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Spending Up With Treatment in Hospital-Owned Practices

Difference in spending seems to be due to greater service utilization; no difference seen in care quality

hospital sign

WEDNESDAY, Sept. 11, 2019 (HealthDay News) -- Financial integration between physicians and hospitals raises patient spending but does not impact care quality, according to a study published online Sept. 3 in the Journal of General Internal Medicine.

Vivian Ho, Ph.D., from the Baker Institute for Public Policy at Rice University in Houston, and colleagues conducted a retrospective review of claims data from 2014 through 2016 to measure the correlation between physician-hospital integration and both spending and quality. Annual spending per patient was compared for those treated by a physician practice that is billing through a hospital versus an independent physician practice. Quality measures were assessed, including readmission within 30 days of discharge, appropriate care for patients with diabetes, and screening mammography for women aged 50 to 64 years.

The researchers found that when treated by doctors in hospital-owned versus physician-owned practices, patients in a preferred provider organization incurred spending that was 5.8 percentage points higher. For durable medical equipment, imaging, unclassified services, and outpatient care, spending was significantly higher. The investigators noted that the difference in spending appeared to be due to greater service utilization and not higher prices. No consistent difference in care quality was seen for hospital-owned versus physician-owned practices.

"Our findings, combined with previous research, suggest that increased integration leads to higher spending, with no consistent evidence of better quality," the authors write.

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