When Private Practices Merge with Hospital Systems, Costs Go Up
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A study found that when private practices merge with hospital systems, costs go up, sparking a heated discussion on the causes and consequences of this trend, including the role of billing systems, private equity, and the impact on patient care.
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Oct 3, 2025 at 6:58 PM EDT
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Go up too. https://hms.harvard.edu/news/deaths-rose-emergency-rooms-aft...
Part of the problem of modern society is that statistical murder of thousands is treated as less of a crime than a normal murder of one person.
We need really thoughtful incentives and simple policies that let doctors run hospitals. Idk it's hard - I was going to say we should reward them for providing better care but I know the pay for performance system in place also hasn't worked that well.
It’s even worse when considering these companies profit more by denying care altogether.
The doctors are trying to help people, the execs are being greedy while doing it. Leadership doesn’t get the benefit of the doubt at this point.
The study you linked concerns whether the hospital is owned by a nonprofit or by a private equity group.
The question in this study is whether physicians work for their own practice or for the hospital directly, regardless of the ownership of the hospital.
Sure there is.
Denying categories of potentially life-saving treatments due to provincial laws causing hospitals to value legal considerations over medical decisions is one example.
Perhaps the phrase "statistical manslaughter" is a better description however.
If you engage in behavior with known and predictable risks, which then kills somebody, it is manslaughter. Like recklessly operating a vehicle or blindly throwing knives.
That sometimes your behavior doesn’t kill people is immaterial — manslaughter is being intentionally risky in your actions which leads to a death.
Or in the case of UnitedHealthcare, felony murder: their felony fraud in issuing false denials for their clients resulted in deaths — and deaths that result from a felony have a special charge.
> That sometimes your behavior doesn’t kill people is immaterial — manslaughter is being intentionally risky in your actions which leads to a death.
I was thinking more about laws enacted in the last couple of years in various US states which have guaranteed a rise in pregnancy-related deaths[0].
0 - https://news.harvard.edu/gazette/story/2025/04/u-s-pregnancy...
Sadly, the insurers have a defense to this, and it has largely held up in court:
"We did not deny that person the healthcare that could save their life. We just declined to be the party to pay for it."
Plus I have no idea what the word "statistical" even means in this context...
Example. I live in a mountain town. Our ER takes hours. I can go to one of the multiple nearby doc in a boxes and get seen in 15 minutes. My town HAS the resources to see those people waiting in the ER. We just don't allocated the resources that way.
My town is a ski town. We have WAY more orthopedic surgeons than we need, but it's extra profitable for them here and living rich in a remote ski town is nice.
My tiny town has multiple beauty skincare facilities with licensed doctors on staff.
It's not a 'we don't have resources' it's a 'we don't prioritize these lives'.
Which is fine. But don't lie to us and say there aren't medical resources.
We had to invent new crimes “against humanity” to cover it.
> The drafters of [the Nuremberg Charter] were faced with the problem of how to charge the men at the Nuremberg Trial with committing the Holocaust and other state-sanctioned atrocities committed in Germany and German-allied states by the Nazi regime. As far as German law was concerned the men had committed no crime, but only followed orders. Not following orders however, in Nazi Germany, was a horribly punished crime. The problem in trying the individuals responsible for the German atrocities lay in the fact that, like in World War I, a traditional understanding of war crimes gave no provision for atrocities committed by a state on its own citizens or its allies. Therefore, to solve this problem and close the loophole, Article 6 of the Charter was drafted to include not only traditional war crimes and crimes against peace, but also crimes against humanity…
Also: stop comparing things to the Holocaust. Still more pretzel twists. All you have to do is not pursue this dumb rhetorical strategy of depicting policy you don't like as "murder".
1) denial of care resulting in death has already has case law for murder, it’s typically geared towards people with a legal responsibility like a grossly negligent parent and does typically get treated as manslaughter but there have been extreme cases where murder was charged. This is where I think an attorney could sway a jury that insurers have a legal obligation to their insured. And particularly where the insurer is objecting to a medical practitioners recommendation/diagnosis/etc.
2) premeditation can be determined because the auto-deny decision has been made and programmed into their business systems.
There are jurisdictions where that’s basically all you need
And some of those decisions are, shall we say, justifiable homicide.
Intent and motive makes murder. “I will let these people die so I can be richer” is different than a bureaucrat who gets paid the same either way.
In the modern world people can choose obvious evil choices because it makes them money, but because the damage is spread across the entire world and only slightly makes peoples lives worse it is ignored. Our laws are setup for a world like this. But there needs to be then same sort of legal incentives to keep people in line at this scale. Where if your choice results in one million human years wasted/made worse, society sure a shit is going to punish you hard because it benefits society to not waste one million human years.
Your example of statistical murder is prioritization can be abstracted as profit over life. A first thought might be to condemn any prioritization of anything over life, but this leads to likely unwanted consequences: it is illegal to drive, ever; it is illegal to feed someone food that is not of the optimal health for their particular situation, ever; it is illegal to sell a product, even used, that California has determined a carcinogen. All of these are related to leading causes of death: traffic accidents, low quality food causing obesity and its myriad of consequences, and cancer. We could use improvement in all of these cases, but such absolute bans go too far.
So, how do we determine when it is legitimate to prioritize something over life, or when it's statistical murder?
So, how do we determine when it is legitimate to prioritize something over life, or when it's statistical murder?
If giving another kid their cancer meds means one less gold-leaf-covered item in the presidential ballroom, so be it.
I agree. I want to expand on this and make my question more explicit. In my previous post I tried to give one extreme (where we clearly do not want restrictions on behavior). This is the other extreme (where we clearly do want restrictions on behavior). There must be some line drawn in between in order to enforce either of these extremes (that we clearly want to enforce).
> If giving another kid their cancer meds means one less gold-leaf-covered item in the presidential ballroom, so be it.
Why do you think a government would choose to cover an additional kid’s cancer medications rather than an additional luxury for government workers? You’re placing a ton of faith in governments.
At least with private companies there is choice (normally). And private companies do not directly wield government power (normally).
If a private hospital figures out that by jacking prices up by 50% they make more profit, keep their fewer customers happier (not even necessarily more alive!) and treat less people, they are 100% following their mission as a private business.
A European PoV might be that you can counterbalance a private system with a public system, whose goals are explicitly to keep the society healthy and help as many people as possible. The NHS, admittedly not the gold standard for anything good recently, optimises for maximising "quality-adjusted life expectancy improvement" over the whole society.
It's not a metric you could ever replicate with private businesses.
[citation needed]
This idea gets bandied about, but it is only one way of thinking that happened to gain popularity in a certain (recent) time period:
* https://en.wikipedia.org/wiki/Friedman_doctrine
* https://en.wikipedia.org/wiki/Shareholder_primacy
There are others:
* https://en.wikipedia.org/wiki/Stakeholder_theory
There is no legal duty/requirement to do so:
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2277141
* https://rpc.cfainstitute.org/research/multimedia/2013/the-sh...
* https://skeptics.stackexchange.com/questions/8146/are-u-s-co...
Also: shareholders are not the owners of company.
In what way are shareholders not business owners? They control, via boards, what the company does, and have exclusive access to the profits. These can even be clawed back, in certain situations, if the company then goes bankrupt - i.e. shareholders aren't just paid spectators, they bear responsibility for the business.
So how are they not owners?
Nope. First of companies have no duties, as they are not sentient, and thus have no free will to follow order or not.
While the directors of the company often/generally follow shareholder direction, they are not legally bound to: the directors have a contract with the company and so they must do what they think is best for the company.
But if you think it is for "shareholders", then "which" shareholder? The pension fund that wants steady dividend payments for 3 decades? The hedge fund that wants a meteoric rise in share prices in 3 years? The day trader that's trying to cash in on a meme in 3 days? There is no (single) Platonic "shareholder" that a company's directors can aim to be best at: there are a variety of people holding stock. Do a search for "shareholder heterogeneity".
> These can even be clawed back, in certain situations, if the company then goes bankrupt - i.e. shareholders aren't just paid spectators, they bear responsibility for the business.
Using UK law and precedent (just because it was easiest to find quickly):
> Unlike the agency theory, corporate law does not grant shareholders the right to necessarily impose their will on the company. The case of Gramophone & Typewriter Ltd v Stanley [1908] stated that “even a resolution of a numerical majority at a general meeting of the company cannot impose its will upon the directors when the articles have confided to them the control of the company affairs. The directors are not servants to obey directions given by the shareholders as individual; they are not agents appointed by and bound to serve the shareholders as their principals”.
> Shareholders possess a piece of paper entitling them to receive future income, but do not have the right to use any of the assets held by the corporation for their personal use. Companies are legal persons and in that capacity, they can own assets and use them in accordance with the directions given by directors. If any shareholder were to attempt to possess the asset and use it for personal enjoyment, s/he will probably be accused of theft.
[…]
> Shareholders cannot use the assets of a company to satisfy their own debts. In common with other consumers, shareholders can use a company’s assets and services by paying a price, but they generally do not have any special privileges arising from their investment in shares of the company.
* https://www.pqmagazine.com/the-myth-of-shareholder-ownership...
If I own shares in AAPL, I cannot walk into the UFO HQ and start grabbing stuff because I do not own it: I'd be arrested for theft. Further, Tim Cook has a bunch of actual stock in AAPL, but if he tried transfer a bunch of money from AAPL's chequing account to his own account it would be theft/embezzlement: because as a shareholder he does not own it.
It is the corporation itself that has ownership of its own assets. And who owns the corporation? Well just like a natural person [1] ("human"), a legal person [2] ("business") owns itself.
[1] https://en.wikipedia.org/wiki/Natural_person
[2] https://en.wikipedia.org/wiki/Legal_person
Now a natural person can delegate the running of their assets (real estate, portfolio, etc) to other people (grounds keeper, CFP/CFA/CIPM), so can a legal person (President, CFO, etc). But the people hired have a responsibility to the person in question.
Shareholder do not even have the right to demand income/dividends: the directors hired by the corporation have to decide what to do with whatever assets are left over all liabilities are handled, with an eye towards what is best for the corporation.
Or Canadian law:
> In contrast to what you may have previously understood, ownership of a corporation’s share does not represent ownership of the corporation itself. Rather, it represents ownership of certain rights to the corporation, which are granted in consideration for an equity investment or past services. The three basic shareholder rights are: the right to vote, the right to receive dividends, and the right to the corporation’s remaining assets upon dissolution or winding-up.
* https://queenslawclinics.ca/node/81
> There is a basic tension inherent in the regulation of corporations between the role to be played by boards and that to be played by shareholders. Boards have the statutory responsibility to manage the business and affairs of the corporation, and owe an express duty to act in the best interests of the corporation. Shareholders, however, are the ultimate ‘owners’ of the corporation, and have the ability to elect and remove directors. […] For a number of reasons the Canadian regulatory regime has developed a shareholder-centric model, which tends to foster an emphasis on process and shareholder rights, and stands in sharp contrast to the American regime and its nuanced approach to director duties.
* https://digitalcommons.osgoode.yorku.ca/cgi/viewcontent.cgi?...
Not the quotation marks around the word owners. Also:
> Critically, both in British law and theory shareholders are not ‘owners’ of the company they have shares in, and lack many of the rights and powers typically derived from ownership. In 1948, the Court of Appeal ruled that “shareholders are not, in the eyes of the law, part owners of the company”. The House of Lords strongly reaffirmed that ruling in 2003, a judgement the EU’s recent Shareholder Directive echoed. Ownership of capital – in this case, owning shares – is therefore legally and theoretically not the same as ownership of the company.
* https://www.ippr.org/articles/who-owns-a-company
> Corporate reality, though, has proved stubbornly uncooperative. In legal terms, shareholders don’t own the corporation (they own securities that give them a less-than-well-defined claim on its earnings). In law and practice, they don’t have final say over most big corporate decisions (boards of directors do). And although many top managers pledge fealty to shareholders, their actions and their pay packages often bespeak other loyalties.
* https://hbr.org/2012/07/what-good-are-shareholders
* (2) Although they do not own corporations, which are separate legal entities beyond their full control, shareholders play a relevant role in the governance of those corporations. The financial crisis has revealed that shareholders in many cases supported managers' excessive short-term risk taking. Moreover, the current level of “monitoring” and engagement in investee companies by institutional investors and asset managers is often inadequate and too much focused on short-term returns, which leads to suboptimal corporate governance and performance of listed companies.*
* https://www.europarl.europa.eu/doceo/document/TA-8-2015-0257...
* https://blogs.law.ox.ac.uk/business-law-blog/blog/2016/11/mo...
(The post is long because I want a single place for all the references I've managed to find on the subject given how often this idea comes up and has to be debunked.)
What is the law if not a bunch of technicalities.
(It is probably reasonable to talk about shareholder-owners proverbially and as a 'mental shortcut', but it should not be confused for actual reality—especially by those who should know better, like corporate officers.)
> Burwell v. Hobby Lobby Stores, Inc. - https://www.law.cornell.edu/supremecourt/text/13-354
> While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives. Many examples come readily to mind. So long as its owners agree, a for-profit corporation may take costly pollution-control and energy-conservation measures that go beyond what the law requires. A for-profit corporation that operates facilities in other countries may exceed the requirements of local law regarding working conditions and benefits.
Society is actually quite consistent on that point (unfortunately). The body doing the statistical murder here is the regulator of the hospital system and it is part of the same organisation (the government) that handles the direct murder through the army. People tend to treat horrible missteps in war and medicine about the same.
It might be nice in a moral sense if there was some consistency. It isn't too late to disgrace George Bush and make the rest of his days a living hell, for example. But as political strategies go that seems like a bad idea.
If the US had a simpler billing/insurance system (or these extractive middlemen were removed entirely), this wouldn't be happening to the same extent.
Yes, obviously yes. If someone can’t pay for food, we clearly have enough to go around.
There's agricultural subsidies that help farmers to nominally ensure that the US doesn't need to import foodstuffs. That practically guarantees that food is available, but it isn't "single payer" in terms of obtaining that food.
That "single payer" for obtaining food is food stamps. You have to be poor, to very poor, to qualify. But you get stamps, you bring to your grocery store, and you get free essentials, paying with food stamps. The market then redeems the food stamps to the government to get paid. And, guess who prices these essential products? Well let's just say that the government is generally rather stingy about it, but markets that sell these essential items are practically required to accept food stamps, even if only to keep products moving so they don't rot on the shelves.
When I was on food stamps there was a long tail where I qualified for a few dollars worth. Always seemed odd.
My understating is the dynamic have changed over time. But for much of its history it was as much about “what are farmers having trouble selling” as it was about “who needs food.”
The world as a whole is poor.
My country will pay for your food if you can't afford any, yep. I'm glad to pay taxes to cover it, because extreme poverty isn't great for a society.
Remember kids, social security keeps society secure against poor people with nothing left to lose!
Buying food for your family is a quintessential market transaction that works great with the government at arm's length. Healthcare.. less so. I'd rather deal with the DMV than a private insurer.
Let’s get back to the original point, which is that the motive for profit in healthcare is at odds with the stated goal that everyone should have healthcare by right. Trying to make it about something else is a distraction.
The US has reached an almost comical level of insanity and blatant inefficiencies but somehow there is no political will to address anything. Even the current fight over the ACA subsidies is basically about throwing even more money into the fire without addressing any structural issues.
If you’re interested in solving this, check out Camber. They’re building what is essentially Stripe for small clinics.
Higher collections rate + faster time to money = clinics can focus on providing care. Very cool problem!
I think that is hands down, the worst website i've visited in my life. No hyperbole.
I’ve found that to not be universally true. I say that as someone with eight different health systems in MyChart and who has been treated by two additional hospitals who don’t use MyChart in the past year.
Some systems are very competent about sharing across borders and good at it. I’m lucky my primary hospital is one of those. Others are god awful at it and take multiple calls to get them to even fax records.
But that's all predicated on the provider's EHR being able to talk to it, or at least talk to an interface engine that can be configured to talk to it. And money. It costs money.
"Standards are anything but". I used to work for a company that wrote healthcare software, from EHRs to claims benefit management.
And our software was riddled with little transformers, because vendor A's implementation of HL7 behaved differently to vendor B's, and C's.
The Air-Ambulance Vultures (2022) https://archive.ph/2TYGj
Air ambulances, backed by private equity firms, leave patients with $45,000 bills (2018) https://www.latimes.com/business/la-fi-air-ambulance-cost-20...
Airlift NW has a $60/year membership for families that will bill your insurance, and consider what they get from insurance as payment-in-full (https://www.uwmedicine.org/airliftnw/membership). Many also have reciprocal programs in other areas.
It's always astounding that no-one in the US mentions the elephant pooping in the living room - that the US spends more tax dollars than Australia and IIRC the UK, and Canada.
Per capita, or as a % of anything reasonable. The US is such bad value that Medicare and Medicaidel, VA, as well as othe government programs cost IIRC more than Canada's system. And Canada has a huge area with poor economies of scale.
Republicans don't want to admit that they're taxing as hard as the French (for healthcare), Democrats don't want to lose the gold plated Medicare system that old people vote for, and literally everyone from nurses to band aid makers to doctors to healthcare CEOs makes more than in other countries.
Maybe I have missed something, but universal single payer healthcare (especially with a hybrid system like Ausralia) seems cheaper than what the US does.
Conservatives in the US see the world as a power hierarchy and their most important job is to uphold it, like they are princes next in line to be King. See how hard they fight China and cut social services to funnel money up to billionaires. They will literally die for it.
Seen in that light, the increased prices are a universal winner for us: profits go up -> inflation goes up -> GDP goes up. Wages do not go up, and so as a whole we’ve surpassed 25% of all households unable to afford a one-bedroom home. Economists are taught to only model inflation in terms of price level: inflation = profit increases + wage increases, with no way to model their separate impacts. So our policies are economically sound, as long as one disregards the growing poverty.
Despair is, as Demotivators reminds us, highly profitable :-(™
Imagine if every restaurant went to being owned by McDonald’s, and the reason we’re told for it is “credit card payment systems are so complicated!”
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