The second letter arrived on a Tuesday, a single sheet of heavy bond paper, the hospital system’s logo embossed in a tasteful navy blue at the top.
It informed my patient, a 62-year-old retired mechanic I’ll call Mr. Jones, that his cardiologist’s office had been acquired.
His insurance plan, a Medicare Advantage product, had already sent a similar letter.
Together, they communicated that my patient’s doctors and insurance would work together as part of the same vertical system. They promised “a more integrated care experience.” As Mr. Jones and I studied the messages, the phrase hung in the air between us in the exam room, shimmering with vague, corporate benevolence.
A decade ago, about six in ten American physicians worked in a practice they owned. They were small business owners, their names on the door. By 2024, that number had fallen to just over four in ten; more than a third now work in practices owned by hospitals, and another 6.5 percent work for private equity firms.
The independent physician is becoming a historical artifact, and the speed of the transformation is remarkable — the share of doctors in hospital-owned practices rose from less than a quarter to more than a third in just over a decade.
In theory, this consolidation promises a more coordinated system, a world where a patient’s records flow seamlessly between primary care doctor, specialist, and hospital.
The independent physician is becoming a historical artifact.
In Mr. Jones’ case, his cardiologist’s office — a small, friendly practice he’d been going to for nearly a decade — became a sterile, rebranded clinic where he saw a different nurse practitioner at each visit. When he needed a follow-up echocardiogram, he was told he had to get it at the main hospital — a 45-minute drive away — instead of the local imaging center he’d always used.
Then came the denial.
His insurance plan rejected a PCSK9 inhibitor his cardiologist prescribed, a medication with strong evidence for reducing his specific type of cardiac risk. (The insurer that denied the claim was owned by the hospital that now employed his cardiologist.)
The denial letter, printed on the same heavy bond paper, suggested a cheaper, older alternative he’d already tried without success.
“It feels like they’re all the same company now,” Mr. Jones told me. “So who’s working for me?”
Health Integration Systems Help the System, but Not Health
In 2023, a team of researchers at Harvard examined over 2.6 million colonoscopies, comparing what gastroenterologists did before and after their practices were acquired by a hospital.
After becoming hospital employees, the physicians significantly reduced their use of deep sedation — the kind that requires a costly anesthesiologist. Reduced sedation saved the system money. It also generated more revenue per procedure, because hospital-based procedures are reimbursed at higher rates.
But there was a problem.
The reduction in sedation was associated with a significant increase in major complications: bleeding, cardiac events. The system saved money on anesthesiologists, billed more per procedure, and the patient bore the risk.
The system was optimizing for something; it just wasn’t health.
Many studies suggest that vertical integration of health systems – where hospital, physician practices, clinics, and insurers are put under one roof – make little difference in a core private equity concept: efficiency. While some quality measures improved after consolidation (such as improved administrative efficiency or care for specific health conditions), the integration was consistently associated with either no difference or lower efficiency — meaning higher costs and higher utilization. In other words, integration reduced costs per visit but people were slower to recover and sought care more often.
In fact, a study examining 4.6 million patient-years of data found that vertically integrated systems were remarkably effective at one thing: steering patients to the systems’ own specialists, increasing in-system oncology follow-up by over seven percentage points. The data showed no associated improvement in patient outcomes.
The system was optimizing for something; it just wasn’t health.
A landmark 2023 study in JAMA compared 51 hospitals acquired by private equity firms to 259 matched controls. After acquisition, patients experienced a 25 percent increase in health conditions they acquired in the hospital. Falls rose 27 percent. Central line-associated bloodstream infections — a type of infection that is widely considered preventable — rose 38 percent. The infections increased even as the private equity-owned hospitals appeared to be placing fewer central lines and treating a younger, healthier, more profitable mix of patients.
The problem wasn’t volume. It was something about what happened to the care itself after the money changed hands.
The Integrated Healthcare System Denies a Lot of Claims, but Not Equally
What connects all of this — the acquisitions, the steering, the complications — is a single mechanism, and it is the one Mr. Jones encountered in his exam room: prior authorization.
Prior authorization is the process by which an insurer must approve a test, procedure, or medication before it is covered. This touchpoint has become the central nervous system of the consolidated healthcare machine. In 2024, Medicare Advantage plans — many of them vertically integrated — reviewed nearly 53 million prior authorization cases. They denied over four million of them.
When 80.7 percent of the denials that patients manage to appeal are ultimately overturned, you begin to wonder whether the denials were ever really about medical necessity.
There is strong evidence that the practice of prior authorization was associated with measurable patient harm across multiple specialties: disease exacerbation, preventable hospitalizations, lower rates of disease-free survival.
For a patient with cancer, a two-week delay in starting chemotherapy is not an administrative inconvenience; it is a clinical event with prognostic consequences.
When an insurer denies a claim, the patient faces an impossible choice: forgo the prescribed care, or pay out of pocket. A 2025 study in Health Affairs found that lower-income and racial minority patients were the least likely to successfully appeal a denied claim, and that when they did, they saved less money than their wealthier, white counterparts.
When patients have to pay for drugs, studies reveal that they abandon the treatment. In fact, cost-sharing above $100 was associated with abandonment rates as high as 75 percent for specialty drugs — medications for cancer, multiple sclerosis, conditions where stopping treatment is not a neutral act.
In other words, the system is regressive by design. It does not deny care equally; it denies care to those least equipped to fight back. The patients who forgo care get sicker. The patients who pay accumulate debt. And the debt itself turns out to be toxic.
A 2024 study of nearly 3,000 counties in the United States found a dose-response relationship between the prevalence of medical debt and death. For every one percentage point increase in the population carrying medical debt, the all-cause mortality rate rose by 7.5 deaths per 100,000 people. The association held for cancer, heart disease, and suicide.
An accompanying editorial called it “an iatrogenic epidemic with mortal consequences.” Iatrogenic means these deaths were caused by the system of care itself.
Do We Need to Separate Care and Cost?
I sat with Mr. Jones the afternoon he told me his claim was denied, and we talked through the options. We would appeal the denial. We would try the older medication again, the one that hadn’t worked, and I would document its failure more thoroughly this time, because the form required it. We would fill out the paperwork for the drug company’s patient assistance program — a 14-page application designed, it seemed, by someone who had never met a 62-year-old retired mechanic. We would do all the things you do when you are trying to practice medicine inside a system that seems to be practicing something else entirely.
Iatrogenic means these deaths were caused by the system of care itself.
Mr. Jones left my office with a plan, but not, I think, with much hope.
A bipartisan bill in Congress, the Break Up Big Medicine Act, aims to increase scrutiny of healthcare mergers. But is blocking future mergers enough to unwind a decade of consolidation that has already reshaped the landscape? Or do we need something more fundamental — a separation of the entity that provides your care from the entity that decides whether to pay for it?
I don’t know. What I do know is that Mr. Jones’s question is still in the room with me, long after he left. It’s there when I open a chart and see a prior authorization pending. It’s there when I read studies about the iatrogenic epidemic. It’s there, I suspect, in exam rooms across the country, asked in different words by different patients who have received the same letter on the same heavy bond paper.
Who, in the end, is working for the patient?
I used to think the answer was physicians and hospital systems. I’m less sure now.
