Surgeons report higher pay after vertical integration with hospitals

Surgical specialists make more after becoming vertically integrated with hospitals or health systems, according to a Dec. 6 study published in Health Affairs.

Physicians overall saw a slight pay decrease after vertical integration, but surgical specialists reported income $10,741 higher per year after joining the larger organization.

Surgeons may choose to vertically integrate with hospitals for a variety of reasons, including support with technology purchases, reimbursement bumps and access to a new referral stream. The difference in physician income between independent and vertically integrated groups depends on whether the hospital is nonprofit or for-profit, and market competition, the study said.

Physicians vertically integrating with nonprofit hospitals tended to report 1.9 percent lower income per year, while physicians joining for-profit hospitals did not see a significant income difference.

Similarly, in more competitive markets, vertical integration was associated with a 2.2 percent income drop, so physicians made $8,276 less per year on average, according to the study. In noncompetitive markets, physicians did not see a significant income decrease after integration.

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