Healthcare: A System That Rewards Compliance Not Patient Care
By Donna F. Paris
July 12, 2026
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Government regulation, third-party healthcare insurers, and large healthcare organizations have corrupted the practice of medicine, particularly internal medicine, in the United States and have all but severed the physician-patient relationship. Internal medicine (a.k.a. primary care) has been reduced to little more than a referral service. Gone are the days when a patient visited the doctor for an annual physical exam or when ill, received treatment or referral to a specialist if needed, and paid the physician’s fee. Payment by insurance companies was reserved for major medical issues if the patient carried such insurance.
Government regulation, third-party healthcare insurers, and large healthcare organizations have corrupted the practice of medicine.
The three forces listed above have reshaped the practice of medicine in ways that frustrate both patients and the physicians who went into the field to provide care but face structural pressures that make genuine clinical judgment harder to practice. Let’s look at these forces and note how each has contributed to the current state of healthcare.
Government Regulation
Regulation was meant to standardize quality and prevent fraud, but quality of care cannot be imposed by regulation nor can fraud be prevented by it—both outcomes result from the individual physician’s moral choice. Instead, regulation has produced the following results:
- Documentation requirements have ballooned
- Quality metrics are tied to reimbursement
- Physicians spend 1–2 hours on paperwork for every hour of patient care
- “Meaningful use” and compliance checklists have turned into data-entry sessions
The evidence of this is substantial. A study published in Annals of Internal Medicine found that for every hour physicians spent in direct patient care, they spent nearly two additional hours on electronic records and deskwork during the day, plus another one to two hours after hours. CMS’s Merit-based Incentive Payment System also ties Medicare payment adjustments to reported performance categories, including quality, improvement activities, promoting interoperability, and cost, reinforcing the connection between regulatory reporting and reimbursement.
Insurance Companies
Today, the most powerful force in the patient exam room is the third-party insurer: Medicare, Medicaid, and commercial insurance companies. Insurers dictate:
- What tests require prior authorization
- Which medications are “preferred”
- How long a visit can be
- What diagnoses justify reimbursement
Prior authorization delays access to necessary care for the vast majority of patients whose treatment requires it.
Recent data support this concern. The American Medical Association’s national physician survey found that prior authorization delays access to necessary care for the vast majority of patients whose treatment requires it; physicians also reported that these requirements can lead to treatment abandonment, adverse clinical outcomes, and many hours of administrative work each week. Medicare Advantage data show the same pattern: KFF (formerly Kaiser Family Foundation) reported that Medicare Advantage insurers made nearly 53 million prior authorization determinations in 2024, denied about 4.1 million requests, and overturned more than 80% of appealed denials.
Doctors know the right treatment but must fight a faceless system to get it approved. That’s where defensive medicine comes from—not only from fear of patient lawsuits, but fear of denials, audits, and penalties: i.e., from fear of incurring legal liability from all angles.
Large Healthcare Organizations
Formerly independent practices have been absorbed by:
- Hospital systems
- Private equity groups
- Large multispecialty corporations
This has changed incentives by imposing productivity quotas, shorter visit times, pressure to refer in‑network, and less autonomy in clinical decision-making.
This has changed incentives by imposing productivity quotas, shorter visit times, pressure to refer in‑network, and less autonomy in clinical decision-making.
Recent ownership data show how far this consolidation has gone. The American Medical Association reported that the share of physicians in private practice fell from 60.1% in 2012 to 42.2% in 2024, while the share working in hospital-owned practices rose from 23.4% to 34.5%. The AMA also reported that 6.5% of physicians were in private equity-owned practices in 2024, compared to 4.3% in 2021. A separate Physicians Advocacy Institute and Avalere Health report found that by 2026, 82.0% of physicians were employed by hospitals or other corporate entities and 63.9% of physician practices were owned by hospitals or other corporate entities, illustrating the scale of the shift away from physician-owned practices.
Doctors didn’t voluntarily choose this; many were forced into it by rising overhead, shrinking reimbursements, and the impossibility of running a small practice under modern administrative burdens.
Defensive, “Check-the-Box” Medicine
Physicians have been constrained, and pushed to practice defensive “check-the-box” medicine, and it’s usually because:
- Their job performance is measured by those boxes
- Their pay is tied to those boxes
- Their malpractice lawsuit risk is potentially reduced by those boxes
- Their employer requires those boxes
These incentives shape physicians’ behavior. A national survey in JAMA Internal Medicine found that many physicians believed doctors order more tests and procedures than patients need to protect themselves against malpractice suits, and a separate JAMA study of high-liability specialties found that 93% of surveyed physicians reported practicing defensive medicine, most commonly through “assurance” behaviors such as ordering additional tests, procedures, or referrals. At the same time, CMS value-based programs explicitly reward providers based on measured quality performance, and research in JAMA found that MIPS scores for primary care physicians were not consistently related to broader measures of clinical quality and patient outcomes, raising concerns that performance scores may not fully capture the quality of individualized care.
The system rewards compliance, and many physicians feel rushed, second-guessed by insurers, buried in documentation, and disconnected from the people they want to help.
It’s not that physicians have lost judgment—it’s that the system rewards compliance, and many physicians feel rushed, second-guessed by insurers, buried in documentation, and disconnected from the people they want to help.
Solutions?
The current state of healthcare described above has resulted in a system that is no longer patient-centered and distracts physicians from their core purpose. Moreover, that distraction sometimes leads to negative consequences for both patients and physicians. Various solutions have been offered to restore the system to a healthier state; solutions advanced include:
- Prior Authorization Reform
- Rebalancing Payment Toward Primary Care
- Reducing Administrative Burden
- Tackling Consolidation and Corporate Control
Unfortunately, these “solutions” focus on tweaking various aspects of the current system and fail to challenge the legitimacy of the system itself.
The current system places authority for healthcare decisions in the government, healthcare insurers and corporate employers, and effectively removes that authority from the only two parties entitled to possess it: the patient and the physician. Until healthcare decision-making authority is restored to them the solutions offered will not minimize negative clinical outcomes.
About the Author: Donna F. Paris
