Value of doc-hospital integration may be overstated

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Healthcare leaders have long looked to collaboration with doctors as a way to improve efficiency through arrangements such as accountable care organizations, but a closer look reveals these hopes are “probably wishful thinking,” according to a column in Forbes.

A December 2015 study published in JAMA Internal Medicine found physician-hospital integration hikes outpatient spending as doctors’ market power increases, writes Forbes contributor Peter Ubel, a physician and behavioral scientist at Duke University. That spending increase is almost entirely in the form of price increases, with a comparatively minor increase in outpatient utilization in the meantime. Inpatient care, meanwhile, barely budged in the wake of such doctor-hospital consolidation.

In other words, Ubel argues, consolidation doesn’t inherently create operation efficiency; rather, it increases physician practices’ negotiating power. Deprived of such power with health payers, many doctors engage in consolidation with bigger providers to share in the spoils of both their market power and their contracting networks.

That’s not to say such consolidation can’t lead to greater operational efficiency, Ubel writes. He cites his own experience training at the Mayo Clinic, which has pioneered both hospital-physician integration and turning it into the direction of greater efficiency and improved care quality. However, he adds, it’s doubtful this kind of improvement is the primary motivation for doctors integrating with healthcare providers. Before embarking on extensive hospital-physician practice integration, leaders on both sides of the equation should consider several potential drawbacks, FierceHealthcare previously reported. For example, a survey of the American College of Physician Executives found 32 percent of respondents saw costs increase in the wake of buying a medical group or practice.

- read the column
- here’s the 2015 study

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