The big business of ambulatory care

Proposed regulations threaten to put profit before quality

Ambulatory care can seem like a practical way to deliver healthcare, but the rapid expanse of for-profit ambulatory care may well undermine primary care networks and the financial viability of safety-net hospitals and systems.

The state’s regulatory planning body, the Public Health and Health Planning Council (PHHPC), is considering new regulations for the establishment and oversight of ambulatory care services, including physician-based mega-practices and non-hospital surgery, retail clinics, urgent care centers, free-standing emergency departments, advanced diagnostic imaging, and radiation therapy.

The big squeeze

Proposed recommendations overwhelmingly favor market-driven controls, outsource oversight to third party accreditation organizations, and eliminate or limit Certificate of Need (CON) review for most providers. The results will be the unrestrained proliferation of ambulatory care services, resources diverted out of the system, and substandard care as the norm for the least advantaged.

Ambulatory care is a big and growing business. In 2012, private equity firms invested nearly $4 billion in health and medical services, a four-fold increase since 2009, with clinics and urgent care centers accounting for much of that growth. Minimal regulatory hurdles help make these attractive investments.

Profits from privately owned retail clinics — such as CVS’s MinuteClinic and The Clinic at Walmart — stem from revenues from new customers and greater sales of prescriptions and health-related products. Most often, these clinics serve low-income people who have delayed getting care and don’t have a doctor or usual source for getting care.

Like retail clinics, the convenience of urgent care practices draws patients, though typically those with more serious medical needs. Research has shown that urgent care also attracts patients without a regular source of primary care.

Health insurers looking to increase profits may promote using retail clinics and urgent care centers because they save the insurers money. But this is likely to leave physicians and community health centers to care for the chronically ill while clinics skim off high-value patients. The insurers’ push to avoid emergency departments, an essential part of the admissions process, will further squeeze hospital finances.

Beyond the financial strain that this model creates for safety-net hospitals and established primary care networks, an approach to healthcare that relies heavily on episodic treatment may significantly increase the risk of missing underlying health problems and it threatens the very goal of improving health through coordinated care.

Risky business

The draft recommendations would allow the corporate practice of medicine, an exemption currently limited to dialysis providers where the disastrous effects of mixing the profit motive and healthcare are already well documented.

For-profit healthcare is a failed model paid for not just in dollars but in life itself. NYSNA research expects outsourced dialysis services at HHC to result in significant cuts in patient care, doubled, and even tripled, nurse-to-patient ratios, and cuts in nurse hours per patient of up to 60 percent.

The recommendations on ambulatory care services also continue a disparate system of oversight, holding some providers to a more rigorous standard than others and allowing unfair competitive advantages to providers outside the hospital system. The CON process for Article 28 hospitals and hospital-operated services requires a needs analysis, an assessment of financial feasibility, and a review of operator character and competence. It establishes standards for staffing and facility structural requirements.

Less oversight, greater profit

Under the proposed recommendations that same logic and oversight would not apply to physician-owned, office-based surgery facilities, despite mixed research on the quality of care of these providers. This will allow such facilities to expand rampantly, further undermining the stability of community health networks and hospitals.

The insidious influence of profit-driven corporate medicine underlies all of these recommendations for relaxed regulatory oversight. But without strict controls, the incursion of ambulatory care threatens the healthcare of those most vulnerable and the very viability of safety-net hospitals.