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Trends in Hospital Ownership of Physician Practices and the Effect on Processes to Improve Quality
Tara F. Bishop, MD, MPH; Stephen M. Shortell, PhD, MPH, MBA; Patricia P. Ramsay, MPH; Kennon R. Copeland, PhD; and Lawrence P. Casalino, MD, PhD
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Trends in Hospital Ownership of Physician Practices and the Effect on Processes to Improve Quality

Tara F. Bishop, MD, MPH; Stephen M. Shortell, PhD, MPH, MBA; Patricia P. Ramsay, MPH; Kennon R. Copeland, PhD; and Lawrence P. Casalino, MD, PhD
Reports suggest that hospitals are acquiring physician practices. Data from 3 large surveys showed increased use of care management processes when hospital acquired practices.
However, there may be off-setting negative effects if practices acquired by hospitals enable them to raise prices through increased negotiating leverage with payers. A recent study found that markets where hospitals report an increase in ownership of practices were associated with higher healthcare spending.14 Hospital acquisition of practices may also have unintended effects on physician autonomy or rapport with patients—although, to date there are no data to support this possibility.

Limitations

There are 2 main limitations to the present analysis. First, the response rate ranged from almost 50% to more than 63% across the 3 surveys. Although this is a robust response rate—particularly for physician groups—there may be unobservable differences between respondents and nonrespondents. Second, the data are based on the responses of a single informant in each group. We sought the person who was the most knowledgeable respondent for the questions asked; however, it was beyond the scope of our research to validate the responses. Nevertheless, a number of internal checks of the responses suggested consistent validity.

CONCLUSIONS
These surveys of physician groups showed minimal increase in the percentage of practices that were owned by hospitals. However, there appears to be increased use of processes for the management of chronic disease among practices that did change ownership. As the healthcare environment continues to change and evolve due to changes in public and private policies, it will be important to continue to monitor both the prevalence and the effects of hospital ownership of practices on patients and physicians. This is particularly important, given the current findings that those practices that became hospital-owned experienced a significant increase in their use of recommended evidence-based CMPs for patients with asthma, congestive heart failure, depression, and diabetes. Future research should examine the relationship between practice ownership and clinical and patient-reported outcomes of care.

Acknowledgments

The statements, findings, conclusions, views, and opinions contained and expressed in this article are based in part on data obtained under license from the following IMS Health information services: Healthcare Organizational Services, (2007) IMS Health Inc. All rights reserved. The statements, findings, conclusions, views, and opinions contained and expressed herein are not necessarily those of IMS Health Inc, or any of its affiliated or subsidiary entities.

Author Affiliations: Division of Health Policy and Economics, Department of Healthcare Policy and Research (TFB, LPC), and Division of General Internal Medicine, Department of Medicine (TFB), Weill Cornell Medical College, New York, NY; School of Public Health (SMS), University of California, Berkeley (PPR), Berkeley, CA; Statistics and Methodology Department, National Opinion Research Center at the University of Chicago (KRC), Bethesda, MD.

Source of Funding: This project was funded by the Robert Wood Johnson Foundation (Grant No. 68847). Dr Bishop is supported by a National Institute On Aging Career Development Award (K23AG043499) and as a Nanette Laitman Clinical Scholar in Public Health at Weill Cornell Medical College.

Author Disclosures: Dr Casalino is an unpaid board member for the American Medical Group Association Foundation and the Healthcare Research and Education Trust. The remaining authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design (TFB, KRC, LPC, SMS); acquisition of data (KRC, LPC, PPR, SMS); analysis and interpretation of data (TFB, KRC, LPC, PPR); drafting of the manuscript (TFB, LPC); critical revision of the manuscript for important intellectual content (KRC, LPC, SMS); statistical analysis (KRC, LPC, PPR); obtaining funding (TFB, LPC, SMS); administrative, technical, or logistic support (PPR).

Address correspondence to: Tara F. Bishop, MD, MPH, Department of Public Health, Weill Cornell Medical College, 402 E. 67th St, Rm LA-218, New York, NY 10065. E-mail: tlfernan@med.cornell.edu. 
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