Healthcare costs are weighing heavily on Americans’ minds. A new Pew Research Center survey found that 73% of Americans consider the affordability of healthcare a “very big problem” for the country.
Congress has noticed. In recent months, lawmakers have held a series of healthcare affordability hearings examining why healthcare costs are rising — and what Washington can do about it. One of the most effective ways to address those concerns is by fixing Medicare’s broken physician payment system.
The Medicare Physician Fee Schedule is one of the most important forces shaping our healthcare system. It influences what care costs, where patients receive it, and whether independent physicians can keep serving their communities.
RECLAIMING AFFORDABILITY: WANT AFFORDABLE HEALTHCARE? PUT CONSUMERS IN CONTROL
Since 2001, Medicare physician reimbursement has fallen 33%, after accounting for inflation. Meanwhile, the costs of staffing, rent, technology, insurance, and medical supplies have climbed steadily.
No business can absorb rising costs indefinitely while its largest payer reduces payment in real terms. Yet that is precisely what Medicare has asked independent physicians to do for more than two decades.
Some independent practices have responded by closing their doors. Others have switched to subscription or concierge models that may be out of reach for patients with conventional insurance.
Many more have sold to hospitals or health systems. Between 2018 and 2026, hospitals acquired nearly 33,000 physician practices and added more than 181,000 physicians to their payrolls. Today, nearly six in ten physicians are employed by hospitals or health systems.
That trend should concern anyone worried about healthcare affordability.
Hospital consolidation of local healthcare markets drives costs higher in two distinct ways. The first is straightforward: Fewer independent competitors mean hospitals face less pressure to keep prices in check.
The second is less obvious. Hospital-affiliated physicians tend to perform more tests and procedures in hospital outpatient departments than independent physicians do. And care provided in the hospital setting is much more expensive than care provided in a medical office or ambulatory surgery center for the exact same test or procedure.
As a result, consolidation doesn’t just reduce competition — it steers more care into the most expensive settings.
Consider a common echocardiogram. In 2024, Medicare paid $593 for the procedure when provided in a hospital outpatient department. It paid $196, 67% less, when provided in a medical office.
Same equipment. Same test. Frequently interpreted by the same physician. But Medicare pays the hospital-owned facility three times as much. The beneficiary’s standard co-insurance bill is three times higher, too.
If policymakers are serious about making healthcare more affordable, they must make independent medicine financially sustainable.
Congress can start by fixing the payment system pushing independent physicians toward hospital ownership.
The first step is passing the Provider Reimbursement Stability Act, H.R. 8163. This bipartisan bill would make yearly changes in Medicare payments more predictable.
Independent physicians need confidence that they can hire staff, invest in technology, and continue serving Medicare patients without facing sudden reimbursement shocks from year to year. For some practices, that stability can be the difference between remaining independent and selling to a hospital or health system.
But lawmakers should not stop there.
Congress should also advance the bipartisan Strengthening Medicare for Patients and Providers Act, H.R. 6160. The legislation would finally tie Medicare physician reimbursement to inflation, ensuring payments keep pace with the rising costs of providing care.
Physicians are the only major category of Medicare providers that lack a permanent inflation-based payment update. They shouldn’t be left out any longer.
Taken together, these reforms would help preserve independent medical practices, strengthen competition in healthcare markets, and improve patient access to community-based care.
CORPORATE HOSPITALS ARE DRIVING UP HEALTHCARE COSTS FOR THE REST OF US
Every year Congress fails to act, more independent practices disappear. More physicians are pushed into hospital systems. More patients face fewer choices in where they can seek care. And more people have to shoulder higher costs.
Americans have made clear that healthcare affordability is a national priority. Congress should respond by ensuring independent physicians can keep competing with hospitals, serving their communities, and providing care in a more affordable setting.
Dr. Rick Snyder is an interventional cardiologist practicing in Dallas and vice president of the American Independent Medical Practice Association (aimpa.us).