How insurers are driving up health care costs and hurting patient care

Each year, the Centers for Medicare & Medicaid Services (CMS) adjusts the rates it pays doctors for treating Medicare patients. For independent physicians, these reductions mean tighter budgets and tougher choices. In 2025, physician reimbursement is set to decrease yet again. But it’s not just CMS driving these changes—commercial insurers are following CMS’s lead, turning the ripple effect of these cuts into a wave that’s reshaping health care across the country. This constant downward pressure is more than just an inconvenience for doctors; it’s a growing problem for every patient, family, and community.

Physicians rely on CMS payments to contribute to their fixed costs, but they also depend on private insurance reimbursements to keep the practice running. CMS sets a “fee schedule” for each medical service, which dictates how much doctors are paid for Medicare patients. However, many private insurers follow this fee schedule too, effectively outsourcing their decision-making to CMS. So, when CMS cuts payments, insurers often slash their rates as well, paying doctors even less. This isn’t just a policy decision; it’s an industry-wide shift that leaves doctors scrambling to cover the cost of providing care to all patients, not just those with Medicare. Over time, this practice has squeezed independent practices to the breaking point, making it difficult—if not impossible—for small practices to survive, particularly in rural areas.

Running a medical practice isn’t just about treating patients; it’s also about managing overhead costs, staffing, equipment, and rent. Independent doctors, especially in small practices, are bearing the brunt of these reimbursement cuts. Unlike large hospital systems, independent practices don’t have the same bargaining power or financial resources to withstand declining reimbursements. As a result, many doctors are left with no choice but to sell their practices to hospital chains or, worse, directly to insurance companies. This isn’t just a loss for doctors—it’s a loss for patients too.

According to the American Medical Association, in recent years, the number of independently owned practices has dropped dramatically, with most doctors now working for corporate entities. When insurers and hospitals buy up these practices, it creates less choice for patients and ultimately leads to higher costs. Without small, independent practices, the health care landscape becomes increasingly dominated by a few big players who control prices and patient care decisions.

When insurers and hospital systems control more medical practices, they control more of the health care market. This consolidation reduces competition, giving these large corporations the power to dictate prices with little accountability. A National Library of Medicine report shows that when competition drops, prices often rise. For patients, this translates into higher medical bills, even though the quality of care doesn’t necessarily improve.

But there’s more. Doctors working under these large systems may be pressured to meet high productivity quotas, squeezing in as many patients as possible to generate revenue. This assembly-line approach to health care limits the time doctors can spend with each patient, resulting in rushed visits and, ultimately, lower quality care. For patients, this means less personalized treatment and less trust in the system that’s supposed to be looking out for their health.

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This cycle of reducing physician reimbursement is creating a health care system where doctors are increasingly corporate employees with less freedom to prioritize patient needs. And the effects are clear: Physician burnout is skyrocketing.

Research shows that doctors facing financial and corporate pressures are more likely to experience job dissatisfaction, exhaustion, and even make medical errors. In some cases, this pressure drives doctors out of the profession entirely, leaving communities—especially rural and underserved ones—with fewer health care providers.

For patients, this means less access to experienced, dedicated physicians who know their communities. It also means dealing with larger, faceless corporations when seeking health care. What was once a profession centered on relationships and personal care is now becoming a corporate assembly line. When insurers dictate care based on profit margins rather than patient health, the quality of our health care suffers.

The cycle is clear: When CMS cuts reimbursement rates, insurers follow, and the resulting loss of competition increases costs for everyone. Instead of repeatedly lowering reimbursements, policymakers should consider reforms that support independent practices. Strengthening reimbursement rates as is done with hospitals to match the inflation rate would help ensure that small practices can survive, maintaining choice and competition in health care markets. Protecting independent physicians isn’t just about helping doctors—it’s about ensuring that patients have access to affordable, quality care in a system that values their health above corporate profits.

By addressing these issues now, we can help build a health care system that puts patients first, supports independent practices, and ensures that doctors—not insurers—are in charge of patient care.