Primary care physicians who become associated with health systems more often steer their patients toward the organization’s services, increasing both utilization and care spending, according to a study published Friday in JAMA Health Forum.
The findings, which found no differences in readmission rates related to the affiliations, add new fuel to the contentious policy debates over provider consolidation and vertical integration in healthcare.
“These findings raised concern that the steering of care corresponded with insurers paying more for the same types of care visits and that this form of consolidation may be associated with overall higher costs,” Harvard University public health and health policy researchers wrote in the journal. “Moreover, we found that vertical relationships were associated with increased specialist visits within large health systems, which warrants further study to ascertain whether these visits represent low-value care or improved access to specialists.”
The analysis of more than 4 million commercially insured Massachusetts patient observations compared physicians who were newly aligned with a system—either by ownership, joint contracting or affiliation—in 2015 or 2017 to those who remained unassociated or maintained their health system association.
Between these groups, the researchers found that vertical relationships were associated with a significant, 22.6% increase in specialist visits per patient year, though there were no significant changes in total ED visits or hospitalizations.
Within the specific healthcare system, for primary care physicians newly aligned with a system, specialist visits per patient year were 29.4% greater while within-system ED visits and hospitalizations per patient year were 14.2% and 22.4% higher, respectively.
Total medical expenditures rose 6.3%, or just over $350, per patient-year following a primary care physician’s entry into a vertical relationship. There were no significant differences in the probability of admission to a “high-price” hospital, readmission or admission to a hospital with low readmission rates between the study groups.
The researchers acknowledged that steering patients toward associated care services “is not necessarily a factor in lower-quality care” as the relationships could allow for better care coordination and less redundancy, “which could be associated with higher quality and reduced costs.” Increased specialist visits could also be the result of broader access, they added.
“However, the finding of no change in patient readmissions might suggest limited gains from increased coordination,” the researchers wrote while highlighting prior studies suggesting that “overall, vertical relationships appeared to be no panacea to health care access or coordination.” They also floated “a portfolio of countermeasures” for policymakers, regulators and purchasers concerned about steering to consider including antitrust enforcement and greater transparency tools for patients.
Both the Biden administration and lawmakers have increased their scrutiny of deals and policies leading to vertical integration and greater provider consolidation.
This summer, the Federal Trade Commission and the Department of Justice, for instance, proposed new updates to their guidelines for antitrust enforcement that explicitly touch on vertical integration and platforms as points of consideration when deciding whether to block a merger.
The latter group sought stakeholder input as it mulls potential adjustments to regulatory legislation and has so far heard arguments supporting both sides of the issue: that consolidation deals can help certain providers stay afloat during tough economic times and that the deals impose “significant harm on markets” with no added benefits for patients.