Uncovering the truth on hospital mergers

The American healthcare system is out of control. An estimated 25 percent of Americans age 25-54 have unpaid medical bills hanging over their heads, resulting in mounting debt and damaged credit scores. In fact, the hospital industry now takes a bigger bite out of our finances than Uncle Sam does. To put this more into perspective, the average household paid more in hospital costs in 2018 than in federal taxes. This is a shocking trend that’s only set to continue with the gap between taxes and skyrocketing hospital bills growing each year.

Consolidation is ultimately the culprit behind the increasingly staggering cost of healthcare today. Over the past decade, hospital mergers and acquisitions have created monopolies in many parts of the country, reducing competition and driving up prices for privately insured and uninsured patients. Large hospital systems buy smaller hospitals, then raise prices for higher profit, leaving local residents without a choice but to pay the exorbitant fees.

While it’s widely accepted that competition is a key factor in lowering costs and improving the quality of services in a marketplace, American healthcare isn’t held to the same standard as other industries. One argument in favor of hospital consolidation has been that larger hospital systems can leverage “economies of scale” to offer better patient care for lower prices. However, studies have actually shown that a more competitive hospital industry has a positive impact on both patients’ health and quality of care.

One study of the British National Health System revealed that a government policy encouraging hospital competition reduced mortality rates and lengths of hospital stays. A study of Medicare found severely ill heart-attack patients “in competitive markets receive more intensive treatment than in uncompetitive markets, and have significantly better health outcomes.” Likewise, concentrations of physician specialty groups also have a negative effect on patient wellbeing.

In other words, not only do large hospital monopolies drive up prices, they do nothing to improve patient care – and, in fact, may actually be detrimental to healthcare outcomes. However, tell that to the politically influential hospital industry, which reportedly spent around $99.7 million in 2018 lobbying the government for favorable legislation.

What’s the solution? Some tout the benefits of single-payer or Medicare-for-All healthcare, while others caution against unacceptable outcomes for consumers under such a federally regulated system. However, still others are searching for a middle ground – a free-market system that spurs competition among hospitals while improving healthcare quality and value.

In an editorial Forbes’ Policy Editor and president of the Foundation for Research on Equal Opportunity Avik Roy describes a proposed bill featuring regulations that would “eliminate the ability of local hospital monopolies to charge exploitative prices, by precluding them from charging the privately insured and uninsured more than they charge Medicare.” A solution such as this would potentially avoid the drawbacks a top-down, federally run system while making access to quality healthcare more affordable.

We need a more competitive market to rein in the excessive pricing practices of large hospital systems and return value and quality of care to American healthcare. Until then, the average family will continue to struggle with the financial burden of rising hospital costs

Larry Hightower

Founder & CEO

An acknowledged industry innovator, Larry has spent his career improving clinical and economic outcomes through disruptive medical technologies and high value healthcare services. He founded Vxtra in 2005 to address the financial inequities, opaque practices, and technological challenges associated with the health benefits large, independent medical practices offered their employees. Leveraging his experience and relationships with entrepreneurial physicians nationwide, Larry continues to spearhead the search for financial and technology-based solutions designed to improve the delivery of healthcare benefits for our clients.

William E. Pritts, II

Chief Financial Officer

A results-driven leader, Bill is responsible for the oversight of Vxtra’s financial matters, as well as developing business forecasts to meet the company’s future operational needs. In addition to senior partnership positions with Ernst & Young during his career, Bill has a demonstrated success in corporate acquisition and development for both public and venture-backed private companies. He has served as both a Certified Public Accountant and a Certified Management Accountant.

Elizabeth Gordon

Vice President of Operations

With a background built on understanding physician/patient relationships, Elizabeth is responsible for managing the company’s operations team. In her role, she develops benefit plan design, funding rates, and renewal strategies. In addition she leads a team focused on delivering timely plan performance metrics and analytics. Versed in ACA and HR compliance, she is certified by the the National Association of Health Underwriters as a Self-Funding Professional.

Carmen Michea

Client Services Manager

An award-winning customer service specialist, Carmen is exceptional at developing and customizing service packages based on each client’s unique needs. In her role she assists clients with on general benefit questions, claims resolution, billing questions, and enrollment issues.

Emily Rathvon

Senior Healthcare Analyst

Emily is responsible for building and managing the distribution of our performance reports and supporting our big data analytics deliverables for our clients. Additionally, she  creates and maintains internal and external reports to assist senior management in decision-making, overseeing quality assurance, and data analytics.

Contessa Rollins

Client Services Specialist

With a background in organizational and multitask management, Contessa places a high priority on customer service and client relationships. She is focused on enrollments, billing and handling service issues for all clients.

Bret Hightower

Director of Business Development

A Vxtra team member since 2005, Bret is hands-on with optimizing partner relationships and focusing on captive membership growth. He is adept at educating clients on everything from the specific value of the self-funded captive platform and network considerations to plan design flexibility and levels of reinsurance appropriate for their profile. Past roles at Vxtra include servicing, marketing and renewing large medical practices in multiple states nationwide.

Mark Meade

Underwriting & Risk Management

A seasoned healthcare underwriter and risk manager with experience in large, self-funded health plans, Mark oversees the development of rates and projections in conjunction with Vxtra’s risk partners. With more than 30 years’ experience working with private and public sector plans, insurance carriers, and HMOs, Mark has developed financial and business models for both managed care and large provider organizations.

Robert Di Loreto, MD

Chief Medical Informatics Officer & Director

A board-certified adult and pediatric urologist, Dr. Di Loreto brings extensive experience as an influential physician leader and healthcare innovator. He served as a consultant and urology advisory panel member for the Food and Drug Administration’s Center for Devices and Radiological Health for more than 30 years.

Dr. Di Loreto was the co-founder and president of the Michigan Institute of Urology, the nation’s first large urology super group. He served as the medical director of Michigan Mobile Lithotripsy, was the co-founder and board member of Michigan Cryogenic Equipment Services and Michigan Mobile Urology Services. In addition, he served as the co-founder and medical director of Great Lakes Lithotripsy, and chief medical information officer for Integra Connect. He was the chief of urology and past president of medical staff at Saint John Hospital and Medical Center in Detroit where he was chairman of the board for the hospital and health system.

Lynn Evans

Account Manager

After a successful career in Human Resources in Property Management, Lynn returns to corporate America as our new Benefits Specialist/Account Manager. In her role she assists the internal client management team by providing account management support in order to meet client expectations. She enhances Vxtra’s relationships by executing proactive, creative and on-going contact initiatives. She is focused on building customer relationships by ensuring the client’s needs are met while providing exceptional customer service and loyalty.