Hospitals and healthcare systems nationwide are increasingly buying more physician practices as health reform requires care delivery to move toward a more quality-based care model instead of a fee-for-service one. The reactions are mixed.
Physician Carolyn Fields ran her independent practice in Greenville, South Carolina, for years before recently joining the Bon Secours St. Francis Health System. In Billings, Montana, oncologist Dr Patrick Cobb sold his 30-year group practice to the St. Vincent Healthcare hospital last December. Dr Dwayne Smith, a bariatric surgeon, shifted his practice to a hospital in Cincinnati, Ohio, almost 2 years ago.
These practitioners’ stories are not too uncommon. Hospitals and healthcare systems nationwide are increasingly buying more physician practices as health reform requires care delivery to move toward a more quality-based care model instead of a fee-for-service one. The reactions are mixed.
“I didn’t want to be bought. I wanted my independence,” Dr Fields said in a recent article. “But it’s becoming more and more difficult. And I got tired of all that.”
As reform initiatives drive up costs to operate private practices, many physicians are choosing to work for larger hospital care networks. The mandate to switch to electronic health records, for instance, could cost practitioners a 1% reduction in Medicare payments if they do not implement EHR use by 2015.
“This would have been a very difficult investment for us,” said Dr Smith about his private practice.
MedPAC, a federal advisory committee for Medicare issues, said the merging of physician practices to hospital networks could raise healthcare costs because physicians can bill for higher outpatient rates instead of traditional physician visit costs. In fact, MedPAC’s 2013 Report to Congress on Medicare Payment Policy found that Medicare payment rates for office visits were 80% higher when billed as outpatient services, even after adjusting for differences in packaging.
“The acquisition of physicians in principle would make it easier to integrate those physicians to coordinate care for the patients, and that should have positive impacts on quality. But there’s no guarantee that happens,” said Alwyn Cassil from the Center for Studying Health System Change. “The flip side is that it’s a consolidation of providers, and when you join hospitals and doctors together, you create even more negotiating levers to exert over payers and purchasers ... it gives you a lot of negotiation clout to get higher payment rates.”
Some say reform should look to capping rates for certain populations like Medicare beneficiaries in order to negate higher rates. Nonetheless, as hospitals hire more physicians and can offer a greater range of services, it will result in a more efficient and less costly care model.
Dr Angelo Sinopoli, vice president of clinical integration and chief medical officer at Greenville Health System, comments, “The continued rise in healthcare costs is a bigger and bigger line item for employers and government. Things are different now than in the past. The economic pressure to do this is greater than it’s ever been."
Around the Web
Cost Impact of Hospitals Buying Practices Yet to be Felt [Greenville Online]
Doctors Bail Out on Their Practices [CNN Money]
Hospitals Buying More Doctors' Practices [USA TODAY]
Covering antiobesity medications like semaglutide could save Medicare around $500 million annually; preliminary CDC data showed a 3% decline in the number of US overdose deaths last year; the Biden administration recently announced the first national maternal mental health strategy.
Read More
CMS Medicare Final Rule: Advancing Benefits, Competition, and Consumer Protection
May 7th 2024On this episode of Managed Care Cast, we're talking with Karen Iapoce, senior director of government products and programs at ZeOmega, about the recent CMS final rule on Medicare Part D and Medicare Advantage.
Listen
After the ACA Expanded Health Care Access, 2024 Elections May See Voters Demand Affordability
May 15th 2024At the spring conference of the New Jersey Health Care Quality Institute, speakers discussed how health policy, affordability, and transparency may play a role in voters’ decisions.
Read More
Panel Addresses Minority Physician Shortage, Maternal Health at Senate Committee Hearing
May 15th 2024The senate hearing held by the US Senate Committee on Health, Education, Labor, and Pensions, led by Sen. Bernie Sanders (I, Vermont), chairman of the committee, and ranking member Sen. Bill Cassidy, MD, (R, Louisiana), addressed the critical issue of physician and health care worker shortages, as well as the maternal health crisis, in the US.
Read More