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• W2418247112 abstract "The increasing consolidation of health care providers has undeniable, deleterious consequences for consumers; yet what is the Obama Administration doing about it? Making things worse.A New England Journal of Medicine study by Kocher and Sahni1 asserted that “US hospitals have responded to implementation of health care reform by accelerating hiring of physicians. More than half of practicing US physicians are now employed by hospitals or integrated systems, a trend that is fueled by the intended creation of accountable care organizations.”Hospitals that acquire physician practices argue that it helps them coordinate care and control costs. But why are hospitals often acquiring physician practices for a price that is far in excess of what they can possibly bill? It seems irrational.They do so to capture the referrals for all types of services. Kocher and Sahni1 state, “For hospitals to break even, newly hired PCPs must generate at least 30% more visits, and new specialists 25% more referrals, than they do at the outset… Hospitals are willing to take a loss employing PCPs in order to influence the flow of referrals to specialists who use their facilities.”A May 2014 Health Affairs study2 also found that when hospitals buy physician practices, the result is higher hospital prices and increased spending. The study, performed by Stanford University (Stanford, CA) researchers, examined 2.1 million hospital claims and validates insurance companies’ and economists’ contentions that the main motivation is negotiating higher prices and capturing referrals.Researchers at the Center for Studying Health System Change (Washington, DC) examined nearly 600,000 private insurance claims and found that average hospital outpatient department prices for common imaging, colonoscopy, and laboratory services are double the price for identical services provided in physician offices or other community settings. For example, the average price of a colonoscopy in a hospital was $1383, compared with $625 in a community setting (eg, ambulatory surgery center). Similarly, physical therapy prices were 41% to 64% higher in hospitals than community settings.3The Federal Trade Commission has only sporadically engaged on such mergers and acquisitions. For example, it blocked a proposed merger in Idaho that would have given Boise-based St. Luke’s Health System 80% of the physicians in Nampa, Idaho.The Medicare Payment Advisory Commission has recommended that Medicare pay hospital-employed physicians for routine evaluation and management visits at the same rate as physician offices. Such a policy would reduce hospital reimbursement for those services by over 56%, and save more than $10 billion over 10 years. Congress has not acted on that recommendation, nor has the Administration endorsed it.Indeed, increasing payment disparities between the physician office and hospitals for identical services appears to be a deliberate public policy of this Administration, and has made it difficult for physician practices to remain economically viable. Payment cuts to cardiology for services often provided in the office more than tripled the number of cardiologists employed by hospitals between 2007 and 2012. Now the Centers for Medicare and Medicaid Services proposes eliminating reimbursement for the “radiation treatment vault,” which protects health care professionals, caregivers, and others from such radiation and is integrally tied to the linear accelerator itself. If this proposal is finalized, payments to physician-led community-based centers would be cut by more than 10% but leave hospitals untouched.It should be no surprise that such policies have discouraged many physicians from continuing to operate free-standing practices. A recent study by Merritt Hawkins & Associates (Irving, TX) found a substantial shift toward the employed physician model, with more than 90% of new physician job openings at hospitals and other facilities and just 10% in independent practice settings.4" @default.
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• W2418247112 date "2014-01-01" @default.
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• W2418247112 title "The obama administration: driving provider consolidation and increased costs." @default.
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