Outpatient care has higher commercial costs when hospitals employ physicians: 5 things to know

Hospital-employed physicians have higher commercial healthcare prices than non-employed physicians, according to an article published in the October issue of JAMA Internal Medicine.

This article is just another in a long list of articles focused on the impact of consolidation in the industry. The researchers in this article used a regression analysis to estimate the relationship changes in physician-hospital integration from January 2008 through December 2012 at 240 metropolitan statistical areas. There were 7 million non-elderly patients included in the Truven Health MarketScan Commercial Database during the study period.

They examined the annual inpatient and outpatient spending per enrollee and associated healthcare service use. Here are five key notes:

1. Hospital-physician integration increased by 3.3 percent on average during the study period across the 240 metropolitan statistical areas. There was considerable variation in this increase across the MSAs.

2. The enrollees in areas with physician-hospital integration at the 75th percentile of changes were associated with a $75 increase per enrollee in annual spending from 2008 to 2012. The average outpatient spending increased 3.1 percent to $2,407 per enrollee.

3. Price increases drove the higher outpatient spending over the four-year time frame. There were only minimal changes in utilization, with a $14 corresponding change in price-standardized spending per enrollee.

4. The physician-hospital integration wasn't associated with significant changes in inpatient spending per enrollee or utilization.

5. The researchers concluded, "Financial integration between physicians and hospitals has been associated with higher commercial prices and spending for outpatient care."

Ambulatory surgery centers are typically reimbursed significantly less than hospital outpatient departments for similar outpatient procedures.

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