GE Healthcare Camden Group Insights Blog

Study: Medical Costs up to 20% Higher with Hospital-Owned Physician Groups

Posted by Matthew Smith on Nov 7, 2014 3:14:00 PM

New Study, PhysiciansRaising fresh questions about healthcare consolidation, a new study shows hospital ownership of physician groups in California led to 10% to 20% higher costs overall.

The UC Berkeley research, published in the October Journal of the American Medical Association., illustrates the financial risks for employers, consumers and taxpayers as hospital systems nationwide acquire more physician practices.

“I think this consolidation wave is virtually unstoppable,”said James Robinson, the study’s lead author and a UC Berkeley professor of health economics. “Left to itself, it will increase the cost of healthcare.”

Total spending per patient was 10.3% higher for hospital-owned physician offices compared with doctor-owned organizations, according to the study.

Costs were even higher when large health systems running multiple hospitals owned medical groups. Their per-patient spending was 19.8% higher compared with independent physician groups.

The JAMA study examined total medical spending for about 4.5 million HMO patients in California from 2009 to 2012. The data didn’t include patients with commercial PPO coverage, Medicare or Medicaid.

These figures reflect the total cost of care, including hospitalizations, prescription drugs and physician visits. The data were obtained from the Integrated Healthcare Association., which includes insurers and medical providers.

Researchers adjusted for differences in patients’ health and variation in costs by region.

These mergers between hospitals and physician groups are often touted as a way to better coordinate care, eliminate unnecessary tests and treatments and ultimately reduce costs.

Provisions of the Affordable Care Act encourage healthcare providers to collaborate more and shift away from conventional fee-for-service medicine.

Read the full article from the Los Angeles Times: Study: Medical costs up to 20% higher with hospital-owned physician groups


Topics: employed physician practices, JAMA, Employed Medical Practice, Employed Physician Groups, Hospital-Owned Physician Groups

JAMA: Coordinated Care Leads to 6% Decrease in Hospitalization Rate

Posted by Matthew Smith on Jan 28, 2013 10:16:00 PM

Clinical IntegrationAccording to a study recently published in the Journal of the American Medical Association, coordinated care, seen in new care models like accountable care organizations, caused a 6 percent decrease in the number of hospitalizations and re-hospitalizations among Medicare beneficiaries. Approximately 20 percent of this patient population is readmitted to a hospital within 30 days of discharge as a result of care transitions.

Coordinated care relies heavily on the use of health information technology, such as electronic health record and clinical archiving systems, as tools to share patient information among providers. This process can be facilitated through health information exchanges, which connect multiple community or statewide medical centers. Setting up these networks is a large component of stage 2 of meaningful use, as it helps promote quality care delivery for Americans.

The investigators conducted this study as a project to see the impact that coordinated care has on healthcare, especially since without it, Medicare beneficiaries have a tendency to experience errors when transitioning among different medical facilities, which can cause them to be re-admitted to a hospital. They evaluated different communities to see how the new care model impacted them before and after the transition.

The researchers discovered that those communities that transitioned to coordinated care experienced a decline in 30-day hospitalization and all-cause hospitalization.

"This has far reaching implications for the future of healthcare at any level," said lead author Jane Brock, M.D., chief medical officer, quoted by Healthcare IT News. "When a community works together to improve care at the system level, everyone involved will see the positive effects."

In addition, the National Institutes of Health conducted a study in which they found that coordinated care is especially beneficial for patients who have multiple chronic conditions, and lowers their use of emergency departments. 

Topics: Clinical Integration, JAMA, Study, Coordinated Care

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