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In 2003, approximately 29% of hospitals had at least some employed physicians, a number that rose to 42% by 2012. In the past 15 years, hospitals have pursued tighter integrative relationships with physicians, including direct employment of doctors. Given that higher spending raises the price of health insurance, policy makers should carefully consider policies that limit consolidation of hospitals and physicians. We find that financial integration between physicians and hospitals raises patient spending, but not care quality.
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There was no consistent difference in care quality for hospital-owned versus physician-owned practices. The spending difference appears attributable to greater service utilization rather than higher prices. Spending is significantly higher for durable medical equipment, imaging, unclassified services, and outpatient care. ResultsĮstimates suggest that patients in a preferred provider organization incur spending which is 5.8 percentage points higher when treated by doctors in hospital-owned versus physician-owned practices (95% CI 1.7 to 9.9 p = 0.006). Quality measures included readmission within 30 days of discharge for hospitalized patients, appropriate care for diabetic patients, and screening mammography for women ages 50–64. Main Outcomes and MeasuresĪnnual spending per patient was compared for patients treated by a physician practice that is billing through a hospital, versus billing through an independent physician practice spending was also subdivided by BETOS category, by site and type of care, and percent of patients with positive spending by subcategory. Patients aged 19 to 64 enrolled in a Blue Cross Blue Shield Texas Preferred Provider Organization in the four largest metropolitan areas in Texas who could be attributed to a physician practice based on claims. Adjustments were made for patient, physician, and regional characteristics.
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Retrospective review of claims data from 2014 through 2016. To measure the association between physician-hospital integration and both spending and quality using patient-level data and explicit physician-hospital contracting information. Past studies had incomplete measures of physician-hospital integration, or lacked patient-level data. Recent studies that compared patient spending in hospital-owned physician practices versus physician-owned groups did not compare quality of care.