Antitrust and the crushing of physicians' souls

Unless we prevent it, be prepared for mega-mergers worsening trends in physician burn-out

vol. 1 issue 24


The auto industry, big data, and healthcare are all making antitrust headlines lately, but I am mostly concerned with the Aetna/CVS news: a federal judge has now thoroughly blessed the merger, having found that it does not run afoul of the Tunney Act which is meant to guard consumer’s from harm.

Regular readers know it is the CVS deal which animates me most, given my astonishment over how the behemoth has already set about renovating our entire healthcare system with not a single presidential candidate seeming to take any interest in it whatsoever.

I believe POTUS hopefuls and antitrust watchers hoping to debate meaningful healthcare reform would do well to start paying closer attention to this vertical merger’s impact not just on the healthcare system over all, but physicians in particular.

Here’s what they should be looking for:

  • Will CVS seek to control the cost of expensive biologics by creating infusion centers and then refusing to cover costs of “out-of-network” centers such as headache clinics, specialty dermatology clinics, or multiple sclerosis clinics, etc.?

  • Will CVS “control the pen” of the physicians, by insisting that if they want to be in-network for Aetna, they prescribe only according to certain formularies, or face being rejected from the network?

  • Will there be a correlation between Aetna/CVS corporate initiatives and rising levels of burn out among physicians in their network?

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Why these three points:

More than 80% of our nation’s demand for prescription drugs is filled by generic forms of small molecule pharmaceuticals such as valsartan for high blood pressure or levothyroxine for hypothyroidism, as just two examples. That equation is changing, however, as biologics — drugs derived from living cells — increasingly come to market. Because these drugs bring relief from previously untreatable or at least intractable conditions such as migraine, rheumatoid arthritis, Crohn’s disease, to name a few, the drugs are increasingly in demand.

Biologics are often delivered by infusion, a slow intravenous drip given in a physician’s office so that patients can be monitored as they are treated, and also so that their physician can keep tabs on how patients are doing over all.

Even though less expensive biosimilars, the generic forms of patented biologics, are being developed, these living cell compounds are far costlier for CVS to buy and sell.

As I have already reported, CVS is open about its aims to lower the cost of treating chronic conditions in the US by transforming their retail locations into what are essentially medical homes for chronic care. One reason I think they are doing this is not just for the cool factor of being the innovators who reduce the cost of care nationally, but because it will reduce their overhead when selling generics. The drugs are not profitable to sell because even though they account for that 80% of pharmacy sales, mark-ups on them are virtually impossible by law.

Remember: if you reduce the cost of care in the system, healthcare over all equals one fifth of our gross domestic product (GDP). If CVS is now the largest player in that industry sector — and they are — do you think they want to see a reduction in overall healthcare costs nationally also mean a reduction in their profits?

In other words, someone will have to get squeezed if the margins are going to be in CVS’s favor.

Just like I have written on CVS having entered the dialysis field, presumably to keep down their costs, I do not see why infusion centers wouldn’t be next.

If CVS becomes the one in charge of infusion treatments what is lost?

For one thing, the physicians lose control of the patient-physician relationship because it will now be intermediated by whoever is ultimately in charge of the CVS corporate mission.

The same thing could be said of what might happen if Aetna/CVS “providers” are told they cannot stay in-network unless they prescribe certain drugs or drive patients to Minute Clinics or other CVS outpatient facilities over other options. This would erode a clinician’s judgement even further than it has been eroded in the past few decades.

And it is this that could lead physicians to even higher levels of burnout-related mental illnesses.

Doctors are overhead

I do not presume to speak for doctors, but over the course of the decades I have spent writing about clinical medicine, health policy, and health system administration, I have seen physicians increasingly struggle to stay excited about what once upon a time was seen as a higher calling.

Healthcare’s rise to become 20% of our GDP coincides with rising rates of burnout-related anxiety, depression, and suicide among physicians in all specialties. So much so that something once verbotten to mention is now a regular feature of panel discussions such as this one sponsored by my former colleagues at Frontline (now owned by Medscape).

Not understanding how mega-mergers like the one between Aetna and CVS have the potential to inflame this situation could mean the trend becomes worse.

Physicians are expensive labor. Labor is a cost and costs eat into profits.

There are controls built into the system to keep physician unemployment down, which is why we don’t see physician lay offs, but cutting the cost of labor has been achieved through standardization over the years, including the emergence of data-driven, evidence-based medicine. The application of industrial processes such as Six Sigma and Total Quality Management has, for many physicians, transformed patient relationships into transactions instead.

As performance plans and other labor control mechanisms have guided their behavior, they have lost much of their clinical autonomy, while being given far more responsibility.

Responsibility with no, or precious little, authority to act on that responsibility is a chief cause of burn out.

And in general, those drawn to medicine are people with a higher propensity to give a damn, meaning that they are also more likely to experience that dreadful feeling of helplessness when they know there is something they can do to improve a situation, but don’t have the authority to do so.

The corporate-physician/burn-out connection

What happens when you feel helpless? You feel hopeless. Without hope, you can’t connect to the future. Without a future, it’s hard to justify your efforts in the now. And when you can’t find any meaning in the now, what is the point?

That is when you burn out. That is why physicians are burning out.

I am speaking in broad strokes here, since I also know from experience writing at length about quality improvement in healthcare systems that there are plenty of hospital administrators who understand and are sympathetic to the clinician’s plight, but successfully balance it with the need to operate their hospitals as a going concern.

But, as private equity money is ever more present in healthcare systems and outpatient facilities and now CVS has so much control of the supply chain — and physicians are just one of the supplies — so, doesn’t it follow that downward pressure would be applied to physicians to help improve margins?

Physicians are already fatigued by the effort just to retain control of how they identify themselves in the so-called marketplace, as poignantly evidenced in this recent piece from the American College of Physicians president to his member colleagues, exhorting them to resist being called “providers” and “prescribers”, which is what insurers and pharmaceutical benefit managers like Aetna and CVS call them.

From the letter:

Such a fundamentally unique and sacrosanct relationship as that between patient and physician is not merely “providing” a health service. And that is why the term “health care provider” is so inappropriate. The patient-physician relationship does not consist of simple transactions where we provide and patients consume. That marketplace terminology implies that health care can be conceptualized as just another commodity.

But it cannot fully capture the role that we as physicians play, and I don't believe most patients want the relationship to be framed in that manner either. Marketplace terms must not be applied to the essence of what we do: Help people who are suffering, manage complex problems, counsel patients on how to live … and how to die.

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Aetna/CVS didn’t happen in a vacuum: there was also ExpressScripts/CIGNA. Meanwhile, amazon and Walmart are galvanizing for battle in the healthcare “space”.

JP Morgan/Berkshire Hathaway/amazon are also tooling with ways to revolutionize healthcare, but healthcare reform is nothing without a discussion of physician burn out. And addressing burn out is nothing without a discussion of what is driving it.

Watch this space, because I am watching this.