5 things to know on the affect of physician-hospital integration

A study published in JAMA Internal Medicine's December 2015 publication examined the financial integration of physicians and hospitals, and the association with commercial healthcare prices.

The researchers used a regression analysis to examine the relationship between changes in physician-hospital integration from Jan. 1, 2008 to Dec. 31, 2012 in 240 metropolitan statistical areas. The study included more than 7 million non-elderly enrollees for preferred-provider organizations or point-of-service plans included in the Truven Health MarketScan Commercial Database.

The researchers found:

1. Physician hospital integration increased from 2008 to 2012 by 3.3 percentage points on average. There was considerable variation in the increase across the country, with the interquartile range going from 0.8 percentage points to 5.2 percentage points.

2. An increase in the physician-hospital integration equivalent to the 75th percentile of changes was associated with an average increase of $75 per enrollee in annual outpatient spending from 2008 to 2012.

3. There was a 3.1 percent increase in average outpatient spend per enrollee in 2012 to around $2,407.

4. Price increases drove the increase in outpatient spending because associated changes in utilization were minimal. The corresponding change in price-standardization spending was $14 per enrollee.

5. The changes in physician-hospital integration weren't associated with significant inpatient spending changes — around $22 per enrollee. The integration also wasn't associated with a utilization change.

"Financial integration between physicians and hospitals has been associated with higher commercial prices and spending for outpatient care," concluded the study authors.

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