Little Evidence Exists To Support The Expectation That Providers Would Consolidate To Enter New Payment Models

Neprash, Hannah T.; Chernew, Michael E.; McWilliams, J. Michael

doi:10.1377/hlthaff.2016.0840

Cited by 57 publications

(36 citation statements)

References 20 publications

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“…4,5 However, a recent study found no association between local market ACO penetration and increased vertical integration. 6 Vertical integration could instead result from a desire by hospitals and physicians to earn higher revenues. If a hospital controls a large share of physicians in a region, the hospital may be able to negotiate higher prices for its services from insurers, due to the facility's stronger bargaining power.…”

Section: Introductionmentioning

confidence: 99%

Annual Spending per Patient and Quality in Hospital-Owned Versus Physician-Owned Organizations: an Observational Study

Metcalfe²,

Vu³

et al. 2019

J GEN INTERN MED

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BACKGROUND: Recent studies that compared patient spending in hospital-owned physician practices versus physician-owned groups did not compare quality of care. Past studies had incomplete measures of physicianhospital integration, or lacked patient-level data. OBJECTIVE: To measure the association between physician-hospital integration and both spending and quality using patient-level data and explicit physicianhospital contracting information. DESIGN: Retrospective review of claims data from 2014 through 2016. Adjustments were made for patient, physician, and regional characteristics. PATIENTS: 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. MAIN OUTCOMES AND MEASURES: Annual 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. 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. RESULTS: Estimates 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). Spending is significantly higher for durable medical equipment, imaging, unclassified services, and outpatient care. The spending difference appears attributable to greater service utilization rather than higher prices. There was no consistent difference in care quality for hospital-owned versus physician-owned practices. CONCLUSIONS AND RELEVANCE: We find that financial integration between physicians and hospitals raises patient spending, but not care quality. Given that higher spending raises the price of health insurance, policy makers should carefully consider policies that limit consolidation of hospitals and physicians.

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Section: Introductionmentioning

confidence: 99%

Annual Spending per Patient and Quality in Hospital-Owned Versus Physician-Owned Organizations: an Observational Study

Metcalfe²,

Vu³

et al. 2019

J GEN INTERN MED

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“…That said, we do not find any evidence of a decrease in severe maternal morbidity with Catholic ownership that would support an overall conclusion of improved quality. Current literature suggests that this growth in mergers and affiliation changes are part of a broader trend in hospital consolidation likely driven by multiple factors such as economies of scale, financial distress, desires to expand market power, and risk management strategies in response to health care reform (Dafny 2014, Uttley and Khaikin 2016, Neprash et al 2017. We test our identifying assumption by estimating how changes in ownership affect the composition of reproductive patients, hospital characteristics, and controlling for changes in unemployment in the county where the hospital is located.…”

mentioning

confidence: 99%

Reproductive health care in Catholic-owned hospitals

Hill

Slusky

Ginther

2019

Journal of Health Economics

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Mergers that affiliate a hospital with a Catholic owner, network, or system reduce the set of possible reproductive medical procedures since Catholic hospitals have strict prohibitions on contraception. Using changes in ownership of hospitals, we find that Catholic hospitals reduce the per bed rates of tubal ligations by 31%, whereas there is no significant change in related permitted procedures such as Caesarian sections. However, across a variety of measures, we find minimal overall welfare reductions. Still, fewer tubal ligations increase the risk of unintended pregnancies across the United States, imposing a potentially substantial cost for less reliable contraception on women and their partners.

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“…3,6,27 Other research, however, has demonstrated that vertical integration preceded initiation of alternative payment models. 28 The increased likelihood of physician practices to accept Medicaid after vertical integration has been previously demonstrated. 8,11,12 Hospitals that consolidate are more likely to be large or major teaching hospitals and less likely to be for-profit institutions, 29 and large hospital systems are required to treat all acute patients due to regulations such as the Emergency Medical Treatment and Labor Act of 1986.…”

Section: Discussionmentioning

confidence: 94%

Does Vertical Integration Improve Access to Surgical Care for Medicaid Beneficiaries?

Haddad

Resnick

Nikpay

2020

Journal of the American College of Surgeons

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BACKGROUND: Vertical integration is increasingly common among surgical specialties in the US; however, the effect of vertical integration on access to care for low-income populations remains poorly understood. We explored the characteristics of surgical practices associated with vertical integration and the effect of integration on surgical access for Medicaid populations. STUDY DESIGN: Using a survey of US office-based physician practices, we examined characteristics of 15 surgical subspecialties from 2007 to 2017, including provider sex and specialty, practice payer mix, surgical volume, and county socioeconomic status. Using multivariable logistic regression and time-series analysis, we evaluated practice and provider characteristics associated with vertical integrationdour primary outcomedand practice Medicaid acceptance ratesd our secondary outcome. RESULTS: Our analysis included 84,795 unique surgical practices (303,903 practice-years). The rate of vertical integration during the 10-year period was 18.0%, with 72.1% of surgical practices never integrating. Practices that integrated were more likely to accept Medicaid patients than practices that did not (81.0% vs 60.8%, p < 0.001). Accepting Medicaid increased the likelihood of vertical integration relative to practices that did not (odds ratio [OR] 4.20, 95% CI 3.93 to 4.49). Practices that integrated were more likely to accept Medicaid in the future (OR 2.61, 95% CI 2.40 to 2.83), even after adjusting for previous Medicaid acceptance and hospital and time fixed effects. CONCLUSIONS: Surgical practices caring for the underinsured are more likely to join larger health care systems, driven by market characteristics. Vertical integration is associated with future increased rates of Medicaid acceptance among practices, allowing for increased access to surgical care for vulnerable, low-income patients. The potential benefit of increased surgical access for low-income beneficiaries from vertical integration must be balanced with the potential for increased prices.

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Little Evidence Exists To Support The Expectation That Providers Would Consolidate To Enter New Payment Models

Cited by 57 publications

References 20 publications

Annual Spending per Patient and Quality in Hospital-Owned Versus Physician-Owned Organizations: an Observational Study

Annual Spending per Patient and Quality in Hospital-Owned Versus Physician-Owned Organizations: an Observational Study

Reproductive health care in Catholic-owned hospitals

Does Vertical Integration Improve Access to Surgical Care for Medicaid Beneficiaries?

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