Dive Brief:
- A new study from Harvard Medical School researchers says acquisitions of physician practices have raised healthcare spending $75 per person ever year.
- The study analyzed physician practices in 240 cities with 7.3 million people with commercial insurance associated with those practices. There was a 5.2% increase in number of physician practices belonging to larger organizations - mostly hospital groups. Outpatient spending increased 3.1% every year, but the amount of services didn't change.
- Some physician groups disagreed integration with larger organizations will continue to add costs. Dr. Steven Strongwater, president and CEO of Atrius Health, Massachusetts's largest physician group, was quoted in the Boston Business Journal saying larger systems are required to care for patients on a budgeted basis.
Dive Insight:
Population health management requires insurers and providers to keep people healthy in order to share in savings. It also reward health systems for moving patients to lower costing settings to get care. "The type of outreach necessary to keep patients out of the hospital and at their best possible health requires significant resources to invest in analytical tools and non-billable support staff," Dr. Strongwater told the Boston Business Journal in an email statement.
The study did not assess quality of care, which the authors noted might justify the higher prices, according to Reuters. But, higher costs for people with private insurance will probably lead to higher out-of-pocket costs for patients, wrote James Reschovsky and Dr. Eugene Rich of Mathematica Policy Research in Washington D.C., in an editorial. Reschovsky noted in an email to Reuters, "The higher prices in hospital outpatient departments are passed on to employers in the form of higher premiums, and ultimately to workers in the form of less generous health benefits, higher premium cost sharing, or lower wages."