Study: Physician-led hospitals earn nearly 7 times higher patient experience rating

Physician-led hospitals outperformed their counterparts in quality of care, cost of care and access to care, according to a recent study. 

The NDP Analytics study revealed that 41% of physician-led hospitals received the highest rating for patient experience as opposed to 6% of non-physician-led hospitals. Nearly 60% of physician-led hospitals showed a lower Medicare cost than the national median hospital in 2022.

The study assessed statistics from the Centers for Medicare & Medicaid Services (CMS) of physician-led hospitals that on average house 60 beds.

“Physician-led hospitals are designed to meet their community needs, and they do this by focusing on the most important relationship in healthcare, the patient-physician relationship,” said Frederic Liss, M.D., president of Physician-Led Healthcare for America, in a press release. “The rapid consolidation of our healthcare markets makes it clear that patients deserve additional choices in healthcare. Physician-led hospitals represent a logical tool that is immediately available.”

Through analyzing CMS Medicare spending per beneficiary and the hospital consumer assessment of healthcare providers and systems survey, the study found that physician-led hospitals had overall higher quality care and lower cost.

Nationally, there are 250 physician-led hospitals totaling 14,700 beds. The study revealed that in the metro areas studied, physician-led hospitals increased competition and drove down costs. On average, these hospitals primarily function as community hospitals and acute care facilities. The majority, seven in eight, are located in urban areas with over half being found in the South.

“One possible factor that could bring down cost is that when the system becomes so big, when you consolidate, you have to pay the overhead and the management,” said study co-author Nam Pham, Ph.D. “Because by nature, when you have mid-management, you have to create many, many layers. And is it efficient? Maybe not at a certain point. So that explains the cost. I am not surprised at all that physician-led hospitals are more efficient.”

Physician-led hospitals also had a nearly seven times higher patient experience as opposed to non-physician-led hospitals. This number was assessed through MSPB, which collects the cost of services immediately before, during and after a patient’s hospital stay.

The MSPB scores help “to increase the transparency of care for consumers and recognize hospitals that are involved in the provision of high-quality care at lower cost to Medicare,” according to CMS.

Physician-led hospitals account for only 5% of hospitals with patient experience ratings and yet received 14% of Healthgrades awards for outstanding patient experience.

“They’re smaller, nurses and doctors pay attention,” Pham said. “When the place is like a zoo, you’re working in a thousand beds, running around, you could be overwhelmed and make a mistake.”

The study also found that physician-led hospitals reported $240 million in charity care to CMS and totaled $217 million in annual cost savings for Medicare, a per patient savings of $1,100 to $3,000.

Physician-led large hospital systems earned higher U.S. News and World Report ratings and bed usage rates with no differences in financial performance, according to a 2019 study published in Health Care Management Review. Physicians who go on to lead large hospital systems may possess skills, qualities or management approaches that positively affect hospital quality and the value of care, the authors posited.