Changes in Hospital–Physician Affiliations in U.S. Hospitals and Their Effect on Quality of Care

Scott, Kirstin W.; Orav, E. John; Cutler, David M.; Jha, Ashish K.

doi:10.7326/m16-0125

Cited by 77 publications

(100 citation statements)

References 23 publications

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“…This form of consolidation has increased prices and spending without ostensibly improving quality. 17,25–28 Building on previous evidence, 29,30 our study more generally underscores the importance of differences in profitability between hospital-owned and independent outpatient settings in encouraging hospital–physician consolidation. Thus, our findings support broader proposals to make payments and discounts for care delivery setting-neutral.…”

Section: Discussionsupporting

confidence: 66%

Consequences of the 340B Drug Pricing Program

Desai

McWilliams

2018

N Engl J Med

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BACKGROUND The 340B Drug Pricing Program entitles qualifying hospitals to discounts on outpatient drugs, increasing the profitability of drug administration. By tying the program eligibility of hospitals to their Disproportionate Share Hospital (DSH) adjustment percentage, which reflects the proportion of hospitalized patients who are low-income, the program is intended to expand resources for underserved populations but provides no direct incentives for hospitals to use financial gains to enhance care for low-income patients. METHODS We used Medicare claims and a regression-discontinuity design, taking advantage of the threshold for program eligibility among general acute care hospitals (DSH percentage, >11.75%), to isolate the effects of the program on hospital–physician consolidation (i.e., acquisition of physician practices or employment of physicians by hospitals) and on the outpatient administration of parenteral drugs by hospitalowned facilities in three specialties in which parenteral drugs are frequently used. For low-income patients, we also assessed the effects of the program on the provision of care by hospitals and on mortality. RESULTS Hospital eligibility for the 340B Program was associated with 2.3 more hematologist–oncologists practicing in facilities owned by the hospital, or 230% more hematologist–oncologists than expected in the absence of the program (P = 0.02), and with 0.9 (or 900%) more ophthalmologists per hospital (P = 0.08) and 0.1 (or 33%) more rheumatologists per hospital (P = 0.84). Program eligibility was associated with significantly higher numbers of parenteral drug claims billed by hospitals for Medicare patients in hematology–oncology (90% higher, P = 0.001) and ophthalmology (177% higher, P = 0.03) but not rheumatology (77% higher, P = 0.12). Program eligibility was associated with lower proportions of low-income patients in hematology–oncology and ophthalmology and with no significant differences in hospital provision of safety-net or inpatient care for low-income groups or in mortality among low-income residents of the hospitals’ local service areas. CONCLUSIONS The 340B Program has been associated with hospital–physician consolidation in hematology–oncology and with more hospital-based administration of parenteral drugs in hematology–oncology and ophthalmology. Financial gains for hospitals have not been associated with clear evidence of expanded care or lower mortality among low-income patients. (Funded by the Agency for Healthcare Research and Quality and others.)

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Section: Discussionsupporting

confidence: 66%

Consequences of the 340B Drug Pricing Program

Desai

McWilliams

2018

N Engl J Med

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“…In other words, employed physicians will be more tightly integrated with the hospitals, making incentivizing them simpler, allowing the use of common information systems, and complying with clinical guidelines (Scott et al, 2017). All six physicians agreed or strongly agreed with the statement, "Direct employed physicians are better able to coordinate patient care with other hospital employees and departments than contract physicians."…”

Section: Conceptual Frameworkmentioning

confidence: 98%

“…In contrast, there may also be negative repercussions due to physicians having less autonomy and being less able to provide customized care, leading to a reduction in patient care effectiveness (Bishop, Shortell, Ramsay, Copeland, & Casalino, 2016). Some have reported no effect of integration on patient outcomes such as mortality, length of stay, and readmissions (e.g., Scott et al, 2017), while others have shown improvements in process quality measures as a result of higher integration (Bishop et al, 2016). Some have reported no effect of integration on patient outcomes such as mortality, length of stay, and readmissions (e.g., Scott et al, 2017), while others have shown improvements in process quality measures as a result of higher integration (Bishop et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

Patient care effectiveness and financial outcomes of hospital physician contracting emphasis

Mishra

Salzarulo

Modi

2019

J of Ops Management

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This study investigates the influence of hospitals' physician contracting emphasis on patient care effectiveness and financial outcomes. It utilizes secondary data for a comprehensive set of hospitals in the United States over a 21‐year period (1996–2016). Analysis confirms that hospitals with a greater emphasis on physician contracting have higher operating margins but also tend to have longer patient length of stay—indicating lower patient care effectiveness. Lower patient care effectiveness, in turn, is observed to attenuate some of the financial gains from physician contracting. Further, post hoc analysis with other measures of patient care, including experiential quality, conformance quality, readmissions, and mortality provide additional insights into the effect of physician contracting on patient care. Theory and results also highlight teaching intensity and capacity utilization of hospitals as key boundary conditions in these relationships, revealing a complex set of findings related to these variables. Together, the findings yield practical insights for hospital managers regarding their operations strategy.

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“…Health care delivery systems are a growing presence in the U.S. [12345] and are part of a national shift from small, independent practices to larger, consolidated organizations [6789]. Yet, evidence of the benefits of organized health care delivery systems on value is limited, with some studies suggesting systems may be associated with increased costs and little or no improvements in quality [1451011].…”

Section: Introductionmentioning

confidence: 99%

“…Yet, evidence of the benefits of organized health care delivery systems on value is limited, with some studies suggesting systems may be associated with increased costs and little or no improvements in quality [1451011]. Economic and policy factors have incentivized growth of diverse organizational structures across the spectrum of care delivery.…”

Section: Introductionmentioning

confidence: 99%

Leveraging Diverse Data Sources to Identify and Describe U.S. Health Care Delivery Systems

Cohen¹,

Jones²,

Heeringa³

et al. 2017

eGEMs

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Health care delivery systems are a growing presence in the U.S., yet research is hindered by the lack of universally agreed-upon criteria to denote formal systems. A clearer understanding of how to leverage real-world data sources to empirically identify systems is a necessary first step to such policy-relevant research. We draw from our experience in the Agency for Healthcare Research and Quality’s Comparative Health System Performance (CHSP) initiative to assess available data sources to identify and describe systems, including system members (for example, hospitals and physicians) and relationships among the members (for example, hospital ownership of physician groups). We highlight five national data sources that either explicitly track system membership or detail system relationships: (1) American Hospital Association annual survey of hospitals; (2) Healthcare Relational Services Databases; (3) SK&A Healthcare Databases; (4) Provider Enrollment, Chain, and Ownership System; and (5) Internal Revenue Service 990 forms. Each data source has strengths and limitations for identifying and describing systems due to their varied content, linkages across data sources, and data collection methods. In addition, although no single national data source provides a complete picture of U.S. systems and their members, the CHSP initiative will create an early model of how such data can be combined to compensate for their individual limitations. Identifying systems in a way that can be repeated over time and linked to a host of other data sources will support analysis of how different types of organizations deliver health care and, ultimately, comparison of their performance.

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Changes in Hospital–Physician Affiliations in U.S. Hospitals and Their Effect on Quality of Care

Abstract: Agency for Healthcare Research and Quality and National Science Foundation Graduate Research Fellowship.

Cited by 77 publications

References 23 publications

Consequences of the 340B Drug Pricing Program

Consequences of the 340B Drug Pricing Program

Patient care effectiveness and financial outcomes of hospital physician contracting emphasis

Leveraging Diverse Data Sources to Identify and Describe U.S. Health Care Delivery Systems

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