[leekyle]

Medicare is obviously a big part of healthcare, but is this same pay for performance happening with private insurance? How has the consolidation of hospitals impacted this? Has it become harder to negotiate these deals with massive hosptital networks?

[mikeyouse]

Private insurance actually started a lot of these initiatives. If you're a physician with a busy practice, at the end of the month, you'll get a check from all of the big insurance companies detailing how much they're paying you.

It doesn't read, "You saw 100 patients at $100/patient, here's $10,000."

It's more like, "You saw 100 patients, here's your per-patient fee of $50. You prescribed 87% generic medicines, which for a doctor with your patient population in your area underperforms by 2 percentage points, this equates to a $1,400 bonus -- if you prescribed 91% generics, this bonus would be $2,500. Only one of your patients required an off-formulary medcine, your bonus here is $500."

There are a lot of competing interests right now, the formerly independent doctor groups are all merging together, insurance companies are merging, hospitals are merging. There's also a big push for risk-based reimbursement:

http://www.mckesson.com/bps/blog/riding-the-shifting-landsca...

[azernik]

I can second the testimony about lots of upheaval and consolidation in the industry. A family member recently worked at a Big Law firm on antitrust cases, and a large portion of them had to do when recent M&A activity among hospitals, specialty clinics, and small practices. The days of the doctor as small-business proprietor are waning.

[leekyle]

One interesting aspect with the consolidation of hospitals is that they are generally buying smaller hospitals, it isn't some massive merger which gives them immunity from anti-trust cases.