted to disagree with the person who I don't get the name of the person who was speaking, we just heard this, but I know that the hospitals south side and Good Samaritan near Bay Shore and their quality of care has really improved. I think the mergers of the hospital, Northwell, has brought a lot of upgrading to the hospitals that it has, and the quality of care is much better. My concern is the private equity firms. They are buying up healthcare.

A private equity firm brought CityMD, which is all over Manhattan. I'm on the Upper West Side. That terrified me because these private equity firms bankrupt everything that they buy sooner or later, and they change the quality of care. That's my comment that--

Brian Lehrer: Doris, thank you very much. I'm going to get somebody with a different impression of consolidation under Northwell. Catherine in Manhattan you're on WNYC. Hi, Catherine.

Catherine: Hi, Brian. Yes, I was going to a general practitioner family doctor on the Upper East Side, and Northwell took over and that doctor left, much to my sorrow, and everything has just gone downhill, including going to their specialists. I--

Brian Lehrer: Like what? What's gone downhill?

Catherine: It's frightening. Now you usually see residents and you can't get an appointment with a gynecologist. They want to send you to the-- it's my health insurance, they don't have great health insurance. They want to send you to nurse specialist--

Brian Lehrer: A nurse practitioner.

Catherine: Nurse practitioner. Thank you. It's like, "Wait a minute, what's going on?" Yes, nurse practitioners are important for the medical care, but there doesn't seem to be any supervision.

Brian Lehrer: Catherine, thank you very much. All right. We could continue with people's reviews of Northwell from A to F, but you get a little idea of the range there. Elisabeth, the first caller mentioned the urgent cares. Is this an improvement? Like if you had an emergency in the past, you either had to go to an emergency room, or you had really lucky to have a primary care physician, or even less likely, a specialist who could take you in on a moment's notice.

Now it seems like there's an urgent care every other block, and at least there's somewhere you can go. It's like there are primary care physicians for emergent needs all over the place. It's obviously done for financial reasons for these hospital systems, I guess, but is it a good thing?

Elisabeth Rosenthal: As a physician, I would say it's not a good thing because particularly young people hop around to these primary cares and basically physician practices used to have to have people on call over the weekends. That was the tradition if you had a question. Now they've outsourced that to these urgent care clinics. The fact that they are on almost every corner tells you that they are highly profitable. They're not there because they're of their good works.

Many are owned by private equity, which tells you what the motivation is. The private equity isn't there to care about your diabetes. That relationship with a primary care doctor is the foundation of most health systems around the world, good health systems. That you have a single doctor who knows you, who knows that your platelets have always been low, that you have a tendency towards depression maybe. You go into these urgent care and it's like one and done, that problem may be solved, but there's the larger context in that relationship is lost.

I would say, yes, it's convenient. It may be helpful on weekends. When I was an emergency room doctor, actually what happened is you didn't go to an emergency room on weekends. We had an urgent care clinic in the hospital that was open on weekends. You could get that kind of care. That's gone now because emergency rooms are profitable, urgent clinics and hospitals are less so. It's been outsourced to the market and to private equity. I think it really degrades patient-doctor relationships.

Brian Lehrer: You may have-- I heard the quote of the week on the show, and it's only Monday, "Private equity isn't there to care about your diabetes," says Elisabeth Rosenthal. One other thing, though, in the local New York context, and I know your article has a national angle and it starts with an example in, where was it, Tennessee?

Elisabeth Rosenthal: Yes.

Brian Lehrer: Where there really only is one hospital system Ballad Health but another difference I think in New York, and when we talk about private equity is that all the hospitals in New York state, correct me if I'm wrong, but I think they have to be not-for-profit institutions. If that's the case, where does the profit motive come in, and can private equity get its hooks in New York hospitals?

Elisabeth Rosenthal: I think the term not-for-profit as it applies to hospitals is a misnomer. There are technically not for profit, but they do have a lot of operating surpluses, which they invest. They often have big investment funds. They partner with venture capital. They make a lot of money. The sad thing is, for years, the Federal Trade Commission which is tasked with monitoring hospital mergers, did not bring cases against hospitals when they merged, because judges would say, "Oh, these are not-for-profit groups. They would never do anything like use their monopoly power to harm patients or to raise prices.

Of course, history has proved that incorrect. One of the most alarming statistics President Biden has said, I want the FTC to go after these mergers. The FTC, with its workforce and with how hard it is to prove that a merger is anti-competitive, has blocked, I believe, seven in the last two years. Meanwhile, there've been 40 to 90 mergers a year. They're really behind the eight-ball, and economist on the left and on the right are really concerned about this.

Brian Lehrer: Last question. Why is it so hard to regulate in the antitrust system hospitals, as you argue it is in your article? You gave examples of other things that have been regulated recently, airlines, other sectors of the private economy where they really have broken up monopolies or refuse to allow mergers to go through, but not so much in the hospital sector. Why?

Elisabeth Rosenthal: Part of it is that hospital monopolies tend to be local and regional. The FTC has to go in and investigate how much of a market you have to control to have a monopoly. Do you have to just have all the hospitals, but not all the outpatient centers? If you have two competing systems, you in theory-- for example in the Bay Area, there's Sutter, which is one of the bigger monopolies, and there's the University of California at San Francisco.

Would you call that a monopoly? Technically there are two chains, but Sutter has so much control over Northern California. It's effectively raised prices to much higher rates than in Southern California. It's that a monopoly or not? That's hard to define. Then the second problem they have is that many of these monopolies and large conglomerates occurred in the last, say, 20 years, and if they go in now and say, "That's a monopoly." How do you unwind a big hospital system?

Their medical records were already joined. They may have closed some hospitals. It's very hard to undo a monopoly once it's there. As James Capretta told me from the American Enterprise Institute, they're probably 15 years behind the 8 ball, and that puts him at a huge disadvantage despite President Biden's and Lina Khan, the head of the FTC, her good intentions to try and do something in this space.

Brian Lehrer: Elisabeth Rosenthal, her guest essay in The New York Times last week, Your Exorbitant Medical Bill, Brought to You by the Latest Hospital Merger. Thank you for sharing it with us.

Elisabeth Rosenthal: Thanks for having me.